You are here
CHESAPEAKE, Va. --Dollar Tree Stores, Inc. reported a 12 percent decline in profit and only a slight increase in same-store sales for the third quarter.
As previously reported, the nation's leading operator of single-price-point dollar stores had third-quarter sales of $724 million, compared with $665.2 million in last year's fiscal third quarter, reflecting a comparable-store sales increase of 0.7 percent.
"Later than planned new-store openings put pressure on third-quarter sales and earnings," said president and c.e.o. Bob Sasser, adding, "These stores are now open, and we have achieved this year's plan of 20 percent square footage growth. While record-high fuel prices continue to burden the consumer, our merchandise assortment and value are better than ever, and our stores are ready for business as we enter the holiday shopping season."
Gross margin for the third quarter was 35.4 percent, compared with 36.6 percent in last year's third quarter. While markdown and shrink results met expectations, the chain said approximately $1 million of hurricane-related markdowns and difficult year-over-year comparisons accounted for most of the gross margin disparity.
In addition, gross margin was negatively affected by loss of leverage on occupancy costs. Selling, general, and administrative expenses as a percentage of sales were 28 percent, compared with 27.5 percent in the same quarter last year, with depreciation accounting for the majority of the increase.
During the third quarter of 2004, the company repurchased approximately 693,000 shares of its common stock for $17 million under a $200 million authorization granted by its board of directors in November 2002. Through Oct. 30, cumulative repurchases under this authorization total approximately $87 million for 3.075 million shares.
As it looks to the all-important fourth quarter to buoy its annual financials, the company estimates sales for the fourth quarter to be in the range of $990 to $1,010 million, based on square footage growth of approximately 20 percent and comparable-store sales growth of flat to slightly positive.
Dollar Tree operated 2,674 stores in 48 states as of Oct. 30, compared with 2,511 stores in 47 states a year ago. During the third fiscal quarter of 2004, it opened 65 stores, closed three stores, and expanded or relocated 38 stores. Its retail selling square footage totaled approximately 19.6 million on Oct. 30, an 18.4 percent increase compared with a year ago.