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Dollar Tree, Inc. (NASDAQ: DLTR ) and Dollar General Corporation (NYSE: DG ) both reported fourth quarter 2022 results this month. Today’s inflationary environment benefits discount stores as customers look for more value in their purchases. Here’s a look at how the two fared in the most recent quarter:
Revenue and Comps
Dollar Tree’s consolidated net sales rose 9% year-over-year to $7.72 billion in Q4 2022 while same-store sales rose 7.4%. Dollar General posted net sales of $10.2 billion in Q4, up 18% from last year, driven by positive sales contributions from new stores and growth in same-store sales. DG sales growth was partially offset by store closures. Same-store sales rose 5.7% in Q4, driven by an increase in the average number of transactions, but partially offset by a decrease in customer traffic.
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Dollar Tree reported net income of $452.2 million, or $2.04 per share, in Q4 2022 compared to $454.2 million, or $2.01 per share, in the same period last year. Dollar General’s net income increased 10.3% to $659.1 million while EPS increased 15.2% to $2.96 in Q4 compared to last year.
Category performance
In Q4, Dollar Tree reported 8% growth in net sales for its namesake banner along with 10% sales growth in its Family Dollar segment. Same-store sales for the Dollar Tree segment increased 8.7%, driven by a 10% average ticket increase, partially offset by a 1% decrease in traffic. Same-store sales for Family Dollar grew nearly 6%, helped by increases in average tickets and traffic.
Outlook
Dollar Tree expects consolidated net sales for the first quarter of 2023 to be $7.2-7.4 billion. Same-store sales are expected to increase in the mid-single digits, with low single-digit comp growth in the Tree Dollar banner and mid-single comp growth in the Family Dollar banner. EPS is expected to be $1.46-1.56 in Q1.
For FY2023, Dollar Tree’s consolidated net sales are expected to be between $29.9-30.5 billion. Comparable store sales are expected to increase in the single to mid-digits, with a low single-digit increase in the Dollar Tree segment and a mid-single-digit increase in the Family Dollar segment. EPS is expected to be between $6.30-6.80 in FY2023.
Dollar General expects net sales growth of 5.5-6% and same-store sales growth of 3-3.5% in FY2023. EPS is expected to grow by around 4-6% in a year.
Dollar Tree shares rose 2% on Friday while Dollar General shares rose less than 1%.
Click here to read the full transcript of Dollar Tree’s Q4 2022 earnings conference call
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