$DLTR (+3,22 %) | Dollar Tree Q2 Earnings Highlights:
🔹 Revenue: $7.37B (Est. $7.5B) 🔴; UP +0.7% YoY
🔹 Adj Diluted EPS: $0.67 (Est. $1.06) 🔴
🔹 Adjusted Net Income: $143.4M
FY2025 Guidance:
🔹 Revenue: $30.6B - $30.9B (Est. $31.19B) 🔴
🔹 Adj Diluted EPS: $5.20 - $5.60 (Est. $6.55) 🔴
Key Metrics:
🔹 Same-Store Net Sales Growth: Enterprise +0.7%, Dollar Tree +1.3%, Family Dollar -0.1%
🔹 Operating Income: $203.1M; DOWN -29.4% YoY
🔹 Adjusted Operating Income: $218.1M; DOWN -24.2% YoY
🔹 Gross Profit: $2.21B; UP +3.7% YoY
🔹 Gross Margin: 30.0%; UP 80 basis points
🔹 Selling, General, and Administrative Expenses: 27.3% of revenue (Q2 FY2023: 25.3%)
🔹 Cash Flow from Operations: $307M
🔹 Shares Repurchased: 0.75 million shares for $90.8M
Business Highlights:
🔸 Opened 127 new Dollar Tree stores and 28 new Family Dollar stores.
🔸 Converted approximately 1,600 Dollar Tree stores to an in-line multi-price format.
🔸 Generated $307 million in net cash from operating activities.
🔸 Repurchased 0.75 million shares for $90.8 million.
CEO Rick Dreiling's Commentary:
🔸 "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:
🔸 "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 Tree’s middle- and higher-income customers."
Strategic Updates:
🔸 Ongoing review of strategic alternatives for the Family Dollar business segment, including potential sale, spin-off, or other disposition.
🔸 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.
🔸 Tornado damage at the Marietta, Oklahoma distribution center led to $117M in losses, fully offset by insurance recoveries.
Revised FY2024 Outlook:
🔸 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.
