Dollar Tree comes out on top
Higher customer spending and lower costs help drive better-than-expected fourth quarter sales and profit at Dollar Tree.
The discounter’s solid quarterly performance capped a year in which it opened 584 new stores and exceeded $20 billion in sales.
Dollar Tree reported net sales of $5.64 billion for the quarter ended Jan. 28, up 5.0% from $5.37 billion in the year-ago period.
Same-store sales increased 1.2% on a constant currency basis, driven by increases in comparable customer count and average ticket.
Same-store sales for the Dollar Tree banner increased 2.3% on a constant currency basis, and 0.2 for the Family Dollar banner.
Net income rose 41% to $321.8 million, or $1.36 per share, from $229 million, or 97 cents per share, a year earlier.
“We are pleased with our overall performance for fiscal 2016,” stated Bob Sasser, CEO. "For the fourth quarter, both the Dollar Tree and Family Dollar banners delivered positive growth in same-store sales. Gross margin and operating margin rates improved and EPS grew 40.2% from the prior year’s quarter, exceeding the upper end of our guidance range.”
For the full year, consolidated net sales increased 33.7% to $20.72 billion, from $15.50 billion in the prior year. The $5.22 billion increase was the result of $4.42 billion in incremental net sales from the acquired Family Dollar stores, sales from new Dollar Tree stores, and a 1.8% same-store sales increase.
Dollar Tree operated 14,334 stores across 48 states and five Canadian provinces as of January 28, 2017, with stores operating under the banners of Dollar Tree, Family Dollar, and Dollar Tree Canada.
Looking ahead, Dollar Tree estimates consolidated net sales for first quarter 2017 to range from $5.26 billion to $5.35 billion, based on a flat to low single-digit increase in same-store sales for the combined enterprise. Diluted earnings per share are estimated to be in the range of $0.91 to $0.98.
For fiscal 2017, the company estimates consolidated net sales will range from $21.94 billion to $22.33 billion, based on a flat to low single-digit increase in same-store sales and 3.9% square footage growth.
"We believe we are extremely well positioned in the most attractive sector of retail to deliver increased value for our long-term shareholders,” stated Sasser. “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. We have a resilient business model, a focused and energized leadership team, a lengthy runway for store growth, and tremendous opportunities to continue improving our businesses.”
We love the Dollar Tree stores in the Colorado Springs / Falcon CO areas, but wonder why the high lease cost(?) on Powers Blvd has kept Dollar Tree from locating any stores on Powers Blvd on the eastern edge of Colorado Springs? This is a huge inconvenience for us since we must drive 10 plus miles to the center, north, south, west sides of town or drive 14 miles to Falcon, CO to shop at Dollar Tree. Please ask Dollar Tree to be more aggressive on locating at least TWO stores on Powers Blvd near Palmer Park Blvd and another on Barnes Rd or Dublin Blvd which all intersect with Powers Blvd on the eastern edge of Colorado Springs. Thanks much!
Lowe’s surges in fourth quarter
Strengthened by strong holiday performance, a steadily recovering housing market and an increasingly omnichannel approach, Lowe¹s reported fourth quarter net sales of $15.8 billion, up 19.2% from $13.2 billion in the same quarter a year ago.
Net earnings for the quarter swelled to $663 million, up from $11 million in the fourth quarter of 2015.
Comparable sales increased 5.1% in the quarter.
"We achieved strong fourth quarter results, delivering comparable sales growth and adjusted earnings per share above our expectations," said Robert A. Niblock, Lowe's chairman, president and CEO. "We leveraged our omnichannel platform, customer experience design capabilities, and project expertise to drive strong holiday performance and capitalize on broad-based project demand throughout the quarter.²
For the full year, sales increased 10.1% to $65.0 billion. Net earnings were $3.1 billion compared to net earnings of $2.5 billion in fiscal 2015.
As of Feb. 3, Lowe's operated 2,129 home improvement and hardware stores in the United States, Canada and Mexico. The chain’s total retail selling space measures 213.4 million sq. ft.
Lowe¹s acquired Canadian retailer RONA and its 500 corporate and dealer owned stores in May 2016.
Last month, Lowe's rival Home Depot reported record sales and earnings, along with 6.3% jump in U.S. comp-store sales.
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Teen retailer beats Q4 earnings but gives downbeat view
American Eagle Outfitters topped earnings expectations amid a strong performance by its Aerie division, but issued a cautious note for fiscal 2017.
For the quarter ended Jan 28, the retailer reported better-than-expected earnings of $54.6 million, or 30 cents per share, down from $81.7 million, or 42 cents per share, a year earlier. Excluding one-time items, the chain has earnings of 39 cents per share, beating consensus analysts estimates by a penny.
Total net revenue decreased 1% to $1.10 billion from $1.11 billion last year, just missing expectations.
Total same-store sales grew 0.4% in the quarter, slightly better than expected, fueled by strong sales at its fast-growing intimates banner, Aerie. Same-store sales were down slighting at American Eagle’s namesake brand.
“Away from the balance sheet, the divergence in performance of AEO’s two brands is starker than ever,’ commented Carter Harrison, analyst at GlobalData Retail, commented that. “Aerie is a much younger brand and is still benefitting from its expansion into the market. We believe that its fresh take on lingerie – especially in the sense of using ordinary women as models and its body-positive advertising – is still striking a chord with consumers and is allowing it to take custom from other players. “
For the full year, American Eagle’s total net revenue increased 2% to $3.61 billion from $3.52 billion last year. Aerie saw double-digit sales growth throughout the year, the company said.
Consolidated comparable sales increased 3%, following a 7% increase last year.
The company ended the year with 943 namesake stores, which included 88 Aerie side-by-side locations. Additionally, it had 102 Aerie standalone stores and 176 licensed stores at year end.
Looking ahead, American Eagle said it expects a flat to a low-single-digit decline in comparable-store sales in its current first quarter and adjusted earnings of 15 cents to 17 cents a share. Analysts polled by Thomson Reuters were expecting 21 cents a share.
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