Dollar Tree, Inc. Announces Unaudited Consolidated Earnings Results for the Second Quarter and Six Months Ended August 2, 2014; Revises Earnings Guidance for the Full Year 2014; Provides Earnings Guidance for the Third Quarter of 2014
Aug 21 14
Dollar Tree, Inc. announced unaudited consolidated earnings results for the second quarter and six months ended August 2, 2014. Consolidated net sales increased 9.5% to $2.03 billion from $1.85 billion in the prior year's second quarter. Consolidated comparable store sales increased 4.5% on a constant currency basis. Adjusted for the impact of Canadian currency fluctuations, the comparable store sales increase was 4.4%. Net income, compared to the prior year's second quarter, including acquisition-related costs, decreased approximately $3.2 million to $121.5 million, and diluted earnings per share increased by 5.4% to $0.59 against $124.7 million or $0.56 per diluted share a year ago. Excluding acquisition-related costs, net income increased approximately $1.4 million to $126.1 million and diluted earnings per share increased 8.9% to $0.61. Operating income was $205.0 million against $201.3 million a year ago. Adjusted operating income was $212.5 million. Income before income taxes was $196.6 million against $200.8 million a year ago. Adjusted income before income taxes was $204.1 million. Capital expenditures were $88.3 million in the second quarter of 2014 versus $96.4 million in the second quarter last year.
Consolidated net sales increased 8.4% to $4.03 billion from $3.72 billion in the first six months of 2013. Consolidated comparable store sales increased 3.2% on a constant currency basis. Adjusted for the impact of Canadian currency fluctuations, the comparable-store sales increase was 3.1%. Net income, compared to the prior year's first six months, including acquisition-related costs, increased $1.5 million to $259.7 million, and diluted earnings per share increased by 8.7% to $1.25 against $258.2 million or $1.15 per diluted share a year ago. Excluding acquisition-related costs, net income increased $6.1 million to $264.3 million and diluted earnings per share increased 11.3% to $1.28. Operating income was $436.9 million against $417.8 million a year ago. Adjusted operating income was $444.4 million. Income before income taxes was $420.3 million against $416.3 million a year ago. Adjusted income before income taxes was $427.8 million. Net cash provided by operating activities was $365.3 million against $300.3 million a year ago. Capital expenditures were $160.2 million against $199.6 million a year ago.
The company estimates sales for the third quarter of 2014 to range from $2.02 billion to $2.07 billion, based on low- to mid-single digit positive comparable store sales. Diluted earnings per share are estimated to range from $0.61 to $0.66, excluding acquisition-related costs. Gross profit margin will continue to be challenged by year-over-year freight increases as well as commitment to providing greater value to consumers in this challenging macro environment.
Full-year 2014 sales are now estimated to range from $8.44 billion to $8.55 billion. This estimate is based on a range of low- to low-mid-single digit positive comparable store sales. Diluted earnings per share, which includes $0.02 per share of second quarter acquisition-related costs, are expected to range from $2.94 to $3.06, excluding third and fourth quarter acquisition-related costs. For the full year 2014, the company is planning consolidated capital expenditures to be in the range of $360 million to $370 million. Depreciation expense to be in the range of $200 million to $210 million for the year.
Maxx Fitness Clubzz and Dollar Tree to Join Chaar Pet Supplies at Saucon Valley Square
Aug 3 14
The Maxx Fitness Clubzz and Dollar Tree announced that will fill the former Pathmark storefront. Both new businesses are expected to open in the fall. The company announced last week that it was opening a second location in the plaza. It's filling the former Blockbuster Video location.
Class-Action Lawsuit Filed Against Family Dollar Stores Inc. and Dollar Tree Inc
Aug 1 14
A class-action lawsuit has been filed against Family Dollar Stores Inc. and Dollar Tree Inc. tied to their acquisition plans. That filing in Delaware Chancery Court also names all members of Family Dollar's board of directors as defendants. It alleges that Family Dollar, Dollar Tree and the board have violated their fiduciary duties at the expense of Family Dollar's shareholders. The cash and stock agreement is valued at $74.50 per share - a nearly 23% premium over the stock's closing price on July 25, 2014. The acquisition is slated to close in early 2015. The lawsuit alleges the deal offers unfair and inadequate consideration that does not constitute a maximization of stockholder value. The filing states that analysts have projected that the inherent value of the Family Dollar is worth at least $79 per share. The lawsuit alleges that Family Dollar's board has breached fiduciary duties owed to shareholders to take all necessary steps to ensure shareholders receive maximum value. It notes the deal includes provisions that stand to benefit Dollar Tree. Examples given include a no-solicitation provision that prevents Family Dollar from soliciting other potential buyers or continuing discussions. Dollar Tree has five days to match any competing proposal and there is a $305 million termination fee tied to ending the deal. It cites potential conflicts of interest with Levine being Family Dollar's large stockholder and a member of the Family Dollar's board. He is slated to receive about $130 million from the sale of his stock. The lawsuit was filed by Peter Andrews, with Andrews & Springer LLC in Delaware.