Dollar Tree reported financial results for its first quarter ended April 30, 2022.
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Consolidated net sales increased 6.5% to $6.90 billion from $6.48 billion in the prior year’s first quarter.
Enterprise same-store sales increased 4.4%. Comparable store sales for Dollar Tree increased 11.2%. Family Dollar same-store sales decreased 2.8%, as it cycled the significant stimulus dollars released in the prior year’s quarter. For portions of the quarter, approximately 400 Family Dollar stores were temporarily closed due to a product-related recall, which negatively impacted Family Dollar’s quarterly comparable store sales by an estimated 200 basis points.
Gross profit increased 19.2% to $2.34 billion from $1.96 billion in the prior year’s first quarter. Gross margin improved 360 basis points to 33.9%, compared to 30.3% in the prior year’s quarter. This improvement was driven by improved initial mark-on, favorable product mix in the Dollar Tree segment, and leverage on distribution and occupancy costs, partially offset by higher freight costs, unfavorable product mix in the Family Dollar segment, markdowns, and shrink.
Selling, general and administrative expenses were 23.3% of total revenue, compared to 22.3% of total revenue in the prior year's first quarter. The increase was primarily due to costs related to store payroll, the West Memphis distribution center matter, and the reconstitution of the Board of Directors.
Operating income for the quarter increased 40.7% to $731.5 million compared with $519.9 million in the same period last year and operating income margin improved 260 basis points to 10.6%.
Net income increased 43.2% to $536.4 million in the first quarter and diluted earnings per share for the quarter increased 48.1% to a first quarter company record $2.37, compared to $1.60 in the prior year’s quarter.
During the quarter, the Company opened 112 new stores, expanded or relocated 33 stores, and closed 30 stores. Additionally, the Company expanded its multi-price Plus offering into an additional 790 Dollar Tree stores and completed 118 Family Dollar store renovations. Retail selling square footage at quarter-end increased 3.1% from the prior year’s quarter to approximately 129.8 million square feet. ■