Dollar Tree consolidated net sales increased slightly in the second quarter, up 1 percent to $6.34 billion compared to a year earlier, as the company remains focused on renovations of 800 Family Dollar stores and the rollout of 400 new or renovated combo stores.
Still, Dollar Tree said freight costs are expected to be up to $200 million more than projected at the end of the first quarter, and the retailer lowered its estimate for full-year earnings per share to between $5.40 and $5.60. In May, Dollar Tree said it expected earnings per share would range between $5.80 and $6.05.
Enterprise same-store sales dropped 1.2 percent on a constant currency basis but increased 6 percent on a two-year stacked basis. Same-store sales decreased 0.2 percent on a constant currency basis; same-store sales for subsidiary Family Dollar decreased 2.1 percent compared to one year earlier.
Net income was $282.4 million in the second quarter and diluted earnings per share for the quarter increased 11.8 percent to $1.23, compared to $1.10 per share in the prior year’s quarter.
Dollar Tree opened 131 new stores in the second quarter of fiscal 2021, expanded or relocated 30 stores and closed 37 stores. The company also completed 470 renovations to the Family Dollar H2 or Combo Store formats in those three months.
“We continued to see strong performance on the discretionary side of the business, and our key initiatives, including H2, Dollar Tree Plus and the new Combo Stores, are delivering compelling results,” President and CEO Michael Witynski said in the company announcement.
Consolidated net sales in the first six months of the year increased 2.0 percent to $12.82 billion from $12.56 billion in the same period last year. Enterprise same-store sales decreased 0.2 percent on a constant currency basis in the first half of the year.
Dollar Tree same-store sales increased 2.2 percent on a constant currency basis in the first six months of fiscal 2021. Same-store sales for Family Dollar decreased 2.5 percent in that time. Net income increased 29 percent to almost $657 million in the first half of the year.
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Competitor Dollar General announced in July that it is hiring its first chief medical officer and will add health and beauty items to its shelves across its network of 17,400 stores.