RICHMOND, Va. (AP) — Discount retailer Dollar Tree Inc. said Wednesday its net income increased nearly 22 percent in the fiscal fourth quarter as consumers spent more at its stores, which sell goods for $1 or less, and it benefited from an extra week of sales.
The results topped Wall Street expectations and shares rose more than 9 percent in morning trading.
Dollar stores offer a wide variety of products, from beach toys to vitamins. They have done well throughout the recession and its aftermath, attracting budget-conscious customers with low prices. They've also promoted themselves as easy to navigate and get to, because they're much smaller than big-box stores like Wal-Mart and Target, and often have more locations in cities.
"The consumer is under pressure — burdened and concerned is the way we sort of characterize the consumer right now," Dollar Tree CEO Bob Sasser said in a conference call with investors. "At Dollar Tree, we think of ourselves as part of the solution ... and a destination for a cash-strapped customer that's trying to balance their budget."
The Chesapeake, Va.-based company posted earnings of $228.6 million, or $1.01 per share, for the period ended Feb. 2, up from $187.9 million, or 80 cents per share, the year before.
Revenue increased more than 15 percent to $2.25 billion as customers bought more, on average, per visit and traffic grew. The company said it expanded its assortment of candy, stationery, health and beauty care, household products, which were among the fastest-growing categories in the quarter.