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Dollar Tree(DLTR) - 2025 Q1 - Quarterly Results
DLTRDollar Tree(DLTR)2024-06-05 10:32

Sales Performance - Consolidated net sales increased 4.2% to 7.63billion,withenterprisesame−storenetsalesup1.07.63 billion, with enterprise same-store net sales up 1.0%[9] - Dollar Tree same-store net sales increased 1.7%, driven by a 2.8% increase in traffic[9] - Family Dollar same-store net sales increased 0.1%, driven by a 0.9% increase in traffic[9] - Total net sales increased to 7,626.4 million, up 4.2% from 7,319.5millioninthepreviousyear[34]−Salespersquarefootincreasedto7,319.5 million in the previous year[34] - Sales per square foot increased to 231, up from 219,withDollarTreeat219, with Dollar Tree at 235 and Family Dollar at 227[41]ProfitabilityandMargins−Grossprofitincreased5.3227[41] Profitability and Margins - Gross profit increased 5.3% to 2.35 billion, with gross margin expanding 30 basis points to 30.8%[10] - Operating income increased 0.2% to 420.6million,withoperatingmargindeclining20basispointsto5.5420.6 million, with operating margin declining 20 basis points to 5.5%[12] - Dollar Tree segment gross profit margin improved to 35.4%, up from 35.3% year-over-year[34] - Family Dollar segment operating income increased significantly to 36.9 million, up from 8.8million,withamarginimprovementto1.18.8 million, with a margin improvement to 1.1% from 0.3%[34] - Adjusted operating income (Non-GAAP) for the 13 weeks ended May 4, 2024, was 435.6 million, representing 5.7% of total revenue, compared to 449.7million(6.1449.7 million (6.1%) for the same period in 2023[51] - Family Dollar segment's adjusted operating income (Non-GAAP) increased to 51.2 million (1.5%) for the 13 weeks ended May 4, 2024, up from 38.8million(1.238.8 million (1.2%) in the same period in 2023[52] Earnings and Shareholder Returns - Adjusted diluted EPS was 1.43, down 2.7% from the prior year[13] - The company repurchased 2.5 million shares for 313million[14]−Adjusteddilutedearningspershare(Non−GAAP)forthe13weeksendedMay4,2024,was313 million[14] - Adjusted diluted earnings per share (Non-GAAP) for the 13 weeks ended May 4, 2024, was 1.43, down from 1.47inthesameperiodin2023[55]−Adjustednetincome(Non−GAAP)forthe13weeksendedMay4,2024,was1.47 in the same period in 2023[55] - Adjusted net income (Non-GAAP) for the 13 weeks ended May 4, 2024, was 311.5 million, compared to 325.1millionforthesameperiodin2023[54]StoreOperationsandPortfolioOptimization−Thecompanyclosedapproximately550storesaspartofportfoliooptimizationandexpectstocloseanadditional150storesbytheendoffiscal2024[20]−Thecompanyclosed529storesinthefirstquarter,including513FamilyDollarstores,aspartofastoreportfoliooptimizationreview[40][45]−Sellingsquarefootagegrewby0.9325.1 million for the same period in 2023[54] Store Operations and Portfolio Optimization - The company closed approximately 550 stores as part of portfolio optimization and expects to close an additional 150 stores by the end of fiscal 2024[20] - The company closed 529 stores in the first quarter, including 513 Family Dollar stores, as part of a store portfolio optimization review[40][45] - Selling square footage grew by 0.9% to 134.2 million, with Dollar Tree expanding by 4.8% while Family Dollar contracted by 3.5%[40] - The company incurred 17.5 million in store closure costs during the quarter, primarily related to the Family Dollar segment[47] - Store closure costs for the 13 weeks ended May 4, 2024, were 17.5million,comparedto17.5 million, compared to 0 in the same period in 2023[51][54] Financial Outlook - Fiscal 2024 net sales outlook range is 31.0billionto31.0 billion to 32.0 billion, with adjusted diluted EPS expected to range from 6.50to6.50 to 7.00[4] Cash Flow and Capital Expenditures - Net cash provided by operating activities decreased to 695.7millionfrom695.7 million from 752.0 million in the prior year[38] - Capital expenditures increased to 472.2million,upfrom472.2 million, up from 350.4 million, reflecting continued investment in the business[38] - Free cash flow (Non-GAAP) for the 13 weeks ended May 4, 2024, was 223.5million,adecreasefrom223.5 million, a decrease from 401.6 million in the same period in 2023[57] - Capital expenditures for the 13 weeks ended May 4, 2024, were 472.2million,upfrom472.2 million, up from 350.4 million in the same period in 2023[57] - Net cash provided by operating activities (GAAP) for the 13 weeks ended May 4, 2024, was 695.7million,downfrom695.7 million, down from 752.0 million in the same period in 2023[57] Costs and Expenses - Adjusted selling, general and administrative expenses for Family Dollar decreased to 23.8% of sales, down from 23.7%[49] - Legal reserve adjustments for the 13 weeks ended May 4, 2024, were a deduction of 2.5million,comparedtoanadditionof2.5 million, compared to an addition of 30.0 million in the same period in 2023[51][54] - Adjusted effective tax rate (Non-GAAP) for the 13 weeks ended May 4, 2024, was 24.2%, compared to 23.3% in the same period in 2023[55] Losses and Insurance Recoveries - The company incurred $117.0 million in losses due to tornado damage to its Marietta distribution center, with expected insurance recoveries to fully offset the losses[17]