~ Sales increased 65.9% to $5.00 Billion and Same-Store Sales
Increased 1.2% ~
~ Diluted Earnings per Share Increased to $0.72 ~
CHESAPEAKE, Va. -- (Business Wire)
Dollar Tree, Inc. (NASDAQ: DLTR), North America's leading operator of
discount variety stores, today reported results for its second fiscal
quarter ended July 30, 2016.
Second Quarter Results
Second quarter fiscal 2016 results include nine additional weeks of
operations for the Family Dollar segment when compared to the second
quarter of fiscal 2015, which included four weeks of operations
following the acquisition on July 6, 2015.
Net sales increased 65.9% to $5.00 billion from $3.01 billion in the
prior year’s second quarter. The $1.99 billion increase was the result
of an incremental $1.80 billion in net sales from Family Dollar stores,
sales from new Dollar Tree stores, and a 1.2% same-store sales increase,
on a constant currency basis. Same-store sales increased 2.7%, on a
constant currency basis, in the prior-year period. Adjusted for the
impact of Canadian currency fluctuations, the same-store sales increase
was 1.1%. The positive same-store sales growth was driven by increases
in customer count and average ticket.
Gross profit increased by $657.2 million, or 76.8%, to $1.51 billion in
the second quarter compared to $855.2 million in the prior year’s second
quarter. The increase included an incremental $588.4 million of gross
profit for Family Dollar and a 9.2% increase in Dollar Tree’s gross
profit for the quarter. As a percent of sales, gross margin increased to
30.3% compared to 28.4% in the prior year. The prior year’s second
quarter included $60.0 million of markdown expense related to product
assortment rationalization and planned liquidations at Family Dollar.
Selling, general and administrative expenses were 23.1% of sales
compared to 24.3% of sales in the prior year's second quarter. Excluding
$17.7 million of acquisition-related costs from the prior year’s period,
selling, general and administrative expenses, as a percent of sales,
improved to 23.1% from 23.7%. This 60 basis point improvement was the
result of lower payroll and operating and corporate expenses, as a
percent of sales, partially offset by higher store repairs and
maintenance expenses and depreciation expense.
Operating income increased 189.5% to $357.2 million compared with $123.4
million in the same period last year. Operating income margin increased
to 7.1% in the current quarter from 4.1% in last year’s quarter. This
increase in operating income is the result of an incremental $189.7
million of operating income in the Family Dollar segment, and a $44.1
million increase in operating income in the Dollar Tree segment.
The Company's effective tax rate for the quarter was 36.9% compared to a
benefit of 31.1% in the prior year period. The increase is primarily
attributable to a pre-tax loss in the second quarter of 2015.
Net income compared to the prior year's second quarter increased $268.2
million to $170.2 million, and diluted earnings per share increased to
$0.72.
Bob Sasser, Chief Executive Officer, stated, "I am very pleased with the
Company's overall performance in our second quarter. Through what
continues to be a challenging retail sales environment, we delivered
gross margin improvement and managed expenses effectively to deliver
earnings at the top end of our guidance range. In our Dollar Tree
segment, we improved our operating margin and delivered our 34th
consecutive quarter of positive same-store sales."
Sasser added, "Just over a year ago, we completed our acquisition of
Family Dollar and our integration continues to progress as planned. The
stores are cleaner, the values are greater and our merchandise
assortments are improving. Additionally, we are taking the necessary
steps to develop our shared services support model, and are continuing
our focus on cost-related synergy capture. As a combined organization,
we are well-positioned to better serve more customers, generate
significant cash flows and deliver long-term value to our shareholders.”
During the quarter, the Company opened 156 stores, expanded or relocated
52 stores, and closed 17 stores. Additionally, as part of its re-banner
initiative, the Company opened 47 former Family Dollar store locations
as new Dollar Tree stores. The Company also converted the remaining 32
Deals stores to Dollar Tree stores. Retail selling square footage at the
end of the quarter was approximately 110.8 million square feet.
