Dollar Tree Q3 Results Rise; Lifts FY25 Adj. EPS Outlook, But Tightens Sales View

(RTTNews) - Discount store retailer Dollar Tree, Inc. (DLTR), while reporting higher third-quarter profit and same-store net sales, on Wednesday issued fourth-quarter outlook, and raised fiscal 2025 adjusted earnings view above market estimates. Further, the firm tightened outlook for net sales and same-store net sales growth.

In the pre-market activity on the Nasdaq, the shares were gaining around 2.12 percent to trade at $111.30.

Mike Creedon, Chief Executive Officer, said, "Our multi-price strategy drove strong momentum across our business in the third quarter and helped deliver an all-time record Halloween season. … With 85 percent of our assortment priced at two dollar or less, we continue to deliver exceptional value, while our multi-price assortment allows us to offer even more high-quality products and great gift options for the holidays."

For the fourth quarter, the company projects adjusted earnings per share from continuing operations to be in the range of $2.40 to $2.60, with net sales in the range of $5.4 billion to $5.5 billion, based on comparable store net sales growth of 4.0 percent to 6.0 percent.

The Wall Street analysts forecast the company to earn $2.41 per share, on revenue of $5.42 billion for the quarter. Analysts' estimates typically exclude special items.

Further, for fiscal 2025, Dollar Tree now expects adjusted earnings per share from continuing operations in a range of $5.60 to $5.80 to reflect the current operating environment, higher than previous estimate of $5.32 to $5.72 per share.

Net sales from continuing operations for the year are now projected to be in the range of $19.35 billion to $19.45 billion, based on comparable store net sales growth range of 5.0 percent to 5.5 percent.

Previously, annual sales from continuing operations were expected to be in the range of $19.3 billion to $19.5 billion, based on comparable store net sales growth of 4 percent to 6 percent.

Analysts project earnings of $5.51 per share on revenue of $19.32 billion for fiscal 2025.

In the third quarter, Dollar Tree's net income totaled $244.6 million or $1.20 per share, higher than $232.3 million or $1.08 per share last year.

Adjusted earnings were $246.1 million or $1.21 per share for the period, compared to $1.08 a year ago.

Analysts projected earnings of $1.08 per share for the quarter.

Operating income increased 3.8 percent year-over-year to $343.3 million, while operating margin decreased 40 basis points to 7.2 percent. Adjusted operating income increased 4.1 percent to $345.3 million, while adjusted operating margin decreased 30 basis points to 7.3 percent.

The company's revenue for the period rose 9.4 percent to $4.751 billion from $4.341 billion last year.

Net sales grew to $4.746 billion from $4.338 billion a year ago.

Same-store net sales increased by 4.2 percent, driven by a 4.5 percent increase in average ticket and a 0.3 percent decline in traffic.

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