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RICHMOND — Discount retailer Dollar Tree Inc. said Thursday that strong sales of food, housewares, health and beauty products helped its profit grow about 37 percent in its fiscal third quarter.
Dollar Tree said sales were strong as it saw an increase in customer traffic and the average customer bought more items. Other leading sales categories included domestic and home products, as well as party supplies.
"Our stores offer a balanced mix of everyday basics, things our customers need, along side an assortment of fun and exciting discretionary items, things they want," CEO Bob Sasser said in a conference call with investors.
"Customers continue to shop in record numbers and they're buying more each time they visit our stores."
Its shares rose $1.44, or 2.6 percent, to $56.15 in morning trading Thursday after rising to a 52-week high of $57.99 earlier in the session.
The Chesapeake, Va.-based company reported net income of $93.2 million, or 73 cents per share, in the three months ended Oct. 30 compared with $68.2 million, or 51 cents per share, a year ago.
Its revenue grew 14 percent to $1.43 billion from $1.25 billion. Revenue at stores open at least one year — a key indicator of a retailer's health because it measures results at existing stores while excluding the effects of new stores and closings — grew nearly 9 percent.
The results beat Wall Street expectations for earnings of 62 cents per share on revenue of $1.38 billion.
Dollar Tree also raised its annual earnings forecast, saying it now expects an adjusted profit of $3.14 to $3.21 per share on $5.88 billion to $5.92 billion in revenue. Analysts polled by Thomson Reuters expect, on average, net income of $3.08 per share on $5.83 billion in revenue.
The company also said it expects to earn $1.20 to $1.27 per share in the fourth quarter on $1.72 billion to $1.76 billion in revenue. Analysts are forecasting $1.24 per share and $1.72 billion in sales.
In the third quarter, Dollar Tree said it opened 86 stores, expanded or relocated 27, and closed two. The company ran 4,009 stores in 48 states at the end of the quarter.
The company on Wednesday announced it had completed the purchase of Canada's Dollar Giant stores for about $52 million in cash. The deal includes 86 Dollar Giant Stores, including substantially all assets, inventory, leasehold rights and intellectual property. It is Dollar Tree's first expansion outside the U.S.