First Six Months Results
Consolidated net sales increased 94.3% to $10.08 billion from $5.19
billion in the first six months of 2015. The $4.89 billion increase was
the result of $4.50 billion in incremental net sales from Family Dollar
stores, sales from new Dollar Tree stores, and a 1.7% same-store sales
increase, on a constant currency basis. Adjusted for the impact of
Canadian currency fluctuations, the same-store sales increase was 1.6%.
Gross profit increased $1.46 billion, or 91.2%, to $3.07 billion from
$1.60 billion in the first six months of 2015. As a percent of sales,
gross margin decreased by 50 basis points to 30.4% compared to the prior
year period.
Selling, general and administrative expenses were 22.7% of sales
compared to 24.1% of sales in the first six months of 2015. Excluding
$28.1 million of acquisition-related costs from the first six months of
2015, selling, general and administrative expenses, as a percent of
sales, improved to 22.7% from 23.5%.
Net income increased $431.3 million compared to the prior year's first
six months, resulting in net income of $1.70 per diluted share.
Company Outlook
The Company estimates consolidated net sales for the third quarter of
2016 to range from $5.02 billion to $5.10 billion, based on a low
single-digit increase in same-store sales. Diluted earnings per share
are estimated to be in the range of $0.76 to $0.82.
Consolidated net sales for full-year 2016 are now expected to range
between $20.69 billion and $20.87 billion compared to the Company’s
previously expected range of $20.79 billion to $21.08 billion. This
estimate is based on a low single-digit increase in same-store sales,
and 4.0% square footage growth. The Company now anticipates net income
per diluted share for full-year 2016 will range between $3.67 and $3.82.
This compares to its previous EPS guidance range of $3.58 to $3.80.
Conference Call Information
On Thursday, August 25, 2016, the Company will host a conference call to
discuss its earnings results at 9:00 a.m. Eastern Time. The telephone
number for the call is 888-427-9376. A recorded version of the call will
be available until midnight Thursday, September 1, 2016 and may be
accessed by dialing 888-203-1112. The access code is 1772942. A webcast
of the call is accessible through Dollar Tree's website, and will remain
online until Thursday, September 1, 2016.
Dollar Tree, a Fortune 200 Company, operated 14,129 stores across 48
states and five Canadian provinces as of July 30, 2016. Stores operate
under the brands of Dollar Tree, Family Dollar, and Dollar Tree Canada.
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 third quarter 2016 and full-year 2016 net sales and same-store
sales, third quarter 2016 and full-year 2016 diluted earnings per share,
square footage growth, the benefits, results, and effects of the merger
including synergies, and future financial and operating results and
