Dollar Tree confirms net earnings go up 9.2% in Q2

25 Aug '05

3 min read

Discount retailer Dollar Tree Stores Inc reported net earnings per diluted share of $0.25, for the fiscal second quarter ended July 30, 2005. Sales for the quarter were $769.0 million, a 9.2% increase compared to $704.2 million, for the same period, one year ago. Comparable store sales declined 1.5% for the quarter.

"An increase in our average ticket was more than offset by reduced store traffic," said President and CEO Bob Sasser. "While they achieved sales within most recent guidance, it is evident that our customers continue to feel the strain of rising fuel costs, and they are responding with fewer shopping trips. They remain focused on our sales initiatives as company manage all aspects of the business."

For the second quarter, gross margin was 34.0%, compared to 35.6% in last year's second quarter. Loss of leverage on occupancy costs, coupled with higher merchandise costs resulting from mix and higher freight costs attributed to most of the decline. The 2004 second quarter results also included a favorable shrink true-up which accounted for the balance of the rate decline in the year-on-year comparison.

Selling, general and administrative expenses, as a percentage of sales, were 27.9% in the second quarter of 2005, compared to 28.6% in the same quarter last year. The improvement in rate reflects the Company's continual dedication to expense control as well as meaningful savings in health care costs and workers compensation expenses.

It is also noteworthy that depreciation expense, as a percent of sales, was flat for the quarter, when compared to last year.

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