Dollar Tree, Inc. (NASDAQ: DLTR), North America's leading operator of discount variety stores selling everything for $1 or less, reported its results for the quarter ended October 29, 2011 (“third quarter”) .
Consolidated net sales for the third quarter were $1.60 billion, an 11.9% increase compared to $1.43 billion reported for the quarter ended October 30, 2010 (“third quarter 2010”). Comparable store sales increased 4.8%, on top of an 8.7% increase for the third quarter 2010.
Earnings per diluted share for the third quarter were $0.87, an increase of 19.2% compared to the $0.73 earnings per diluted share reported for the quarter ended October 30, 2010.
"I am very pleased with the Company’s performance in the third quarter," said President and CEO Bob Sasser. “Dollar Tree achieved double-digit growth in sales, operating margin and earnings per share against a very strong performance last year. Our merchandising and store teams continue to deliver exciting products at great values and a fun, friendly, convenient shopping experience for our customers.”
Operating margin increased 40 basis points for the quarter to 10.3%.
Cash and investments at quarter-end totaled $280.2 million, compared with $392.0 million at the end of the third quarter 2010. During the third quarter, the Company repurchased 3.3 million shares for $249.1 million. Year-to-date, the Company repurchased 5.2 million shares for $345.9 million. The Company has $1.5 billion remaining on its share repurchase authorization.
During the third quarter, Dollar Tree opened 98 stores, expanded or relocated 24 stores, and closed 5 stores. Retail selling square footage increased 8.7% compared to a year ago, to 37.4 million square feet.
39-Week Period Results
Year-to-date through the three quarters ended October 29, 2011, the Company's consolidated net sales were $4.68 billion, a 12.7% increase compared with the same period in 2010. Comparable store sales increased 5.5%, on top of a 7.3% increase through three quarters last year.
Year-to-date earnings per diluted share were $2.45, compared with earnings per diluted share of $1.82 through three quarters last year. As we have previously disclosed, in the first quarter 2010 we recorded a nonrecurring, non-cash charge of $26.3 million relating to a retail inventory accounting change. Excluding this charge our earnings through three quarters last year were $1.95.
The Company estimates sales for the fourth quarter of 2011 to be in the range of $1.89 billion to $1.94 billion, based on low to mid single digit positive comparable store sales. Diluted earnings per share are estimated to be in the range of $1.50 to $1.57.
Full year sales are now estimated to be in the range of $6.57 billion to $6.62 billion. Diluted earnings per share are expected to be $3.94 to $4.01. The Company reported earnings per diluted share for fiscal 2010 of $3.10, including the aforementioned non-recurring, non-cash charge in the first quarter 2010. Excluding the charge, earnings per diluted share were $3.23 for fiscal 2010.
On Thursday, November 17, 2011, the Company will host a conference call to discuss its earnings results at 9:00 a.m. EST. The telephone number for the call is 800-750-4984. A recorded version of the call will be available until midnight Thursday, November 24, and may be accessed by dialing 888-203-1112, and the access code is 4249405. A webcast of the call is accessible through Dollar Tree's website, www.dollartreeinfo.com/investors/news/events, and will remain online until midnight Thursday, November 24.
Dollar Tree, a Fortune 500 Company, operated 4,335 stores in 48 states and 5 Canadian Provinces as of October 29, 2011. To learn more about the Company, visit www.DollarTree.com.
A WARNING ABOUT FORWARD-LOOKING STATEMENTS: Our press release contains "forward-looking statements" as that term is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address future events, developments or results and typically use words such as believe, anticipate, expect, intend, plan, forecast, or estimate. For example, our forward-looking statements include statements regarding fourth quarter and full year sales and fourth quarter and full year diluted earnings per share and fourth quarter comparable-store sales. For a discussion of the risks, uncertainties and assumptions that could affect our future events, developments or results, you should carefully review the “Risk Factors,” "Business," and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in our Annual Report on Form 10-K filed March 17, 2011, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other sections in our Quarterly Report on Form 10-Q filed August 18, 2011 and in our other filings with the Securities and Exchange Commission. We are not obligated to release publicly any revisions to any forward-looking statements contained in this press release to reflect events or circumstances occurring after the date of this report and you should not expect us to do so.