shareholder value. 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
28, 2016 and 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 Statements of Operations |
(In millions, except per share data) |
(Unaudited) |
| | | | | | | |
|
| | 13 Weeks Ended | | 26 Weeks Ended |
| | July 30, 2016 | | August 1, 2015 (1) | | July 30, 2016 | | August 1, 2015 (1) |
| | | | | | | |
|
Net sales
| |
$
|
4,996.3
| | |
$
|
3,011.2
| | |
$
|
10,082.1
| | |
$
|
5,187.8
| |
| | | | | | | |
|
Cost of sales
| | |
3,483.9
| | | |
2,156.0
| | | |
7,015.2
| | | |
3,583.7
| |
| | | | | | | |
|
Gross profit
| | |
1,512.4
| | | |
855.2
| | | |
3,066.9
| | | |
1,604.1
| |
| | |
30.3
|
%
| | |
28.4
|
%
| | |
30.4
|
%
| | |
30.9
|
%
|
| | | | | | | |
|
Selling, general & administrative expenses
| | |
1,155.2
| | | |
731.8
| | | |
2,291.0
| | | |
1,247.8
| |
| | |
23.1
|
%
| | |
24.3
|
%
| | |
22.7
|
%
| | |
24.1
|
%
|
| | | | | | | |
|
Operating income
| | |
357.2
| | | |
123.4
| | | |
775.9
| | | |
356.3
| |
| | |
7.1
|
%
| | |
4.1
|
%
| | |
7.7
|
%
| | |
6.9
|
%
|
| | | | | | | |
|
Interest expense, net
| | |
87.3
| | | |
263.9
| | | |
174.6
| | | |
386.2
| |
Other (income) expense, net
| | |
-
| | | |
1.7
| | | |
(0.2
|
)
| | |
(0.9
|
)
|
| | | | | | | |
|
Income (loss) before income taxes
| | |
269.9
| | | |
(142.2
|
)
| | |
601.5
| | | |
(29.0
|
)
|
| | |
5.4
|
%
| | |
(4.7
|
%)
| | |
6.0
|
%
| | |
(0.6
|
%)
|
| | | | | | | |
|
Income tax expense (benefit)
| | |
99.7
| | | |
(44.2
|
)
| | |
198.7
| | | |
(0.5
|
)
|
Income tax rate
| | |
36.9
|
%
| | |
31.1
|
%
| | |
33.0
|
%
| | |
1.7
|
%
|
| | | | | | | |
|
Net income (loss)
| |
$
|
170.2
| | |
$
|
(98.0
|
)
| |
$
|
402.8
| | |
$
|
(28.5
|
)
|
| | |
3.4
|
%
| | |
(3.3
|
%)
| | |
4.0
|
%
| | |
(0.5
|
%)
|
| | | | | | | |
|
Net earnings (loss) per share:
| | | | | | | | |
Basic
| |
$
|
0.72
| | |
$
|
(0.46
|
)
| |
$
|
1.71
| | |
$
|
(0.14
|
)
|
Weighted average number of shares
| | |
235.6
| | | |
214.3
| | | |
235.5
| | | |
210.3
| |
| | | | | | | |
|
Diluted
| |
$
|
0.72
| | |
$
|
(0.46
|
)
| |
$
|
1.70
| | |
$
|
(0.14
|
)
|
Weighted average number of shares
| | |
236.7
| | | |
214.3
| | | |
236.6
| | | |
210.3
| |
| | | | | | | | | | | | | | | |
|
(1) For the 13 and 26 weeks ended August 1, 2015, Selling, general &
administrative expenses includes merger expenses of $17.7 million and
$28.1 million, respectively, related to the acquisition of Family Dollar
Stores, Inc. on July 6, 2015, and Interest expense, net includes
incremental costs incurred to the July 6, 2015 acquisition date in
connection with the repayment of pre-existing debt of $227.6 million and
$343.2 million, respectively. Excluding these acquisition-related
expenses, Net income (loss) and Diluted earnings (loss) per share for
the 13 and 26 weeks ended August 1, 2015 were $53.5 million and $0.25,
and $200.8 million and $0.95, respectively.
