As it spins off its Family Dollar operation, Dollar Tree boosted its earnings guidance while reporting first-quarter gains in income from continuing operations and comparable store sales.
Income from continuing operations was $313.5 million, or $1.47 per diluted share, versus $267.7 million, or $1.23 per diluted share, in the year-prior quarter. Adjusted for one-time events, income from continuing operations was $269.7 million, or $1.26 per diluted share, versus $268.4 million, or $1.23 per diluted share, in the year-earlier period, the company reported.
Dollar Tree topped an analyst average estimate for the quarter published by Zacks Investment Research, which called for earnings of $1.19 per adjusted diluted share and revenues of $4.54 billion.
Comparable sales grew 5.4% in the quarter year over year on a 2.5% traffic increase and a 2.8% average ticket increase. Net sales were $4.64 billion versus $4.17 billion in the year-previous period. Other revenues totalled $3.2 million versus $3.3 million in the year-past quarter. Operating income was $384.1 million versus $381.9 million in the period a year before while adjusted operating income was $387.8 million versus $382.6 million.
Dollar Tree maintained the company’s full year guidance for net sales from continuing operators of $18.5 billion to $19.1 billion based on comp growth in the 3% to 5% range, and it lifted the diluted EPS from continuing operations outlook, now at $5.15 to $5.65, up from $5 to $5.50.
In a conference call, Dollar Tree executives indicate second-quarter profits could be lower year over year due to tariffs, but the company has plans in place to manage duty costs. As for the Family Dollar sale, expectations are for an early summer close, Dollar Tree reported.
“Our strong first-quarter performance underscores the progress we’ve made against our strategic priorities and is a clear signal that our customers are responding positively to the changes we are making,” said Mike Creedon, Dollar Tree CEO. “History has shown that we have the resilience to emerge stronger from periods of economic uncertainty, and in today’s rapidly evolving environment, we see a meaningful opportunity to further elevate the value, convenience and discovery that our customers depend on Dollar Tree to provide.”
