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Dollar Tree’s Sales Expectations in 2019

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Sales performance

Dollar Tree (DLTR) generated net sales of $6.21 billion in the fourth quarter of fiscal 2018, which ended on February 2. The company’s fourth-quarter sales fell 2.4% on a year-over-year basis. The sales beat analysts’ estimate of $6.19 billion. The company’s top line was impacted negatively by an extra week in the fourth quarter of fiscal 2017, which contributed sales of $406.6 million. The company’s fourth-quarter same-store sales rose 2.4% on a constant currency basis due to a 3.2% rise in the same-store sales for the Dollar Tree banner and a 1.4% rise in Family Dollar’s same-store sales.

For the Dollar Tree segment, the fourth quarter was the 44th consecutive quarter of same-store sales growth.

For fiscal 2018, Dollar Tree’s net sales grew 2.6% to $22.8 billion. The company’s fiscal 2018 same-store sales grew 1.7% due to a 3.3% rise in the Dollar Tree banner’s same-store sales and 0.1% growth in the Family Dollar banner’s same-store sales.

Dollar Tree has been investing in revamping its Family Dollar stores to improve its sales. In Part 1 of this series, discussed the company’s store optimization plans. The company has also been adding freezers and coolers to more stores to offer more consumables.

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Sales guidance

Dollar Tree expects its fiscal 2019 net sales to be $23.45 billion–$23.87 billion. Dollar Tree expects its fiscal 2019 same-store sales to grow by low single-digits.

Dollar General (DG), which is scheduled to announce its results on March 14, is expected to deliver 7.7% growth in its fourth-quarter sales. Analysts expect Dollar General’s sales to rise ~9.0% to $25.6 billion in fiscal 2018.

Next, we’ll discuss Dollar Tree’s margins.

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