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
DOLLAR TREE, INC. |
Segment Information |
(In millions, except store count) |
(Unaudited) |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| | 13 Weeks Ended | | 26 Weeks Ended |
| | July 30, 2016 | | August 1, 2015 (a) | | July 30, 2016 | | August 1, 2015 (a) |
| | | | | | | | | | | | | | | | | | | | | | | |
|
Net sales: | | | | | | | | | | | | | | | | | | | | | | | | |
Dollar Tree
| | | |
$
|
2,387.5
| | | | | | |
$
|
2,199.6
| | | | | | |
$
|
4,772.0
| | | | | | |
$
|
4,376.2
| | | |
Family Dollar
| | | |
| 2,608.8 |
| | | | | |
| 811.6 |
| | | | | |
| 5,310.1 |
| | | | | |
| 811.6 |
| | |
Total net sales
| | | | $ | 4,996.3 |
| | | | | | $ | 3,011.2 |
| | | | | | $ | 10,082.1 |
| | | | | | $ | 5,187.8 |
| | |
| | | | | | | | | | | | | | | | | | | | | | | |
|
Gross profit: | | | | | | | | | | | | | | | | | | | | | | | | |
Dollar Tree
| | | |
$
|
818.1
| | | | | | |
$
|
749.3
| | | | | | |
$
|
1,638.8
| | | | | | |
$
|
1,498.2
| | | |
Family Dollar
| | | |
| 694.3 |
| | | | | |
| 105.9 |
| | | | | |
| 1,428.1 |
| | | | | |
| 105.9 |
| | |
Total gross profit
| | | | $ | 1,512.4 |
| | | | | | $ | 855.2 |
| | | | | | $ | 3,066.9 |
| | | | | | $ | 1,604.1 |
| | |
| | | | | | | | | | | | | | | | | | | | | | | |
|
Operating income (loss): | | | | | | | | | | | | | | | | | | | | | | | | |
Dollar Tree (b)
| | | |
$
|
262.5
| | | | | | |
$
|
218.4
| | | | | | |
$
|
543.1
| | | | | | |
$
|
451.3
| | | |
Family Dollar (b)
| | | |
| 94.7 |
| | | | | |
| (95.0 | ) | | | | | |
| 232.8 |
| | | | | |
| (95.0 | ) | | |
Total operating income (b)
| | | | $ | 357.2 |
| | | | | | $ | 123.4 |
| | | | | | $ | 775.9 |
| | | | | | $ | 356.3 |
| | |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| | 13 Weeks Ended | | 26 Weeks Ended |
| | July 30, | | August 1, | | July 30, | | August 1, |
| | 2016 | | 2015 | | 2016 | | 2015 |
| | Dollar Tree | | Family Dollar | | Total | | Dollar Tree | | Family Dollar | | Total | | Dollar Tree | | Family Dollar | | Total | | Dollar Tree | | Family Dollar | | Total |
Store Count: | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning
| |
6,049
| | | |
7,948
| | |
13,997
| | |
5,454
| | | |
8,284
| | |
13,738
| | |
5,954
| | | |
7,897
| | |
13,851
| | |
5,367
| | | |
8,284
| | |
13,651
| |
New
| |
99
| | | |
57
| | |
156
| | |
126
| | | |
15
| | |
141
| | |
211
| | | |
116
| | |
327
| | |
219
| | | |
15
| | |
234
| |
Rebanner (c)
| |
47
| | | |
(54
|
)
| |
(7
|
)
| |
4
| | | |
(18
|
)
| |
(14
|
)
| |
41
| | | |
(54
|
)
| |
(13
|
)
| |
4
| | | |
(18
|
)
| |
(14
|
)
|
Closings
| | (11 | ) | |
| (6 | ) | | (17 | ) | | (1 | ) | |
| - |
| | (1 | ) | | (22 | ) | |
| (14 | ) | | (36 | ) | | (7 | ) | |
| - |
| | (7 | ) |
Ending
| | 6,184 |
| |
| 7,945 |
| | 14,129 |
| | 5,583 |
| |
| 8,281 |
| | 13,864 |
| | 6,184 |
| |
| 7,945 |
| | 14,129 |
| | 5,583 |
| |
| 8,281 |
| | 13,864 |
|
Selling Square Footage (in millions)
| | 53.3 |
| |
| 57.5 |
| | 110.8 |
| | 48.3 |
| |
| 59.9 |
| | 108.2 |
| | 53.3 |
| |
| 57.5 |
| | 110.8 |
| | 48.3 |
| |
| 59.9 |
| | 108.2 |
|
Growth Rate (Square Footage)
| | 10.4 | % | |
| -4.0 | % | | 2.4 | % | | 7.8 | % | |
| 100.0 | % | | 141.5 | % | | 10.4 | % | |
| -4.0 | % | | 2.4 | % | | 7.8 | % | |
| 100.0 | % | | 141.5 | % |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
(a) The results of Family Dollar's operations are included from the July
6, 2015 acquisition date.
