Just a few months after it announced hundreds of job cuts at the former Matthews headquarters of Family Dollar, new parent company Dollar Tree reported a third-quarter profit that more than doubled since last year thanks to lower merchandise and freight costs.
In a statement, Dollar Tree CEO Bob Sasser said the company has been making “meaningful progress” in its integration of Family Dollar, the local discount retailer it bought in 2015 for $9.1 billion, and said its latest better-than-expected results position it well for the the upcoming holiday shopping season.
Dollar Tree said net income for the quarter rose to $171.6 million, or 72 cents a share, in the three months that ended Oct. 29, up from $81.9 million, or 35 cents a share, a year ago. The prior year included some charges and markdowns related to the Family Dollar business, Dollar Tree said.
The company’s earnings topped the estimate of Zacks Investment Research analysts by 2 cents, sending Dollar Tree shares soaring more than 8 percent to $89.03 in pre-market trading.
Never miss a local story.
Net sales rose to $5 billion from $4.95 billion a year ago, Dollar Tree said.
The latest quarter is the first in which Dollar Tree could provide a true year-over-year comparison of its financial performance, Reuters notes, since it completed the Family Dollar deal in July 2015.
When it bought Family Dollar, Dollar Tree had said it planned to reduce the combined company’s annual expenses by $300 million over three years. The 370 job cuts announced at the Matthews corporate office in August were expected by many analysts who said layoffs are a way to reduce costs.
In a statement, Dollar Tree CEO Bob Sasser said he is encouraged by the company’s progress in building “the foundation for a larger, stronger and more profitable Family Dollar business.”
“The stores are cleaner, the values are greater and our customer feedback scores regarding merchandise assortments and in-stocks have improved,” Sasser said.
“As a combined organization, we are uniquely positioned to efficiently grow our businesses to better serve more customers in more markets. We are well-positioned and prepared for the upcoming fourth quarter and holiday selling season.”