Frugal Shoppers Love Dollar Tree Discount Stores: American Recession Winner Shows Huge Gains for This Quarter « Frugal Café Blog Zone

Frugal Shoppers Love Dollar Tree Discount Stores: American Recession Winner Shows Huge Gains for This Quarter

Posted By on May 20, 2010

Dollar Tree storefront in Kalamazoo, Michigan | Photo credit: JJ Paint & Glass

Cash-strapped Americans are flocking to the discount variety stores that sell everything for a dollar or less, making them big winners during this never-ending economic recession. Frugal shoppers know that not everything at the various dollars stores in the country are necessarily a bargain, but a hefty percentage of the inventory is. And this is a prayer answered for millions of unemployed Americans who are desperately trying to keep their heads above the churning waters of financial disaster.

Dollar Tree is one of the biggest recession winners — it has a lot of “bang for the buck,” and today it reported that its sales are at 12.6% over the same quarter in 2009.

Dollar Tree’s quarter results, May 2010…

CHESAPEAKE, Va. – May 20, 2010 – Dollar Tree, Inc. (NASDAQ: DLTR), the nation’s leading operator of discount variety stores selling everything for $1 or less, reported its results for the quarter ended May 1, 2010 (“first quarter”) . Consolidated net sales for the first quarter were $1.35 billion, a 12.6% increase compared to $1.20 billion reported for the quarter ended May 2, 2009 (“first quarter 2009”). Comparable store sales increased 6.5%, on top of a 9.2% increase for the first quarter 2009.

Earnings per diluted share for the first quarter were $0.73, including a non-recurring, non-cash charge of $26.3 million, or $0.19 per diluted share, relating to the Company’s previously announced retail inventory change. Absent this charge, diluted earnings per share were $0.92, an increase of 39.4% compared to the $0.66 earnings per diluted share reported for the first quarter 2009.

“I am pleased with the continued momentum in our business,” President and CEO Bob Sasser said. “Both traffic and average ticket increased during the quarter driving sustained growth in sales and earnings. Leading categories in the first quarter included health and beauty care products, food, household consumables, and party goods.”

Operating margin for the quarter was 7.6%, including the aforementioned non-recurring, non-cash charge, which amounted to 190 basis points of gross margin. Excluding the charge, operating margin was 9.5%, a 140 basis point improvement from the 8.1% operating margin in the first quarter 2009.

Cash at quarter-end totaled approximately $339 million, compared with $355 million at the end of the first quarter 2009. During the first quarter, the Company expended $218 million for common stock repurchases, including a $200 million Accelerated Share Repurchase Program. At the end of the first quarter, $42.2 million remains under the $500 million share repurchase program authorized by the Board of Directors.

The Company continues to grow. During the first quarter, Dollar Tree opened 74 stores, closed 6 stores, and expanded or relocated 34 stores. Retail selling square footage increased 6.5% compared to a year ago, to 33.0 million square feet.

The Company estimates sales for the second quarter of 2010 to be in the range of $1.32 billion to $1.36 billion, based on low to mid single digit positive comparable store sales. Diluted earnings per share are estimated to be in the range of $0.77 to $0.85.

Full year sales are now estimated to be in the range of $5.67 billion to $5.80 billion and diluted earnings per share are expected to be $4.10 to $4.31, including the impact of the non-cash, non-recurring charge in the first quarter. Excluding the charge, diluted earnings per share for the full year 2010 are expected to be $4.29 to $4.50.

On Thursday, May 20, 2010, the Company will host a conference call to discuss its earnings results at 9:00 a.m. EDT. The telephone number for the call is 888-713-3592. A recorded version of the call will be available until midnight Thursday, May 27, and may be accessed by dialing 888-203-1112, and the access code is 2141527. A webcast of the call is accessible through Dollar Tree’s website, www.dollartreeinfo.com/investors/news/events and will remain online until midnight Thursday, May 27.

Dollar Tree, a Fortune 500 Company, operated 3,874 stores in 48 states as of May 1, 2010, with total retail selling square footage of 33.0 million.

From Dollar Tree’s website, on partner vendors:

Our vendors aren’t just vendors. They’re partners.

Since the day we opened our first store in 1986, Dollar Tree’s success has been a reflection of the company we keep. When it comes to offering our customers quality, value, and variety for $1, we believe in the strength of working with our vendors as partners to grow our respective businesses.

We believe that if you treat your vendor partners fairly and honestly, they will treat you the same way. In addition to our focus on ethical business practices, we strive to maintain a trustworthy and honest relationship with our vendors.

Related reading:
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The Stability of the Dollar Stores and the Importance of Grabbing Bargains When You See Them
More Sad Magazine Casualties Because of Economy… Gourmet Magazine, Modern Bride, Cookie, Elegant Bride
Unbelievable Food Bargains Thrill and Help Financially Strapped Customers: Bargain Bin, Phoenix, Arizona
99-Cent Only Store Gumption & Imagination… Delicious, Cheap Meals
One Potato, Two Potato: Frugality Reigns, Home Gardening on the Rise in America
Collection of Celebrities’ Frugal Recipes
The Pantry Principle and Other Prudent Ways to Stock Up and Save Money on Food
Great Depression Cooking Saves Money: CBS Interview with Grandmother Clara, Plus Holiday Artichokes (video)
Frugal Versions of Famous Soups: Ronald Reagan’s Hamburger Soup, Soup Nazi’s Cream of Sweet Potato Soup, and More
The A-Z of Making Vegetable Stock from Scratch
Designer Fashion Accessories for Less: Find High-End Fashion Rentals Online
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Chefs’ Culinary Secrets & Cooking Philosophies: Frugal Cooking Secrets of Gordon Ramsay, Paula Deen, America’s Test Kitchen, Jeff Smith, Michel Roux, Rachael Ray, Emeril Lagasse, Julia Child, and many others

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About the author

I'm a conservative frugalist. My priorities: Watchdogging the government, making sure our tax dollars are spent wisely, living within our budgets (at home and in Washington, DC), and adhering to our Constitution and the conservative principles upon which it was developed by our founding fathers. Also, loving God, my family, and my country. Be wise, be frugal. God bless America!      

Comments

7 Responses to “Frugal Shoppers Love Dollar Tree Discount Stores: American Recession Winner Shows Huge Gains for This Quarter”

  1. Marilyn says:

    I know the economy is REALLY bad where I live… our dollar store is closing its doors.

    • admin says:

      *shocked face*

      Crikey, what a tragedy. I’m so sorry to hear that, Marilyn – and to hear how bad it is in your neck of the woods.

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  5. Mike says:

    Very informative. Thx for the info!

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