(b) For the 13 and 26 weeks ended August
1, 2015, Selling, general & administrative expenses includes merger
expenses of $16.5 million and $26.9 million, respectively, for the
Dollar Tree segment and $1.2 million for the Family Dollar segment
related to the acquisition of Family Dollar Stores, Inc. on July 6,
2015. Excluding these acquisition-related expenses, Operating income
(loss) for the 13 and 26 weeks ended August 1, 2015 was $234.9 million
and $478.2 million, respectively, for the Dollar Tree segment and
$(93.8) million for the Family Dollar segment.
(c) Stores are
included as rebanners when they close or open, respectively.
| | |
| | |
| | |
DOLLAR TREE, INC. |
Condensed Consolidated Balance Sheets |
(In millions) |
(Unaudited) |
| | | | | | | |
|
| July 30, | | January 30, | | August 1, |
|
| 2016 | | |
| 2016 | | |
| 2015 | |
| | | | | | | |
|
Cash and cash equivalents
|
$
|
1,093.2
| | |
$
|
736.1
| | |
$
|
1,302.5
| |
Short-term investments
| |
4.0
| | | |
4.0
| | | |
4.0
| |
Merchandise inventories, net
| |
2,975.1
| | | |
2,885.5
| | | |
2,825.1
| |
Current deferred tax assets, net
| |
-
| | | |
-
| | | |
85.5
| |
Other current assets
|
|
377.1
|
| |
|
310.3
|
| |
|
307.6
|
|
Total current assets
| |
4,449.4
| | | |
3,935.9
| | | |
4,524.7
| |
| | | | | | | |
|
Property and equipment, net
| |
3,174.2
| | | |
3,125.5
| | | |
3,151.9
| |
Assets available for sale
| |
13.5
| | | |
12.1
| | | |
-
| |
Goodwill
| |
5,023.8
| | | |
5,021.7
| | | |
4,982.8
| |
Favorable lease rights, net
| |
518.8
| | | |
569.4
| | | |
620.8
| |
Tradename intangible asset
| |
3,100.0
| | | |
3,100.0
| | | |
3,100.0
| |
Other intangible assets, net
| |
5.4
| | | |
5.8
| | | |
6.3
| |
Other assets
|
|
44.3
|
| |
|
130.8
|
| |
|
178.6
|
|
| | | | | | | |
|
Total assets
|
$
|
16,329.4
|
| |
$
|
15,901.2
|
| |
$
|
16,565.1
|
|
| | | | | | | |
|
| | | | | | | |
|
Current portion of long-term debt
|
$
|
145.5
| | |
$
|
108.0
| | |
$
|
83.0
| |
Accounts payable
| |
1,351.5
| | | |
1,251.9
| | | |
1,152.5
| |
Other current liabilities
| |
683.0
| | | |
722.6
| | | |
837.8
| |
Income taxes payable
|
|
-
|
| |
|
12.9
|
| |
|
-
|
|
Total current liabilities
| |
2,180.0
| | | |
2,095.4
| | | |
2,073.3
| |
| | | | | | | |
|
Long-term debt, net, excluding current portion
| |
7,155.7
| | | |
7,238.4
| | | |
8,265.5
| |
Unfavorable lease rights, net
| |
136.6
| | | |
149.3
| | | |
162.4
| |
Deferred tax liabilities, net
| |
1,556.0
| | | |
1,586.6
| | | |
1,655.1
| |
Income taxes payable, long-term
| |
73.6
| | | |
71.4
| | | |
34.4
| |
Other liabilities
|
|
370.6
|
| |
|
353.2
|
| |
|
327.4
|
|
| | | | | | | |
|
Total liabilities
|
|
11,472.5
|
| |
|
11,494.3
|
| |
|
12,518.1
|
|
| | | | | | | |
|
Shareholders' equity
|
|
4,856.9
|
| |
|
4,406.9
|
| |
|
4,047.0
|
|
| | | | | | | |
|
Total liabilities and shareholders' equity
|
$
|
16,329.4
|
| |
$
|
15,901.2
|
| |
$
|
16,565.1
|
|
| | | | | | | | | | |
|
The January 30, 2016 information was derived from the audited
consolidated financial statements as of that date.
