Dollar Tree, Inc. announces financial results for 3Q FY2016

  • Sales Increased 1.1% to $5.00 Billion and Same-Store Sales Increased 1.7% ~
  • Diluted Earnings per Share Increased 105.7% to $0.72 ~
  • Earnings Include Expenses of $0.09 per Share for Debt Refinancing

CHESAPEAKE, Va, 2016-Nov-23 — /EPR Retail News/ — Dollar Tree, Inc. (NASDAQ: DLTR), North America’s leading operator of discount variety stores, today (November 22, 2016) reported results for its third fiscal quarter ended October 29, 2016. For the quarter, the Company earned $171.6 million, or $0.72 per diluted share.

Bob Sasser, Chief Executive Officer, stated, “I am proud of our team’s achievements in our third quarter. Our results demonstrated a solid performance in our Dollar Tree segment, continued meaningful progress in our integration of Family Dollar, and our ability to refinance and pre-pay a portion of our outstanding debt in order to reduce future interest costs. After adding back $0.09 per share of expenses related to our debt refinancing, our operating performance of $0.81 per diluted share was near the top end of our third quarter EPS guidance range of $0.76 to $0.82.”

Third Quarter Results

Net sales increased 1.1% to $5.00 billion from $4.95 billion in the prior year’s third quarter. The prior year’s quarter included sales from 325 Family Dollar stores that were divested following the third quarter of 2015. Same-store sales increased 1.7%, on a constant currency basis, compared to a 2.1% increase in the prior-year period. Adjusted for the impact of Canadian currency fluctuations, the same-store sales increase was 1.8%. The same-store sales growth, representing the Company’s 35th consecutive quarter of positive same-store sales, was driven by increases in comparable customer count and average ticket.

Gross profit increased 8.6% to $1.52 billion in the quarter compared to $1.40 billion in the prior year’s third quarter. As a percent of sales, gross margin increased to 30.4% compared to 28.3% in the prior year. The improvement was driven primarily by lower merchandise and freight costs. The prior year’s third quarter included $13.0 million of markdown expense for Family Dollar related to product assortment rationalization and planned liquidations, and $38.4 million for Family Dollar related to the amortization of the stepped-up inventory basis.

Selling, general and administrative expenses were 23.6% of sales compared to 23.8% of sales in the prior year’s third quarter. Excluding $11.8 million of acquisition-related costs from the prior year’s period, selling, general and administrative expenses, as a percent of sales, remained consistent at 23.6%. Increases in store hourly payroll, as a percent of sales, were offset by lower professional fees and lower depreciation expense, as a percent of sales.

Operating income increased 53.1% to $342.4 million compared with $223.7 million in the same period last year. Operating income margin increased to 6.8% in the current quarter from 4.5% in last year’s quarter. This increase in operating income is the result of a $61.2 million increase of operating income in the Dollar Tree segment, and a $57.5 million increase in operating income in the Family Dollar segment.

The Company’s effective tax rate for the quarter was 25.5% compared to 34.3% in the prior year period. The lower tax rate included an expected one-time tax benefit of $21.4 million, or $0.09 per share, related to a state reduction in corporate tax rate.

Net income compared to the prior year’s third quarter increased $89.7 million, or 109.5%, to $171.6 million, and diluted earnings per share increased to $0.72.

During the quarter, the Company opened 153 stores, expanded or relocated 39 stores, and closed 10 stores. Additionally, as part of its re-banner initiative, the Company opened 42 former Family Dollar store locations as new Dollar Tree stores. Retail selling square footage at the end of the quarter was approximately 112.0 million square feet.

First Nine Months Results

Consolidated net sales increased 48.9% to $15.08 billion from $10.13 billion in the first nine months of 2015. The $4.95 billion increase was the result of $4.36 billion in incremental net sales from Family Dollar stores, sales from new Dollar Tree stores, and a 1.7% same-store sales increase, on a constant currency basis. Adjusted for the impact of Canadian currency fluctuations, the same-store sales increase was 1.6%.

Gross profit increased $1.58 billion, or 52.7%, to $4.59 billion from $3.00 billion in the first nine months of 2015. As a percent of sales, gross margin increased by 80 basis points to 30.4% compared to the prior year period.

Selling, general and administrative expenses were 23.0% of sales compared to 23.9% of sales in the first nine months of 2015.

Net income increased $521.0 million, to $574.4 million, compared to the prior year’s first nine months, resulting in net income of $2.43 per diluted share.

Company Outlook

The Company estimates consolidated net sales for the fourth quarter of 2016 to range from $5.59 billion to $5.69 billion, based on low single-digit increases in same-store sales for the Dollar Tree and Family Dollar segments. Diluted earnings per share are estimated to be in the range of $1.24 to $1.33, an increase from the prior implied guidance of $1.21 to $1.30.

Consolidated net sales for full-year 2016 are now expected to range between $20.67 billion and $20.77 billion compared to the Company’s previously expected range of $20.69 billion to $20.87 billion. This estimate is based on a low single-digit increase in same-store sales, and 3.9% square footage growth. The Company now anticipates net income per diluted share for full-year 2016 will range between $3.67 and $3.76. This compares to its previous EPS guidance range of $3.67 to $3.82, which did not include the $0.09 per diluted share of expenses related to our debt refinancing incurred in the third quarter of 2016.

Sasser added, “I am encouraged by our continued progress in building the foundation for a larger, stronger and more profitable Family Dollar business. The stores are cleaner, the values are greater and our customer feedback scores regarding merchandise assortments and in-stocks have improved. As a combined organization, we are uniquely positioned to efficiently grow our businesses to better serve more customers in more markets. We are well-positioned and prepared for the upcoming fourth quarter and holiday selling season.”

Conference Call Information

On Tuesday, November 22, 2016, the Company will host a conference call to discuss its earnings results at 9:00 a.m. Eastern Time. The telephone number for the call is 888-215-7015. A recorded version of the call will be available until midnight Monday, November 28, 2016 and may be accessed by dialing 888-203-1112. The access code is 8794832. A webcast of the call is accessible through Dollar Tree’s website, and will remain online through Monday, November 28, 2016.

Dollar Tree, a Fortune 200 Company, operated 14,284 stores across 48 states and five Canadian provinces as of October 29, 2016. Stores operate under the brands of Dollar Tree, Family Dollar, and Dollar Tree Canada. To learn more about the Company, visit www.DollarTree.com.

A WARNING ABOUT FORWARD-LOOKING STATEMENTS: Our press release contains “forward-looking statements” as that term is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address future events, developments or results and typically use words such as believe, anticipate, expect, intend, plan, forecast, or estimate. For example, our forward-looking statements include statements regarding fourth quarter 2016 and full-year 2016 net sales and same-store sales, fourth quarter 2016 and full-year 2016 diluted earnings per share, square footage growth, the benefits, results, and effects of the merger with Family Dollar, including integration plans and synergies, and future financial and operating results and shareholder value. For a discussion of the risks, uncertainties and assumptions that could affect our future events, developments or results, you should carefully review the “Risk Factors,” “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in our Annual Report on Form 10-K filed March 28, 2016 and other filings with the Securities and Exchange Commission. We are not obligated to release publicly any revisions to any forward- looking statements contained in this press release to reflect events or circumstances occurring after the date of this report and you should not expect us to do so.

Contact:
Randy Guiler
757-321-5284
Vice President, Investor Relations
www.DollarTree.com

Source: Dollar Tree, Inc.

The Children’s Place, Inc. announces financial results for 3Q FY2016

  • Delivers Q3 Comparable Retail Sales Increase of 4.6%
  • Reports Q3 GAAP Earnings per Diluted Share of $2.36, a 26% Increase vs Q3 2015 and
  • Q3 Adjusted Earnings per Diluted Share of $2.29, a 19% Increase vs Q3 2015
  • Increases Fiscal 2016 Adjusted EPS Guidance to $5.00 to $5.05 vs Previous Guidance of $4.60 to $4.70
  • Returns $123 Million to Shareholders Year to Date, a 37% Increase Compared to LY

SECAUCUS, N.J., 2016-Nov-19 — /EPR Retail News/ — The Children’s Place, Inc.(Nasdaq:PLCE), the largest pure-play children’s specialty apparel retailer in North America, today (Nov. 17, 2016) announced financial results for the thirteen weeks ended October 29, 2016.

Jane Elfers, President and Chief Executive Officer, said, “We delivered another outstanding quarter, with EPS significantly above the high end of our guidance range. Comparable retail sales increased 4.6%. Comps were positive in all three months and accelerated as the quarter progressed. Inventory decreased 0.6% and is in excellent shape as we enter the fourth quarter. Based on these results, we are raising our adjusted EPS guidance for the full year to $5.00 to $5.05 per share compared to our previous guidance of $4.60 to $4.70 per share.”

Ms. Elfers continued, “Our number one priority is the creation of shareholder value. Our results are indicative of the impressive progress we have made against each of our strategic growth initiatives – superior product, business transformation through technology, global growth through alternate channels of distribution and fleet optimization – all of which are supported by a best-in-class management team. We look forward to continued momentum in our business for the fourth quarter and beyond.”