|DOLLAR TREE, INC.|
|Condensed Consolidated Income Statements|
|(Dollars in millions, except per share data)|
|Third Quarter Ended||Nine Months Ended|
|October 29,||October 30,||October 29,||October 30,|
Cost of sales, excluding non-cash beginning inventory adjustment
|Non-cash beginning inventory adjustment||-||-||-||26.3|
|Selling, general & administrative expenses||395.7||365.1||1,163.7||1,068.4|
|Interest expense, net||0.6||1.6||2.2||4.6|
|Other (income) expense, net||0.1||(5.4)||(0.1)||(5.1)|
|Income before income taxes||164.2||144.7||478.0||371.8|
|Income tax expense||59.7||51.5||177.6||137.0|
|Income tax rate||36.4%||35.6%||37.2%||36.8%|
|Net earnings per share:|
|Weighted average number of shares||119.8||126.9||121.6||127.8|
|Weighted average number of shares||120.7||127.8||122.4||128.7|
|DOLLAR TREE, INC.|
|Condensed Consolidated Balance Sheets|
|(Dollars in millions)|
|October 29,||January 29,||October 30|
|Cash and cash equivalents||$||280.2||$||311.2||$||309.5|
|Other current assets||46.9||44.2||39.5|
|Total current assets||1,332.5||1,333.3||1,366.4|
|Property and equipment, net||816.5||741.1||741.4|
|Deferred tax assets||15.0||38.0||40.0|
|Other assets, net||93.7||95.0||81.0|
|Current portion of long-term debt||$||15.5||$||16.5||$||16.5|
|Other current liabilities||209.0||190.5||227.3|
|Income taxes payable, current||10.7||64.4||19.5|
|Total current liabilities||587.1||532.8||566.5|
|Long-term debt, excluding current portion||250.0||250.0||250.0|
|Income taxes payable, long-term||15.2||15.2||14.8|
|Total liabilities and shareholders' equity||$||2,431.2||$||2,380.5||$||2,362.1|
|Number of stores open at end of period||4,335||4,101||4,009|
|Total selling square footage (in millions)||37.4||35.1||34.4|
|DOLLAR TREE, INC.|
|Condensed Consolidated Statements of Cash Flows|
|(Dollars in millions)|
|Nine Months Ended|
|October 29,||October 30,|
|Cash flows from operating activities:|
Adjustments to reconcile net income to net cash provided by operating activities:
|Depreciation and amortization||119.9||117.6|
|Other non-cash adjustments||49.3||40.5|
|Changes in working capital||(150.9||)||(218.1||)|
|Net cash provided by operating activities||318.7||174.8|
|Cash flows from investing activities:|
|Purchase of short-term investments||(6.0||)||(60.8||)|
|Proceeds from maturities of short-term investments||180.8||6.1|
|Purchase of restricted investments||(5.3||)||(36.4||)|
|Proceeds from maturities of restricted investments||5.3||52.0|
|Net cash used in investing activities||(22.0||)||(186.0||)|
|Cash flows from financing activities:|
Proceeds from stock issued pursuant to stock-based compensation plans
|Payments for share repurchases||(345.9||)||(275.9||)|
|Tax benefit of stock-based compensation||10.5||7.8|
Principal payments under long-term debt and capital lease obligations
|Net cash used in financing activities||(327.6||)||(250.9||)|
|Effect of exchange rate changes on cash and cash equivalents||(0.1||)||-|
|Net decrease in cash and cash equivalents||(31.0||)||(262.1||)|
|Cash and cash equivalents at beginning of period||311.2||571.6|
|Cash and cash equivalents at end of period||$||280.2||$||309.5|
Timothy J. Reid, 757-321-5284