Discount stores operator Dollar Tree, Inc. (DLTR), a Fortune 500 company, on Wednesday said it expects a sequential decline in first-quarter earnings. The company reported higher profit for the fourth quarter, helped by a 13 percent growth in revenues. Both earnings and revenues exceeded analysts' expectations.
The company, which sells everything for $1 or less, said sales at stores open for at least 12 months in the quarter increased 7.3 percent. Operating margin increased 50 basis points for the quarter to 15.5 percent, driven by a 20 basis point increase in gross margin and a 30 basis point reduction in Selling, General and Administrative expenses.
The company's President and CEO Bob Sasser said, "I am pleased to report that our business momentum remains strong as Dollar Tree's sales, operating margin, and earnings continued to expand in the fourth quarter… We are looking forward to an exciting Spring and Easter selling season."
Net income for the quarter increased to $187.9 million or $1.60 per share from $162.5 million or $1.29 per share. On average, 24 analysts polled by Thomson Reuters expected earnings of $1.59 per share for the quarter. Analysts' estimates typically exclude special items.
Consolidated net sales increased to $1.95 billion from $1.73 billion in the prior year. Analysts expected revenues of $1.93 billion.
Looking ahead to the first quarter, the company expects earnings per share in the range of $0.91 to $0.97. Sales are expected to be between $1.65 billion and $1.69 billion, based on low -to- mid single digit positive comparable-store sales. Wall Street looks for earnings of $0.98 per share on revenues of $ 1.70 billion.
Fiscal year 2012 earnings per share are expected to be in the range of $4.65 to $4.90. The company estimates that sales will range from $7.25 billion to $7.42 billion based on a range of low -to -mid single digit positive comparable-store sales. Wall Street estimates earnings of $4.80 per share on revenues of $7.31 billion.
Dollar Tree repurchased 3.5 million shares in the fourth quarter for $300 million. The company opened 21 stores, expanded or relocated 3 stores, and closed 5 stores. Retail selling square footage increased 6.9 percent.
DLTR closed on Tuesday at $88.01, down from the previous close of $89.35, on 1.54 million shares. The stock is down 2.4 percent in pre-market trading.
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