RICHMOND, Va. (AP) — Dollar Tree Inc. said Thursday its second-quarter profit fell more than 2 percent on costs related to its planned acquisition of rival discounter Family Dollar even though shoppers spent more at its discount stores.
Dollar Tree reported earnings of $121.5 million, or 59 cents per share for the period ended Aug. 2, compared with $124.7 million, or 56 cents per share, in the year-ago quarter.
Excluding costs related to the buyout of Family Dollar Stores Inc., Dollar Tree said it earned 61 cents per share. Analysts surveyed by Zacks Investment Research expected earnings of 65 cents per share.
The Chesapeake, Virginia-based company, which operates more than 5,165 stores in the U.S. and Canada, saw revenue increase 9.5 percent to $2.03 billion, topping Wall Street expectations of $2.01 billion.
Its shares fell 88 cents to $54.12 in morning trading Thursday.
Sales at established stores rose 4.5 percent. That comparison is a key gauge of a retailer's health. It excludes the volatility associated with stores that recently opened or closed.
The top-performing categories during the quarter included pet supplies, hardware, household products, food, electronics and party goods, the company said.
Last month, Dollar Tree announced plans to buy Family Dollar for $8.5 billion, significantly broadening its reach as it looks to fend off Wal-Mart, which has been stepping up its courtship of lower-income customers.
The deal would make Dollar Tree the biggest player in the dollar store segment, with its more than 13,000 combined locations eclipsing current leader Dollar General, which has about 11,300.
But in an attempt to trump Dollar Tree, Dollar General Corp. this week offered approximately $8.95 billion for Family Dollar — an offer that was rebuffed Thursday, citing antitrust issues. In a statement, Family Dollar CEO Howard Levine said that its board and advisers reviewed Dollar General's offer and determined it wasn't likely to be completed on the terms proposed.
Continue reading this story on the...