Financial Results
The Company’s results are reported in this press release on a GAAP and as adjusted, non-GAAP basis. A reconciliation of non-GAAP to GAAP financial information is provided at the end of this press release.

Third Quarter 2016 Results
Net sales increased 3.9% to $473.8 million in the third quarter of 2016. Comparable retail sales increased 4.6% in the third quarter of 2016.

Net income was $44.2 million, or $2.36 per diluted share, in the third quarter of 2016, compared to net income of $38.5 million, or $1.88 per diluted share, the previous year.  Adjusted net income was $42.8 million, or $2.29 per diluted share, compared to adjusted net income of $39.6 million, or $1.93 per diluted share, in the third quarter last year. There was no impact on adjusted net income per diluted share in the quarter from currency exchange rate fluctuations.

Gross profit was $194.5 million in the third quarter, compared to $180.5 million in the third quarter of 2015. Adjusted gross profit was $194.4 million in the third quarter, compared to $180.6 million last year, and leveraged 140 basis points to 41.0% of sales primarily as a result of merchandise margin leverage and a higher AUR.

Selling, general and administrative expenses were $115.4 million compared to $105.8 million in the third quarter of 2015. Adjusted SG&A was $115.4 million compared to $105.0 million in the third quarter last year and deleveraged 140 basis points as a percentage of sales primarily as a result of increased incentive compensation expenses which were partially offset by decreased store and administrative expenses.

Operating income was $62.1 million, compared to $57.6 million in the third quarter of 2015. Adjusted operating income in the third quarter of 2016 was $62.4 million compared to an adjusted operating income of $59.5 million in the third quarter last year, and leveraged 10 basis points compared to last year.

For the third quarter, the Company’s adjusted results exclude net income of approximately $1.4 million, compared to excluded charges of approximately $1.1 million in the third quarter of 2015, comprising certain items which the Company believes are not reflective of the performance of its core business. These excluded items are primarily related to income due to the release of reserves for prior year uncertain tax positions offset by asset impairment charges in the third quarter of 2016, and asset impairment charges and restructuring costs in the third quarter of 2015.

Fiscal Year to Date
Net sales increased 3.0% to $1,265 million, including the negative impact of approximately $3.7 million from currency exchange rate fluctuations.  On a constant currency basis, net sales were $1,268 million, a 3.3% increase compared to net sales of $1,227 million in the prior year. Comparable retail sales increased 4.1% in the first nine months of fiscal 2016.

Net income was $68.1 million, or $3.56 per diluted share, in the first nine months of fiscal 2016, compared to net income of $40.4 million, or $1.94 per diluted share, the previous year. Adjusted net income was $68.4 million, or $3.57 per diluted share, inclusive of a negative ($0.03) impact due to foreign exchange, compared to $50.5 million, or $2.42 per diluted share, an increase of 48%, compared to the previous year. On a constant currency basis, adjusted net income per diluted share was $3.60, a 49% increase compared to the previous year.

Gross profit was $483.7 million in the first nine months of fiscal 2016, compared to $447.6 million last year.  Adjusted gross profit was $483.6 million, or 38.2% of net sales, leveraging 170 basis points compared to last year.

Selling, general and administrative expenses in the first nine months of fiscal 2016 were $332.6 million, compared to $338.7 million last year. Adjusted SG&A was $332.9 million, compared to $324.9 million last year, leveraging 20 basis points compared to last year.

Operating income was $98.8 million, compared to operating income of $60.7 million in the first nine months of fiscal 2015. Adjusted operating income was $101.7 million, or 8.0% of net sales, compared to $77.4 million, or 6.3% of net sales last year.

For the first nine months, the Company’s adjusted results exclude net charges of approximately $0.2 million, compared to excluded charges of approximately $10.1 million in the first nine months of 2015, comprising certain items which the Company believes are not reflective of the performance of its core business. These excluded charges are primarily related to asset impairment charges offset by income related to the release of reserves for prior year uncertain tax positions in the first nine months of 2016, and proxy and legal settlement costs, asset impairment charges and restructuring costs in the first nine months of 2015.

Store Openings and Closures
The Company closed 5 stores and opened 2 stores during the third quarter of 2016. The Company ended the third quarter with 1,061 stores and square footage of 4.961 million, a decrease of 2.0% compared to the prior year. The Company’s international franchise partners opened 16 points of distribution in the third quarter, and the Company ended the quarter with 139 international points of distribution open and operated by its 6 franchise partners in 17 countries.

