Dollar Tree Profit Rises 10.5%, Topping Expectations
Dollar Tree Stores Wednesday reported a better-than-expected 10.5 percent rise in quarterly profit as more customers came to its discount stores to load up on Halloween and back-to-school items.
The retailer , which sells most of its merchandise for $1, said earnings for its fiscal third quarter, ended Nov. 3, were $35.9 million, or 38 cents per share, up from $32.5 million, or 32 cents per share, a year earlier.
Analysts, on average, had been expecting 37 cents per share, according to Reuters Estimates.
Earlier this month, Dollar Tree reiterated its forecast for earnings of 35 cents to 38 cents per share and said sales increased almost 10 percent to $997.8 million.
Comparable-store sales, which measure sales at stores open at least a year, rose 1.9 percent in the quarter.
The company said the sales gains were driven by more customers coming to its stores and spending more during their visits.
Dollar Tree has said it should benefit as consumers, facing rising food and fuel costs and the slumping housing market, seek out its low prices. But analysts say the retailer could face a tough holiday season as Wal-Mart Stores aggressively promotes its low prices to win sales.
For the fourth quarter, which includes the critical holiday season, Dollar Tree forecast sales of $1.31 billion to $1.35 billion and earnings per share of 99 cents to $1.06.
Analysts, on average, had been expecting $1.05 per share on revenue of $1.37 billion, according to Reuters Estimates.