Dollar Tree 4Q Sales Miss Street, Shares Lower

Citing lower general expenses and improved margins, Dollar Tree (NASDAQ:DLTR) revealed stronger-than-expected fourth-quarter earnings on Wednesday, though its shares slipped 1.3% in morning trade on disappointing holiday sales.

Revenue for the three months ended Jan. 28 was $1.95 billion, up from $1.7 billion a year ago, missing the Street’s view of $1.9 billion. The gains were led by a 7.3% improvement in sales at comparable stores, or those open longer than a year.

The Chesapeake, Va.-based discount retailer reported net income of $187.9 million, or $1.61 a share, compared with a year-earlier $162.5 million, or $1.30 a share.

Excluding one-time items, the company earned $1.60, above average analyst estimates of $1.58 in a Thomson Reuters poll.

“I am pleased to report that our business momentum remains strong as Dollar Tree’s sales, operating margin, and earnings continued to expand in the fourth quarter,” Dollar Tree chief executive Bob Sasser said in a statement.

Looking ahead, Dollar Tree projects fiscal 2012 sales in the range of $7.25 to $7.42 a share with earnings between $4.65 and $4.90 a share. Wall Street is looking for sales of $7.31 billion on earnings of $4.80.

Next quarter, it sees earnings of 91 cents to 97 cents a share on sales of $1.65 billion to $1.69 billion. Analysts are expecting a first-quarter profit of 91 cents a share on revenue of $1.70 billion.