Capital Return Program
During the third quarter of 2016, the Company returned approximately $37 million to shareholders through the repurchase of 416,865 shares and its quarterly dividend payment of $0.20 per share. Year to date, the Company returned approximately $123 million to shareholders compared to approximately $90 million last year. Since 2009, the Company has returned over $747 million to its investors through share repurchases and dividends. At the end of the third quarter, approximately $159 million remained available for future share repurchases under the Company’s existing share repurchase program.

Additionally, the Company’s Board of Directors authorized a quarterly dividend of $0.20 per share, payable on January 5, 2017 to shareholders of record at the close of business on December 17, 2016.

Outlook
The Company is updating its outlook for fiscal 2016 and now expects adjusted net income per diluted share to be in the range of $5.00 to $5.05, inclusive of a ($0.03) negative impact from foreign exchange. This compares to the Company’s previous guidance for adjusted net income per diluted share of $4.60 to $4.70 and to adjusted net income per diluted share of $3.60 in fiscal 2015. This guidance assumes a positive low single digit increase in comparable retail sales for the year. This guidance for adjusted net income per diluted share excludes year to date net charges of approximately $0.2 million primarily related to asset impairment charges and income related to the release of reserves for prior year uncertain tax positions that the Company believes are not reflective of the performance of its core business.

The Company expects adjusted net income per diluted share in the fourth quarter of 2016 to be between $1.43 and $1.48. The Company expects no impact on adjusted net income per diluted share in the quarter from currency exchange rate fluctuations. This compares to adjusted net income per diluted share of $1.19 in the fourth quarter of 2015. This guidance assumes a positive low single digit increase in comparable retail sales for the quarter.

Financial Results
The Company’s results are reported in this press release on a GAAP and as adjusted, non-GAAP basis. Adjusted net income, adjusted net income per diluted share, adjusted gross profit, adjusted SG&A, and adjusted operating income are non-GAAP measures, and are not intended to replace GAAP financial information and may be different from non-GAAP measures reported by other companies. The Company believes the items excluded as non-GAAP adjustments are not reflective of the performance of its core business and that providing this supplemental disclosure to investors will facilitate comparisons of the past and present performance of its core business.  The Company uses non-GAAP measures to evaluate and measure operating performance, including, as previously disclosed, to measure performance for purposes of the Company’s annual bonus and long-term incentive compensation plans. A reconciliation of non-GAAP to GAAP financial information is provided at the end of this press release.

Conference Call Information
The Children’s Place will host a conference call to discuss its third quarter 2016 results today at 8:00 a.m. Eastern Time. The call will be broadcast live at http://investor.childrensplace.com. An audio archive will be available on the Company’s website approximately one hour after the conclusion of the call.

About The Children’s Place, Inc.
The Children’s Place is the largest pure-play children’s specialty apparel retailer in North America.  The Company designs, contracts to manufacture, sells at retail and wholesale, and licenses to sell fashionable, high-quality merchandise at value prices, primarily under the proprietary “The Children’s Place,” “Place” and “Baby Place” brand names.  As of October 29, 2016, the Company operated 1,061 stores in the United States, Canada and Puerto Rico, an online store at www.childrensplace.com, and had 139 international points of distribution open and operated by its 6 franchise partners in 17 countries.

Forward Looking Statement

This press release contains, and the above referenced conference call may contain, forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements relating to the Company’s strategic initiatives and adjusted net income per diluted share.  Forward-looking statements typically are identified by use of terms such as “may,” “will,” “should,” “plan,” “project,” “expect,” “anticipate,” “estimate” and similar words, although some forward-looking statements are expressed differently.  These forward-looking statements are based upon the Company’s current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results and performance to differ materially. Some of these risks and uncertainties are described in the Company’s filings with the Securities and Exchange Commission, including in the “Risk Factors” section of its Annual Report on Form 10-K for the fiscal year ended January 30, 2016. Included among the risks and uncertainties that could cause actual results and performance to differ materially are the risk that the Company will be unsuccessful in gauging fashion trends and changing consumer preferences, the risks resulting from the highly competitive nature of the Company’s business and its dependence on consumer spending patterns, which may be affected by weakness in the economy that continues to affect the Company’s target customer, the risk that the Company’s strategic initiatives to increase sales and margin are delayed or do not result in anticipated improvements, the risk of delays, interruptions and disruptions in the Company’s global supply chain, including resulting from foreign sources of supply in less developed countries or more politically unstable countries, the risk that the cost of raw materials or energy prices will increase beyond current expectations or that the Company is unable to offset cost increases through value engineering or price increases, and the uncertainty of weather patterns. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. The Company undertakes no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Contact: 

Robert Vill
Group Vice President, Finance
(201) 453-6693

Source: Children’s Place, Inc./globenewswire