Dollar Tree(DLTR)2024-06-05 10:32Sales Performance - Consolidated net sales increased 4.2% to $7.63 billion, with enterprise same-store net sales up 1.0%[9] - Dollar Tree same-store net sales increased 1.7%, driven by a 2.8% increase in traffic[9] - Family Dollar same-store net sales increased 0.1%, driven by a 0.9% increase in traffic[9] - Total net sales increased to $7,626.4 million, up 4.2% from $7,319.5 million in the previous year[34] - Sales per square foot increased to $231, up from $219, with Dollar Tree at $235 and Family Dollar at $227[41] Profitability and Margins - Gross profit increased 5.3% to $2.35 billion, with gross margin expanding 30 basis points to 30.8%[10] - Operating income increased 0.2% to $420.6 million, with operating margin declining 20 basis points to 5.5%[12] - Dollar Tree segment gross profit margin improved to 35.4%, up from 35.3% year-over-year[34] - Family Dollar segment operating income increased significantly to $36.9 million, up from $8.8 million, with a margin improvement to 1.1% from 0.3%[34] - Adjusted operating income (Non-GAAP) for the 13 weeks ended May 4, 2024, was $435.6 million, representing 5.7% of total revenue, compared to $449.7 million (6.1%) for the same period in 2023[51] - Family Dollar segment's adjusted operating income (Non-GAAP) increased to $51.2 million (1.5%) for the 13 weeks ended May 4, 2024, up from $38.8 million (1.2%) in the same period in 2023[52] Earnings and Shareholder Returns - Adjusted diluted EPS was $1.43, down 2.7% from the prior year[13] - The company repurchased 2.5 million shares for $313 million[14] - Adjusted diluted earnings per share (Non-GAAP) for the 13 weeks ended May 4, 2024, was $1.43, down from $1.47 in the same period in 2023[55] - Adjusted net income (Non-GAAP) for the 13 weeks ended May 4, 2024, was $311.5 million, compared to $325.1 million for the same period in 2023[54] Store Operations and Portfolio Optimization - The company closed approximately 550 stores as part of portfolio optimization and expects to close an additional 150 stores by the end of fiscal 2024[20] - The company closed 529 stores in the first quarter, including 513 Family Dollar stores, as part of a store portfolio optimization review[40][45] - Selling square footage grew by 0.9% to 134.2 million, with Dollar Tree expanding by 4.8% while Family Dollar contracted by 3.5%[40] - The company incurred $17.5 million in store closure costs during the quarter, primarily related to the Family Dollar segment[47] - Store closure costs for the 13 weeks ended May 4, 2024, were $17.5 million, compared to $0 in the same period in 2023[51][54] Financial Outlook - Fiscal 2024 net sales outlook range is $31.0 billion to $32.0 billion, with adjusted diluted EPS expected to range from $6.50 to $7.00[4] Cash Flow and Capital Expenditures - Net cash provided by operating activities decreased to $695.7 million from $752.0 million in the prior year[38] - Capital expenditures increased to $472.2 million, up from $350.4 million, reflecting continued investment in the business[38] - Free cash flow (Non-GAAP) for the 13 weeks ended May 4, 2024, was $223.5 million, a decrease from $401.6 million in the same period in 2023[57] - Capital expenditures for the 13 weeks ended May 4, 2024, were $472.2 million, up from $350.4 million in the same period in 2023[57] - Net cash provided by operating activities (GAAP) for the 13 weeks ended May 4, 2024, was $695.7 million, down from $752.0 million in the same period in 2023[57] Costs and Expenses - Adjusted selling, general and administrative expenses for Family Dollar decreased to 23.8% of sales, down from 23.7%[49] - Legal reserve adjustments for the 13 weeks ended May 4, 2024, were a deduction of $2.5 million, compared to an addition of $30.0 million in the same period in 2023[51][54] - Adjusted effective tax rate (Non-GAAP) for the 13 weeks ended May 4, 2024, was 24.2%, compared to 23.3% in the same period in 2023[55] Losses and Insurance Recoveries - The company incurred $117.0 million in losses due to tornado damage to its Marietta distribution center, with expected insurance recoveries to fully offset the losses[17]