The Dollar Tree chain has reported better-than-expected results for its fiscal fourth quarter, helped by an improved performance at the Family Dollar Stores banner.
For the three months to 28 January, net profit surged up 40.5% to $321.8m, even as operating profit was up 24.9% to $586.5m. Meanwhile, net sales grew by 5% to $5.6bn, on like-for-like growth of 1.3% (constant-currency basis), helped by a rise in store traffic and average ticket spend.
For the full year, the group recorded a net profit of $896.2m, operating profit of $1.7bn, and net sales of $20.7bn. The figures were boosted by the addition of the Family Dollar figures, as well as the opening of 584 new stores.
CEO Bob Sasser noted: “We are pleased with our overall performance for fiscal 2016. We believe we are extremely well positioned in the most attractive sector of retail to deliver increased value for our long-term shareholders … With two great banners, we can effectively grow our store base and serve more customers across a broad geography and a diverse demographic population with the products they need and want.”
Sasser however stressed that there is scope for improvement, particularly at the Family Dollar outlets. He noted: “Our in-stocks, what our customer sees on the shelf, is certainly better than where we started 18 months ago. And our efforts to catch up on some of the deferred maintenance and cleaning and the basics that we need to run a full, clean, recovered store are in place.”
For fiscal 2017, the company has forecast net sales of $21.94bn to $22.33bn, with LFL sales expected to be flat to up by a low single-digit. It also announced capital expenditures of $760m-$780m for the year.