$DLTR (+1.34%) | Dollar Tree Q2 Earnings Highlights:
๐น Revenue: $7.37B (Est. $7.5B) ๐ด; UP +0.7% YoY
๐น Adj Diluted EPS: $0.67 (Est. $1.06) ๐ด
๐น Adjusted Net Income: $143.4M
FY2025 Guidance:ย
๐น Revenue: $30.6B - $30.9B (Est. $31.19B) ๐ด
๐น Adj Diluted EPS: $5.20 - $5.60 (Est. $6.55) ๐ด
Key Metrics:ย
๐น Same-Store Net Sales Growth: Enterprise +0.7%, Dollar Tree +1.3%, Family Dollar -0.1%
๐น Operating Income: $203.1M; DOWN -29.4% YoY
๐น Adjusted Operating Income: $218.1M; DOWN -24.2% YoY
๐น Gross Profit: $2.21B; UP +3.7% YoY
๐น Gross Margin: 30.0%; UP 80 basis points
๐น Selling, General, and Administrative Expenses: 27.3% of revenue (Q2 FY2023: 25.3%)
๐น Cash Flow from Operations: $307M
๐น Shares Repurchased: 0.75 million shares for $90.8M
Business Highlights:ย
๐ธ Opened 127 new Dollar Tree stores and 28 new Family Dollar stores.
๐ธ Converted approximately 1,600 Dollar Tree stores to an in-line multi-price format.
๐ธ Generated $307 million in net cash from operating activities.
๐ธ Repurchased 0.75 million shares for $90.8 million.
CEO Rick Dreiling's Commentary:ย
๐ธ "We are encouraged by the continuous progress we are making in the transformation underway at Dollar Tree and Family Dollar, despite immense pressures from a challenging macro environment. Customers are responding favorably to initiatives like our expanded multi-price offering and we are already seeing a meaningful sales lift at the 1,600 Dollar Tree stores that have been converted to our newest in-line multi-price format."
CFO Jeff Davis' Insight:ย
๐ธ "Our adjusted EPS of $0.67 was $0.38 below the midpoint of our previous outlook range. While the vast majority of this variance was attributable to an adjustment of our general liability accrual, a portion was attributable to a comp shortfall which reflected the increasing effect of macro pressures on the purchasing behavior of Dollar Treeโs middle- and higher-income customers."
Strategic Updates:ย
๐ธ Ongoing review of strategic alternatives for the Family Dollar business segment, including potential sale, spin-off, or other disposition.
๐ธ Implemented a comprehensive store portfolio optimization review, resulting in the closure of approximately 655 underperforming Family Dollar stores, with plans to close an additional 45 stores by the end of FY2024.
๐ธ Tornado damage at the Marietta, Oklahoma distribution center led to $117M in losses, fully offset by insurance recoveries.
Revised FY2024 Outlook:ย
๐ธ The updated full-year guidance reflects Q2 results, a more conservative sales outlook, incremental conversion costs for recently acquired 99 Cents Only Stores leases, and higher depreciation and amortization expenses.
