Who needs comps when profits are $3.4 billion?
So maybe the Walmart U.S. isn’t lighting things up on the same-store sales front just yet; the division did manage to grow total sales by 0.6% to $62.7 billion and increase operating profits by 0.8% to $4.65 billion. This despite the fact that division president and CEO Bill Simon noted the paycheck cycle remains pronounced, and higher year-over-year gas prices are eating into the disposable income of the company’s core shoppers who are consolidating trips.
“During the quarter, we saw continued pressure from ongoing macroeconomic conditions as customers continued to trade down to opening price points and some private label products,” Simon said.
The modest sales and operating profit growth at the U.S. division contributed to an overall company performance that saw earning per share increase to 98 cents from 87 cents. Total net income grew 3.8% to $3.4 billion on sales that increased 4.4% to $103.4 billion.
Earnings per share calculations benefitted from the company’s ongoing activity in the market. Roughly $2.1 billion was spent during the first quarter to purchase approximately 39.3 million Walmart shares. Only about $2.7 billion remains on the original $15 billion share repurchase program authorized last year at this time so expectations in the financial community are high the program will be recharged with an announcement regarding the size of the new program coming around the time of this year’s shareholders’ meeting on June 3.
Dollar Tree continues strong earnings streak
CHESAPEAKE, Va. — Dollar Tree reported 34.4% year-over-year EPS growth for the first quarter of 2011.Earnings per diluted share for the first quarter were 82 cents, compared with earnings per diluted share of 49 cents reported for the quarter ended May 1, 2010, which included a non-recurring, non-cash charge of $26.3 million relating to a retail inventory accounting change in the first quarter 2010.
The company reported that consolidated net sales for the first quarter were $1.55 billion, a 14.3% increase compared with $1.35 billion reported for the quarter ended May 1, 2010. Comparable-store sales increased 7.1%, on top of a 6.5% increase for the first quarter 2010.
“I am pleased by Dollar Tree’s continuing growth in sales and earnings,” president and CEO Bob Sasser said. “Our business momentum was strong throughout the first quarter. Seasonal performance was outstanding from Valentine’s through Easter. Both traffic and ticket increased as more customers continue to rely on Dollar Tree for great merchandise values and a fun, convenient shopping experience."
During the first quarter, Dollar Tree opened 83 stores, closed 7 stores, and expanded or relocated 41 stores. Retail selling square footage increased 9% compared with a year ago, to 36 million sq. ft.
Dollar Tree said it estimates sales for the second quarter of 2011 to be in the range of $1.51 billion to $1.55 billion, based on low –to- mid single digit positive comparable-store sales. Diluted earnings per share are estimated to be in the range of 68 cents to 75 cents.