Monday, February 21, 2011

Dollar Tree Inc. (NASDAQ: DLTR): Q4 Earnings Preview 2010

Dollar Tree Inc. (NASDAQ: DLTR) is scheduled to release its fourth-quarter earnings before the opening bell on Wednesday, February 23, 2011. Analysts, on average, expect the company to report earnings of $1.27 per share on revenue of $1.75 billion. In the year ago quarter, the company reported earnings of $1.01 per share on revenue of $1.56 billion.

Dollar Tree, Inc. operates discount variety stores in the United States. At January 30, 2010, the Company operated 3,806 discount variety retail stores.

In the preceding third quarter, the Chesapeake, Virginia-based company's net income was $93.2 million or $0.73 per share, compared with a profit of $68.2 million or $0.51 per share in the same quarter last year. Revenue jumped 14.2% to $1.43 billion from $1.25 billion in the year-ago quarter. Analysts, on average, expected the company to report earnings of $0.62 per share on revenue of $$1.38 billion.

At its last earnings call in November, the company said that it expects fourth quarter sales in the range of $1.72 billion to $1.76 billion, based on low to mid single digit positive comparable store sales. Earnings per share are estimated to be $1.20 to $1.27 for the quarter. 

The company also lifted its earnings per share outlook for fiscal 2010 to a range of $3.01 to $3.08 from its prior forecast range of $2.84 to $2.96. Full-year adjusted earnings per share are now estimated to be $3.14 to $3.21, up from its prior estimate of $2.97 to $3.09.

Discount variety stores like Dollar Tree have been enjoying a strong holiday season this year. With the economy recovering and customers having refrained from making some purchases over the last few years, stores have experienced an increase in sales. Companies in the discount variety store niche have been strong throughout the recession, and the holidays are proving to be no different. As price conscious shoppers look for bargains, discount variety stores have experienced increased sales. Although the economy is recovering, many people have become more price-aware. Many have said that even with a blossoming economy; they would stick to their newly acquired frugal ways. Some in the industry are using their profits for share repurchase, while others are expanding by opening new locations.

Dollar Tree is also poised to benefit from technology investments, innovative marketing and merchandising initiatives, strong inventory management and a healthy financial position.

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