Dollar Tree’s net income climbs to £198.39 million in the fiscal second quarter

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Written on Aug 27, 2020

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Dollar Tree’s net income climbs to £198.39 million in the fiscal second quarter.
The discount stores chain tops analysts' estimates for earnings and revenue.
Dollar Tree refrains from giving future guidance due to COVID-19 uncertainty.

Dollar Tree (NASDAQ: DLTR) published its quarterly financial results on Thursday that came in stronger than what the analysts had anticipated for its second quarter. The company, however, acknowledged that customer visits were still under pressure due to COVID-19.

Shares of the company opened more than 4.5% down on Thursday. The stock slid another 1% in the next hour. At £75 per share, Dollar Tree is currently more than 5% up year to date in the stock market after recovering from a low of £49.75 per share in March when the impact of the health crisis was at its peak. Learn more about the financial analysis of a company.

Dollar Tree’s Q2 financial results versus analysts’ estimates

Dollar Tree said its net income in the fiscal Q2 came in at £198.39 million that translates to 83 pence a share. In the same quarter last year, its net income was capped at £136.79 million or 57.66 pence per share.

In terms of sales, the company recorded an increase from £4.35 billion last year to £4.76 billion in the fiscal second quarter. According to FactSet, experts had anticipated the company to note 69.80 pence of earnings per share on £4.72 billion of revenue in the recent quarter.

According to Dollar Tree, its comparable-store sales in Q2 were 7.2% higher on an annualised basis versus a lower 6.2% growth expected. The namesake Dollar Tree stores reported a 3.1% increase in same-store sales in the second quarter while Family Dollar stores posted an even higher 11.6% growth in same-store sales on a year over year basis.

The American chain of discount variety stores refrained from giving guidance for the full year on Thursday due to the Coronavirus uncertainty. In separate news from the U.S., Tiffany & Co. also released its quarterly earnings report on Thursday.

CEO Mike Witynski’s remarks on Thursday

CEO Mike Witynski commented on the earnings report and said:

“Consumer shopping patterns are evolving. Customers are shopping with a purpose, while looking to minimise risk and exposure. As a result, we are seeing material increases in average ticket, while seeing a decline in average visits.”

Despite COVID-19 disruptions, Dollar Tree is likely to open around 500 new stores before the start of 2021.

At the time of writing, the Chesapeake-based company has a market cap of £17.81 billion and a price to earnings ratio of 19.26.