Dollar Tree Q3 Profit Blooms; Lifts FY09 View

11/24/2009 9:31 AM ET

RELATED NEWS

Dollar Tree Q4 Comp. Sales Up 6.6% - Update

Dollar Tree Q4 Comparable-store Sales Up 6.6% - Quick Facts

Dollar Tree Recalls 204,000 Knifes Due To Laceration Hazard - Update

Dollar Tree Stores Recalls About 204,000 Utility Knife Due To Laceration Hazard - Quick Facts

Initiating Dollar Tree At Neutral - Credit Suisse Comments

Trade DLTR now with

(RTTNews) - As penny-pinching shoppers continued to hunt for low prices, Dollar Tree Inc. (DLTR: News ) reported higher net profit for the third-quarter, with a 12.1% increase in top line. Per share earnings rose 61.7% and topped the Street view. The company also issued guidance for the fourth quarter and boosted its full-year forecast.

Q3 Results

The Chesapeake, Virginia-based company earned $68.2 million or $0.76 per share, compared to $43.1 million or $0.48 per share in the year-ago quarter. On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $0.66 per share. Analysts' estimates typically exclude special items.

Quarterly net sales grew to $1.25 billion from the previous year's $1.11 billion, and exceeded fifteen analysts' consensus revenue estimate of $1.24 billion. Comparable store sales rose 6.5% during the latest quarter.

Bob Sasser, President and CEO of Dollar Tree, said, "Sales and earnings were above plan, operating margin improved significantly, we leveraged our SG&A expenses and we continued to expand our nation-wide store base. The sell-through on Halloween and fall seasonal products was excellent and our stores are now set with an exciting presentation of extreme-value merchandise for Thanksgiving and the Holiday season."

Dollar Tree, a Fortune 500 Company, opened 94 stores, closed 8 stores, and expanded or relocated 33 stores during the third quarter.

Year-to-Date

For the first nine months of fiscal 2009, the company posted earnings of $185.5 million or $2.05 per share, higher than $124.3 million or $1.37 per share in the comparable period last year. Net sales rose to $3.68 billion from $3.26 billion in the same period of 2008.

Outlook For Q4, FY09

Looking forward to the fourth-quarter, the company projects earnings to be in the range of $1.30 - $1.39 per share, with sales between $1.49 billion and $1.53 billion, based on low to mid single digit positive comparable store sales. Wall Street analysts estimate earnings of $1.35 per share, on revenues of $1.53 billion.

For the full year, earnings are now expected in the range of $3.34 - $3.43, up from the prior range of $3.10 - $3.25 per share. The company also raised its sales outlook to $5.17 billion - $5.21 billion from the earlier forecast of $5.09 billion - $5.19 billion. Analysts currently estimate earnings of $3.29 per share, on revenues of $5.20 billion.

Peer Review

Among Dollar Tree's rivals, 99¢ Only Stores (NDN: News ) reported second-quarter net income of $9.6 million or $0.14 per share, compared with a loss of $9.4 million or $0.13 per share in the prior year period. Net sales for the second quarter rose 2.2% to $324.7 million from $317.8 million in the year-ago period.