Discount retailer Dollar Tree, Inc. (DLTR) reported Thursday a 37% year-over-year increase in profit for the second quarter, boosted by higher operating margins and sales growth amid better store traffic.
Earnings per share for the quarter rose 45% and topped analysts' expectations by seven cents. The company also raised its earnings forecast for the full-year 2010.
Dollar Tree has emerged as one of the big winners during recession and continues to benefit even in a recovering economy as shoppers continue to patronize dollar stores.
"Dollar Tree's sales and earnings continued to expand in the second quarter," President and CEO Bob Sasser said in a statement.
The Chesapeake, Virginia-based operator of discount variety stores selling everything for $1 or less, reported net income of $78.0 million or $0.61 per share for the second, higher than $56.9 million or $0.42 per share in the prior-year quarter.
On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $0.54 per share for the second quarter. Analysts' estimates typically exclude special items.Per-share data reflect the impact of a stock split during the quarter.
Net sales for the quarter grew 12.7% to $1.38 billion from $1.22 billion in the same quarter last year. Twenty Wall Street analysts had a consensus revenue estimate of $1.35 billion for the quarter.
Comparable store sales for the quarter increased 6.7%, on top of a 6.8% growth last year.
"Sales were strong throughout the quarter, driven by increases in both traffic and average ticket. Customers are responding in record numbers to our outstanding values and fun shopping experience," Sasser added.
Looking ahead to the third quarter, the Company expects earnings in a range of $0.57 to $0.62 per share, on quarterly sales projected between $1.35 billion and $1.39 billion, based on low to mid single digit positive comparable store sales. Analysts project earnings of $0.61 per share on revenues of $1.37 billion for the third quarter.
For fiscal 2010, Dollar Tree raised its adjusted earnings forecast to a range of $2.97 to $3.09 per share from the prior guidance of $2.86 to $3.00 per share. Annual sales are now estimated between $5.77 billion and $5.86 billion, up from prior estimate of $5.67 billion to $5.80 billion. The Street is currently looking for full-year 2010 earnings of $2.98 per share on revenues of $5.78 billion.
DLTR closed Thursday's regular trading session at $41.82, up $0.71 on a volume of 2.07 million shares, higher than the three-month average volume of 1.98 million shares. In the past 52-week period, the stock has been trading in a range of $29.57 to $45.49.
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