Gas, Weather Hurt Dollar Tree

CHESAPEAKE, VA-Dollar Tree Stores Inc.’s same store sales decreased 3.7% for the first quarter of fiscal 2005 compared to the same period last year. Overall sales increased 5.5% to $749.1 million from $710.3 million compared to the first quarter 2004.

The retailer posted earnings per share of 26 cents, which met analyst expectations, but didn’t exceed them. Based on first quarter sales, Dollar Tree gave new second quarter guidance of 25 cents per share to 26 cents per share.

“The decline is clearly the result of disappointing sales,” says Dollar Tree president and CEO Bob Sasser. He blames the poor sales on bad weather, which impacted Easter holiday sales, and high gasoline prices.

Sasser says that Dollar Tree is focused on improving and increasing the average store ticket since its customers are making fewer trips because of high gas prices. Moreover, the retailer expects Memorial Day sales and its new promotion “100 Days of Summer” to be successful. In particular, Dollar Tree’s exclusive luau merchandise is a big hit with customers, he says.

During the first quarter, Dollar Tree opened 65 stores, closed 9 stores, and expanded or relocated 30 stores for a total of 2,791 stores in 48 states.