Dollar Tree, Inc. (NASDAQ:DLTR) posts inline earnings for the third quarter

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Dollar Tree, Inc. (NASDAQ:DLTR) stock rose 0.35% (As on Nov 24, 11:21:56 AM UTC-4, Source: Google Finance) after the company posted inline earnings for the third quarter of FY 21. Net income for the company fell to $216.8 million in the quarter ended Oct. 30 from $330.0 million, a year earlier. The company will start selling most products for $1.25 at all its eponymous stores, in an effort to offset the impact of spiraling freight costs and other pandemic-driven challenges. The retailer said the new price point, which will be fully rolled out by the first quarter of 2022, would allow it to return to “its historical gross margin range” of 35% to 36% next year. The higher price point allows the discounter to expand assortments, introduce new products and sizes as well as bring back “traffic-driving” products. Dollar Tree, known for selling everything from make-up to homeware at the $1 price-point, in September said it planned on adding new price points above $1 across some of its stores.

Meanwhile, rising freight costs from global supply chain disruptions have dented profits for most of Corporate America, further pressuring many retailers already grappling with higher labor and raw material costs. Dollar Tree said that freight costs were significantly higher than anticipated in the third quarter and expects this to continue in the near term.

DLTR in the third quarter of FY 21 has reported the adjusted earnings per share of 96 cents, which is inline with the analysts’ estimates for the adjusted earnings per share of 96 cents, according to figures compiled by Thomson Reuters. The company had reported the adjusted revenue growth of 3.9 percent to $6.42 billion in the third quarter of FY 21, beating the analysts’ estimates for revenue of $6.41 billion. This comprised of $3.42 billion at Dollar Tree and $3 billion at Family Dollar. Enterprise same-store sales increased 1.6% as we cycled a 5.1% increase from a year ago, representing a 6.7% increase on a two-year stacked basis. Comps for the Dollar Tree segment increased 0.6%. Family Dollar same store sales increased 2.7% cycling a strong 6.4% increase from last year. On a two-year stacked basis, Dollar Tree comps increased 4.6%, which was 170 basis point improvement from Q2 and Family Dollar increased 9.1%. Gross profit was $1.76 billion for the quarter. Gross margin was 27.5% compared to 31.2% in the prior year’s quarter

The company projected fourth-quarter earnings per share of $1.69 to $1.79. Analysts on average were anticipating $1.75, according to Refinitiv IBES data.

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