Upcoming AWS Coverage on Dollar General Post-Earnings Results

LONDON, UK / ACCESSWIRE / December 2, 2016 / Active Wall St. announces its post-earnings coverage on Dollar Tree, Inc. (NASDAQ: DLTR). The company posted its financial results for the third quarter fiscal 2016 (Q3 FY16) on November 22, 2016. The Chesapeake, Virginia-based company's net sales improved 1.1% y-o-y, whereas GAAP net income surged 109.5% y-o-y. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Dollar Tree's competitors within the Discount, Variety Stores space, Dollar General Corp. (NYSE: DG), will report its financial results for its fiscal 2016 third quarter ended October 28, 2016, on Thursday, December 1, 2016. AWS will be initiating a research report on Dollar General in the coming days.

Today, AWS is promoting its earnings coverage on DLTR; touching on DG. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=DLTR

http://www.activewallst.com/registration-3/?symbol=DG

Earnings Reviewed

Dollar Tree reported net sales of $5.00 billion in Q3 FY16 which came in above the $4.95 billion recorded in Q3 FY15. However, net sales numbers for Q3 FY16 lagged market consensus estimates of $5.06 billion. During the quarter, same-store sales growth was 1.7%, on a constant currency basis compared to a 2.1% increase in the prior year's same period. Additionally, this same-store sales growth marked the company's 35th consecutive quarter of positive same-store sales, driven by increases in comparable customer count and average ticket.

The discount variety stores' GAAP net income for Q3 FY16 came in at $171.6 million, or $0.72 per diluted share, compared to $81.9 million, or $0.35 per diluted share, in Q3 FY15. In the reporter quarter, Dollar Tree adjusted earnings were $0.81 per shares, which came in near the top-end of the company's guidance range of $0.76 per diluted share to $0.82 per diluted share and above Wall Street's consensus estimate of $0.79 per diluted share.

In Q3 FY16, the company inaugurated 153 stores, expanded or relocated 39 stores, and closed 10 stores. The company also opened 42 new Dollar Tree stores at former Family Dollar store locations, during the quarter. Additionally, retail selling square footage at the end of the quarter was approximately 112.0 million square feet.

Operating Metrics

For Q3 FY16, the company's gross margin came in at $1.52 billion, or 30.4% of net sales, compared to $1.40 billion, or 28.3% of net sales, in the year ago same period. The company's selling, general, and administrative expenses for both Q3 FY16 and Q3 FY15 came in at $1.18 billion. Additionally, the company's operating margin rose to $342.4 million, or 6.8% of net sales, in Q3 FY16 from $223.7 million, or 4.5% of net sales, in the prior year same period.

Segment Performance

During Q3 FY16, Dollar Tree segment's net sales grew to $2.47 billion from $2.27 billion in the previous year's same quarter. The segment's gross profit for Q3 FY16 was $857.3 million versus $772.2 million in previous year's comparable quarter. Additionally, the segment's operating income for the reported period stood at $286.0 million compared to $224.8 million in Q3 FY15.

Family Dollar segment contributed $2.53 billion to total net sales in Q3 FY16 compared to $2.67 billion in Q3 FY15. In the reported quarter, Family Dollar's gross profit came in at $663.2 million compared to $627.8 million in prior year's same quarter. Furthermore, the segment reported operating income of $56.4 million in Q3 FY16 compared to an operating loss of $1.1 million in Q3 FY15.

Cash Flow and Balance Sheet

In the nine months ended October 29, 2016, Dollar tree reported net cash provided by operating activities of $655.3 million compared to net cash used by operating activities $29.0 million in the first three quarters of FY15. As on October 29, 2016, the company had cash and cash equivalents balance of $733.8 million compared to a balance of $1.11 billion as on October 31, 2015. The company reported long-term debt of $6.94 billion in its books of accounts as on October 29, 2016, versus $8.25 billion as on October 31, 2015.

Total merchandise inventories as of October 29, 2016, stood at $3.27 billion compared to $3.19 billion at the end of Q3 FY15.

Earnings Outlook

In its guidance for Q4 FY16, Dollar Tree's expects consolidated net sales to be in the range of $5.59 billion to $5.69 billion, based on low single-digit same-store sales growth for the Dollar Tree and Family Dollar segments. Furthermore, the company updated its diluted EPS estimated range to $1.24 per share to $1.33 per share, from the prior guidance of $1.21 per share to $1.30 per share.

For full year FY16, Dollar Tree now projects consolidated net sales to be between $20.67 billion and $20.77 billion with diluted EPS in the range of $3.67 per share to $3.82 per share.

Stock Performance

At the closing bell, on Thursday, December 01, 2016, Dollar Tree's stock dropped 1.80%, ending the trading session at $86.57. A total volume of 4.34 million shares were traded at the end of the day, which was higher than the 3-month average volume of 2.88 million shares. In the last month and previous twelve months, shares of the company have advanced 15.61% and 13.85%, respectively. Moreover, the stock gained 12.11% since the start of the year. The stock has a PE ratio of 25.56 and has a market capitalization of $20.41 billion.

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