Dollar Tree Plans Renovations Amid Strong Q4 Results

Dollar Tree’s fourth-quarter earnings were better than expected, as the company continues its upgrades to the Family Dollar portfolio and launches new initiatives, per reports.

The discount retailer said it plans to renovate around 1,250 stores to the “H2” format in fiscal year 2020. The format constitutes improved merchandise offerings, including Dollar Tree’s $1 merchandise sections, more party assortment items and an increased number of freezer and cooler doors.

In addition, the company plans to launch the multi-price Dollar TreePlus! 2.0 initiative, which it began piloting last year.

Dollar Tree reported a net income of $123 million, or 52 cents per share, for the quarter, which ended on Feb. 1. A year ago at this time, the company had lost $2.31 billion, or $9.69 per share. Adjusted earnings per share were $1.79, better than the Street estimates for $1.76.

Sales rose 1.8 percent to $6.32 billion, up from $6.21 billion last year, with analysts forecasting sales of $6.39 billion. Total same-store sales jumped 0.4 percent, while same-store sales at the Dollar Tree rose 1.5 percent and fell 0.8 percent at Family Dollar locations.

Dollar Tree CEO Gary Philbin said in a statement that Dollar Tree’s and Family Dollar’s support functions were working in unison, with just one leadership team between them. He said that will likely boost the company as a whole.

For the full year, Dollar Tree‘s sales increased 3.5 percent and hit $23.61 billion. Enterprise same-store sales increased 1.8 percent, while same-store Dollar Tree sales increased 2.3 percent and Family Dollar sales increased 1.4 percent. When adjusted for Canadian currency fluctuation impact, Dollar Tree’s sales had increased by 2.2 percent.

The company’s fiscal year 2020 outlook includes an expected incremental impact of $47 million related to tariffs, with almost all of it coming in the first half of the year.

The outlook also predicts that $15 million in new clean fuel regulations for ocean shipping will have an impact. There was no information on how the Coronavirus will impact Dollar Tree’s sales.