|
| |
| |
DOLLAR TREE, INC. |
Condensed Consolidated Statements of Cash Flows |
(In millions) |
(Unaudited) |
| | 26 Weeks Ended |
| | July 30, | | August 1, |
| |
| 2016 |
| |
| 2015 |
|
| | | |
|
| | | |
|
Cash flows from operating activities:
| | | | |
Net income (loss)
| |
$
|
402.8
|
| |
$
|
(28.5
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
| | |
Depreciation and amortization
| | |
324.2
| | | |
137.6
| |
Provision for deferred taxes
| | |
(31.1
|
)
| | |
(17.6
|
)
|
Amortization of debt discount and debt-issuance costs
| | |
9.5
| | | |
4.7
| |
Other non-cash adjustments to net income (loss)
| | |
43.1
| | | |
57.5
| |
Changes in operating assets and liabilities
| |
|
(68.2
|
)
| |
|
(178.1
|
)
|
Total adjustments
| |
|
277.5
|
| |
|
4.1
|
|
Net cash provided by (used in) operating activities
| |
|
680.3
|
| |
|
(24.4
|
)
|
| | | |
|
Cash flows from investing activities:
| | | | |
Capital expenditures
| | |
(355.9
|
)
| | |
(167.0
|
)
|
Increase in restricted cash
| | |
-
| | | |
(12.0
|
)
|
Acquisition of Family Dollar, net of common stock issued, equity
compensation and cash acquired
| | |
-
| | | |
(6,525.6
|
)
|
Purchase of restricted investments
| | |
(36.1
|
)
| | |
-
| |
Proceeds from sale of restricted investments
| | |
118.1
| | | |
-
| |
Proceeds from (payments for) fixed asset disposition
| |
|
1.5
|
| |
|
(0.3
|
)
|
Net cash used in investing activities
| |
|
(272.4
|
)
| |
|
(6,704.9
|
)
|
| | | |
|
Cash flows from financing activities:
| | | | |
Principal payments for long-term debt
| | |
(54.0
|
)
| | |
(935.2
|
)
|
Proceeds from long-term debt, net of discount
| | |
-
| | | |
8,200.0
| |
Debt-issuance costs
| | |
(0.7
|
)
| | |
(88.9
|
)
|
Proceeds from stock issued pursuant to stock-based compensation plans
| | |
22.7
| | | |
3.9
| |
Cash paid for taxes on exercises/vesting of stock-based compensation
| | |
(19.9
|
)
| | |
(21.3
|
)
|
Tax benefit of exercises/vesting of stock-based compensation
| |
|
-
|
| |
|
10.0
|
|
Net cash provided by (used in) financing activities
| |
|
(51.9
|
)
| |
|
7,168.5
|
|
Effect of exchange rate changes on cash and cash equivalents
| |
|
1.1
|
| |
|
(0.8
|
)
|
Net increase in cash and cash equivalents
| | |
357.1
| | | |
438.4
| |
Cash and cash equivalents at beginning of period
| |
|
736.1
|
| |
|
864.1
|
|
Cash and cash equivalents at end of period
| |
$
|
1,093.2
|
| |
$
|
1,302.5
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160825005518/en/
Contacts:
Dollar Tree, Inc.
Randy Guiler, 757-321-5284
Vice President,
Investor Relations
www.DollarTree.com
DLTR-E
Source: Dollar Tree, Inc.
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