Dollar Tree(US:DLTR) Benzingaยท2025-06-04 12:35Core Insights - Dollar Tree Inc. reported a strong first-quarter 2025 earnings performance, with net sales increasing by 11.3% to $4.6 billion, surpassing both consensus and management guidance [1] - The company experienced a same-store net sales growth of 5.4%, driven by a 2.5% increase in traffic and a 2.8% increase in average ticket [1] Financial Performance - Adjusted earnings per share (EPS) were reported at $1.26, exceeding analyst estimates of $1.21 and management expectations of $1.10 to $1.25 [2] - Gross profit rose by 11.7% to $1.6 billion, with gross margin expanding by 20 basis points to 35.6% due to lower freight and improved mark-on [3] - Adjusted operating income increased by 1.4% to $387.8 million, while adjusted operating margin contracted by 80 basis points to 8.4% [3] Strategic Developments - The company agreed to sell the Family Dollar business for $1.007 billion, with net proceeds estimated at approximately $800 million and expected tax benefits of around $350 million [4] - Dollar Tree reaffirmed its fiscal year 2025 sales guidance of $18.5 billion to $19.11 billion, based on comparable store net sales growth of 3% to 5% [5] Earnings Guidance - The adjusted earnings guidance was raised from $5.00-$5.50 per share to $5.15-$5.65 per share, compared to analysts' estimate of $5.21 [6] - The company anticipates a year-over-year decline in second-quarter adjusted EPS from continuing operations of 45% to 50%, with expectations of re-acceleration in the third and fourth quarters [8] Market Outlook - Dollar Tree expects Q2 comparable net sales growth to be towards the higher end of its full-year outlook range of 3% to 5% [7] - The company updated its fiscal year 2025 sales growth expectations to approximately 3.7% to 4.7%, up from a previous expectation of 3.4% to 4.4% [9] - Same-store sales growth is now expected to be approximately 1.5% to 2.5%, an increase from the previous expectation of 1.2% to 2.2% [10]