RICHMOND, Va. — The discounter Dollar Tree Inc. said Thursday that its profit increased 15 percent in the first quarter as consumers spent more at the retailer's outlets that sell goods for $1 or less, but shares slid on its outlook.
Dollar stores, which benefited from shoppers trying to stretch their dollars in the recession, have expanded rapidly and have seen sales continue to grow. They're also taking business away from retail giants like Wal-Mart Stores and Target.
The Chesapeake, Va.-based company said it earned $116.1 million, or $1 per share, for the period ended April 28, up from $101 million, or 82 cents per share, a year ago, topping Wall Street expectations of 97 cents per share.
Net sales increased 11.5 percent to $1.72 billion from $1.55 billion a year ago. Analysts polled by FactSet expected revenue of $1.69 billion.
Sales at stores open at least one year increased 5.6 percent. That comparison is a key gauge of a retailer's health because it excludes stores that recently opened or closed.
The company operates more than 4,450 stores in the U.S. and Canada. It opened 110 stores, closed 10, and expanded or relocated 44 during the fourth quarter.
Top-selling items during the quarter included products for the home, food, snacks and beverage, health care products, party supplies and seasonal products.
"With customers concerned over rising and uncertain fuel prices and high unemployment, many are finding Dollar Tree to be a destination for high value consumer products as they look for ways to balance their budgets, "CEO Bob Sasser said in a conference call with investors.
But the company said it expects to earn 87 to 93 cents in the second quarter, short of the 95 cents expected by analysts.
Dollar Tree also said it expects 2012 net income between $4.74 and $4.94 per share, on revenue between $7.33 billion and $7.46 billion on low- to mid-single-digit sales growth at stores open at least a year.
Its shares fell $4.10, or 4 percent, to $97.20 in afternoon trading Thursday.
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Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum.