Discount stores operator Dollar Tree, Inc. (DLTR) Thursday reported an increase in first-quarter profit, driven by higher revenues and improved margins. Earnings per share beat analysts' expectations, while, revenues came in line with view. The company lifted its earnings per share outlook for fiscal 2013 and raised the lower end of sales outlook range.
President and CEO Bob Sasser stated, "Sales continued to grow, our earnings per share increased by 18% and we achieved the highest first-quarter operating margin in the Company's history. Our stores are executing at a high level and we are well positioned with great assortments and the best values ever for Memorial Day, Graduation and an exciting summer selling season."
Dollar Tree, which sells everything for $1 or less, said that comparable sales or sales at stores open for at least 12 months, increased 2.1 percent, on top of a 5.6 percent increase in the same quarter last year.
Operating margin improved 70 basis points to 11.6 percent from 10.9 percent a year earlier.
In the first quarter, the company's net income increased to $133.5 million or $0.59 per share from $116.1 million or $0.50 reported last year. On average, 23 analysts polled by Thomson Reuters expected the company to earn $0.57 per share for the quarter. Analysts' estimates typically exclude special items.
Consolidated net sales for the quarter climbed 8.3 percent to $1.87 billion and matched analysts' consensus estimates.
Looking ahead to the second quarter, the company expects earnings per share to be in the range of $0.52 to $0.57. Sales are estimated to be between $1.81 billion and $1.86 billion, based on low-single digit positive comparable store sales.
Analysts expect the company to report earnings of $0.57 per share, on revenues of $1.86 billion for the second-quarter.
For fiscal 2013, the company now expects earnings per share to be $2.61 to $2.77, up from the prior outlook of $2.54 to $2.74 per share.
Sales are currently expected to be $7.81 billion to $7.97 billion, compared to the earlier view of between $7.79 billion and $7.97 billion. This estimate is based on low-single digit positive comparable store sales. Analysts are looking for earnings of $2.79 per share, on revenues of $7.94 billion for fiscal 2013.
During the first quarter, Dollar Tree opened 94 stores, closed 2 stores, and expanded or relocated 16 stores. Retail selling square footage increased 7.0 percent to 41.2 million square feet.
DLTR closed Thursday's regular trading at $48.37 on the Nasdaq. In the pre-market activity, the shares are currently up 2.15 percent.
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