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Q4FY16 net up $22.4mn at Dollar Tree
Mar '16
For the fourth fiscal quarter ended January 30, 2016, net income at US retailer Dollar Tree rose $22.4 million over the prior fiscal's fourth quarter net income, however diluted earnings per share slipped 2.9 per cent.

In a press release, Dollar Tree said its net income for the three months to January 30, 2016 increased $22.4 million to $229.0 million, but, diluted earnings per share decreased by 2.9 per cent to $0.97.

Adjusted net income was nearly flat at $239.4 million and adjusted diluted earnings per share declined from $1.16 to $1.01 in the quarter under review.

Consolidated net sales increased 116.7 per cent year over year to $5.37 billion, a result of $2.68 billion in sales from the Family Dollar business.

Gross profit for the reporting quarter surged $734.5 million, or 80.0 per cent to $1.65 billion compared to $918.1 million in the earlier fiscal's fourth quarter.

“The increase was primarily driven by $673.7 million of gross profit for Family Dollar as well as higher sales at Dollar Tree,” the retailer explained in the press release.

As a percent of sales, gross margin however, decreased to 30.8 per cent compared to 37.1 per cent in the fiscal ago quarter.

“The primary contributors to the decrease were the impact of the overall lower-margin product mix for the Family Dollar business,” Dollar Tree added.

The retailer also attributed the dip to $15.9 million for Family Dollar, which relates to amortisation of stepped up inventory basis, and $11.5 million of planned markdowns associated with rebannering Deals stores.

Selling, general and administrative expenses climbed to 22.0 per cent of sales as against 21.6 per cent of sales in the fourth quarter of fiscal 2015.

Excluding $8.9 million of severance costs, as well as purchase accounting-related costs of $19.3 million and $16.0 million in depreciation for useful life and fixed asset revaluation, SG&A costs were 21.2 per cent.

During the quarter, the company opened 128 stores, expanded or relocated 53 stores, closed 28 stores and divested 325 Family Dollar stores.

Additionally, as part of its re-banner initiative, Dollar Tree opened 58 former Family Dollar store locations as new Dollar Tree stores during the quarter.

The Company also converted 52 Deals stores to Dollar Tree stores in January, while retail selling square footage at the end of the quarter was approximately 108.4 million square feet. (AR)

Fibre2fashion News Desk - India

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