DLTR Dollar Tree Inc

Dollar Tree Inc. provided upbeat top- and bottom-line guidance for the current quarter, and same-store sales fared better than expected in the latest period.

Shares, down 14% over the past three months, shot up 8.7% premarket to $89.11.

The company estimates sales for the fourth quarter in the range of $5.59 billion to $5.69 billion, based on low single-digit increases in same-store sales for the Dollar Tree and Family Dollar segments. Per-share earnings are expected in the range of $1.24 to $1.33, an increase from the prior implied guidance of $1.21 to $1.30. Analysts are expecting $1.29 a share.

Sales for the year are now expected to be between $20.67 billion and $20.77 billion compared with the company's previous range of $20.69 billion to $20.87 billion. The company now anticipates per-share earnings will range between $3.67 and $3.76 a share, bringing down the top end of its guidance from $3.82 a share, which didn't include 9 cents a share of expenses related to debt refinancing incurred in the third quarter.

"I am encouraged by our continued progress in building the foundation for a larger, stronger and more profitable Family Dollar business," Chief Executive Bob Sasser. He said the integration of that business, for which Dollar Tree signed a deal last year, continues to progress.

"The stores are cleaner, the values are greater and our customer feedback scores regarding merchandise assortments and in-stocks have improved," he said.

Mr. Sasser said the company is well-positioned and prepared for the holiday selling season.

Like rival Dollar General Corp., Dollar Tree has generally benefited over the past year from rising wages among core customers. Sales and traffic have been up in the sector, in contrast to trends across the larger retail space.

Weaker results in the previous quarter, dragged by declining traffic, had stoked fears that discount retailers are also vulnerable to the trend of dwindling consumer spending in brick-and-mortar stores. But same-store sales increased 1.7% in the October period, compared with a 2.1% increase a year ago. Analysts, on average, had expected 1.2% growth in the latest quarter.

In all, Dollar Tree reported a third quarter profit of $171.6 million, or 72 cents a share, up from 81.9 million, or 35 cents a share, a year earlier. The quarter included 9-cent per-share dent for debt refinancing. Adjusted earnings were 81 cents a share, in line with the company's guidance range of 76 cents to 82 cents a share.

Revenue edged 1.1% higher to $5 billion. Analysts were looking for $5.07 billion in sales, according to Thomson Reuters.

Gross margin improved to 30.4% from 28.3%, helped by lower merchandise and freight costs.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

November 22, 2016 09:55 ET (14:55 GMT)

Dollar Tree (NASDAQ:DLTR)
Historical Stock Chart
From Mar 2024 to Apr 2024

Dollar Tree (NASDAQ:DLTR)
Historical Stock Chart
From Apr 2023 to Apr 2024