Dollar Tree (DLTR) reported a better-than-expected 13% increase in first-quarter profit as demand for lower-priced items continued to soar, but shares fell nearly 4% as its forecast for the current quarter fell short of estimates.
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The seller of items for under a dollar reported net income of $116 million, or $1 a share, compared with a year-earlier $101 million, or 82 cents, just ahead of average analyst estimates of 98 cents, according to a Thomson Reuters poll.
Sales for the three months ended April 28 were up 11.5% to $1.72 billion from $1.55 billion a year ago, narrowly ahead of the Street’s view of $1.7 billion. Comparable sales, or sales in stores those open longer than a year, increased 5.6%.
"I am pleased with the first-quarter results as both sales and earnings exceeded the high end of our guidance," Dollar Tree CEO Bob Sasser said in a statement.
However, its forecast on the current quarter is just 87 cents to 93 cents a share, which is below average estimates of 95 cents. It sees second-quarter sales between $1.66 billion to $1.7 billion, based on low- to mid-single-digit positive comparable-store sales, compared with the Street's view of $1.7 billion.
Full-year earnings are expected to be in the range of $4.74 to $4.94 a share on sales of $7.33 billion to $7.46 billion. Analysts are expecting fiscal 2012 earnings of $4.94 on sales of $7.41 billion.