On June 5, 2024, Dollar Tree Inc (DLTR, Financial) released its 8-K filing reporting financial results for the first quarter of fiscal 2024, ended May 4, 2024. Dollar Tree operates discount stores across the United States and Canada, with over 8,400 shops under its namesake banner and 8,350 under Family Dollar. About 47% of Dollar Tree's sales in fiscal 2023 were composed of consumables, around 45% from variety items, and over 5% from seasonal items. The Dollar Tree banner sells most of its merchandise at the $1.25 price point, while Family Dollar primarily sells consumable merchandise at prices below $10.
Performance Overview
Dollar Tree Inc (DLTR, Financial) reported diluted earnings per share (EPS) of $1.38, falling short of the analyst estimate of $1.45. However, the company achieved adjusted diluted EPS of $1.43. Revenue for the quarter came in at $7.63 billion, surpassing the analyst estimate of $7.631 billion. Same-store net sales increased by 1.0%, with Dollar Tree segment up by 1.7% and Family Dollar segment up by 0.1%.
Financial Achievements and Challenges
Despite a soft Easter season, Dollar Tree Inc (DLTR, Financial) managed to deliver solid operating performance. The company opened 116 new Dollar Tree stores and 41 new Family Dollar stores, converted 926 Dollar Tree stores to in-line multi-price format, and generated $696 million of net cash from operating activities. However, the company faced challenges such as higher shrink and increased selling, general, and administrative expenses driven by temporary labor costs and store closure-related expenses.
Income Statement Highlights
| Metric | Q1 Fiscal 2024 | Change |
|---|---|---|
| Consolidated Net Sales | $7.63B | 4.2% |
| Operating Income | $420.6M | 0.2% |
| Diluted EPS | $1.38 | 2.2% |
| Adjusted Diluted EPS | $1.43 | -2.7% |
Balance Sheet and Cash Flow
Dollar Tree Inc (DLTR, Financial) reported total assets of $22.11 billion, with cash and cash equivalents of $618.5 million. The company generated $224 million of free cash flow and repurchased 2.5 million shares for $313 million. The company’s effective tax rate was 24.2%, and net income was $300.1 million.
Strategic Initiatives and Outlook
Dollar Tree Inc (DLTR, Financial) announced a review of strategic alternatives for its Family Dollar business segment, which could include a potential sale, spin-off, or other disposition. Additionally, the company is addressing the impact of a tornado that destroyed its distribution center in Marietta, Oklahoma, incurring losses of $117 million. The company expects these losses to be fully offset by insurance recoveries.
For fiscal 2024, Dollar Tree Inc (DLTR, Financial) reiterated its net sales outlook range of $31.0 billion to $32.0 billion and adjusted diluted EPS outlook range of $6.50 to $7.00. The company expects consolidated net sales for the second quarter to range from $7.3 billion to $7.6 billion, with adjusted diluted EPS estimated to be in the range of $1.00 to $1.10.
“We are pleased to deliver first quarter adjusted EPS results that are towards the high end of our outlook range,” said Rick Dreiling, Chairman and Chief Executive Officer. “At Dollar Tree we remain focused on rapidly rolling out our next generation of multi-price stores and at Family Dollar we are taking the steps necessary to position the business for long-term success.”
For more detailed financial information, readers can access the full 8-K filing.
Explore the complete 8-K earnings release (here) from Dollar Tree Inc for further details.
