Home merchandise is among the general merchandising categories that has kept performing for Dollar Tree in a marketplace emerging from the COVID-19 pandemic, one where the company beat analysts on second-quarter earnings but fell short of the sales Wall Street expected.
Dollar Tree posted net income of $282.4 million, or $1.23 per diluted share, versus $261.5 million, or $1.10 per diluted share, in the year-earlier quarter.
In the quarter, Dollar Tree beat a Yahoo Finance-published analyst average earnings per diluted share estimate of $1 although it came up short of the sales estimate.
Consolidated net sales advanced 1% to $6.34 billion in the quarter year over year. The Yahoo Finance Analyst average sales estimate was $6.44 billion.
Enterprise comparable sales decreased 1.2% on a constant currency basis or 1.1% when adjusted to include the impact of Canadian currency fluctuations, Dollar Tree reported, adding that comps increased 6% on a two-year stacked basis. Dollar Tree comps decreased 0.2% on a constant currency basis or were flat when adjusted to include the impact of Canadian currency fluctuations. Family Dollar comps decreased 2.1%, cycling a strong 11.6% increase in the previous year’s quarter,.
Operating income was $402.2 million versus $374.9 million in the year-before period.
Michael Witynski, Dollar Tree president and CEO, said in a conference call that the company had been able to enhance its market share in its consumables business during the second quarter, while, on the general merchandise side, the home, seasonal, apparel and toy categories, which had seen earlier gains, maintained double-digit market share on a two-year stacked basis. He also said that updated store concepts H2, Dollar Tree Plus and the new Combo Stores were delivering “compelling” results.
In introducing the financial results, Michael Witynski, Dollar Tree president and CEO, said the company’s second-quarter earnings per share “of $1.23 represented increases of 12% from the prior year’s quarter and 62% compared to the second quarter of 2019. We continued to see strong performance on the discretionary side of the business, and our key initiatives, including H2, Dollar Tree Plus and the new Combo Stores, are delivering compelling results. All three concepts have performed very well, and we are significantly accelerating these initiatives in 2022 and beyond.”
In addressing market conditions, Witnyski said, “Regarding the continuing and well-publicized challenges in the global supply chain, as well as higher freight costs and other inflationary pressures, our teams are working hard to navigate these issues while staying focused, as always, on delivering the value and convenience our shoppers expect.”