Dollar Tree Inc posted a bigger-than-expected increase in quarterly profit on Wednesday after shoppers spent more in its stores and the chain controlled costs, and its shares rose more than 5 percent to their highest level since October.
Dollar Tree, which sells items for $1 or less at its namesake chain and at a variety of prices at its smaller Deal$ stores, has had strong sales at new stores, which it continues to open.
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The average amount spent by shoppers per trip increased, and "record numbers" of customers came to the chain during the quarter, Chief Executive Officer Bob Sasser said in a statement.
Dollar Tree earned $228.6 million, or $1.01 per share, in the fourth quarter ended on Feb. 2, up from $187.9 million, or 80 cents per share, a year earlier.
Sales jumped 15.4 percent to $2.25 billion, including a boost of $125 million from an extra week in the quarter.
In November, Dollar Tree had forecast a profit of 97 cents to $1.02 per share on sales of $2.2 billion to $2.26 billion. Analysts on average expected it to earn 99 cents per share on $2.23 billion in sales, according to Thomson Reuters I/B/E/S.
Sales at stores open at least a year rose 2.4 percent after increasing 7.3 percent a year earlier. The company had forecast that such sales would be flat to up by a low single-digit percentage rate in the latest quarter.
Dollar Tree said it expected first-quarter earnings of 53 cents to 58 cents per share on sales of $1.84 billion to $1.89 billion, with same-store sales up by a low single-digit percentage rate.
Analysts anticipate a profit of 58 cents per share on $1.87 billion in revenue for the quarter.
For the full year, Dollar Tree forecast earnings of $2.54 to $2.74 per share, with sales of $7.79 billion to $7.97 billion and a low single-digit percentage increase in same-store sales.
Analysts expect a profit of $2.81 per share on $7.9 billion in revenue for the year.
Dollar Tree is planning for 7.3 percent growth in square footage this year.
Shares of Dollar Tree rose 5.3 percent to $43.25 in premarket trading.