DLTR - Earnings call transcript Q1 2018

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Operator

Good day, and welcome to the Dollar Tree Inc.

First Quarter Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Randy Guiler, Vice President, Investor Relations. sir. ahead, go Please

Randy Guiler

President Good Dollar welcome first Tree's on be XXXX. Jonathan. our Philbin; call Kevin CFO, fiscal our to Participating Wampler. our will call discuss performance today's CEO, morning, you, Gary to and and conference quarter and Thank for the

those Harbor various forward-looking of expectations, begin, prospects XXXX. plans result Actual I that for to file with under results statements will Report, purposes we indicated These provisions most the may by remind important recent SEC. like various the release, forward-looking we that Securities differ are a Safe Annual make Act constitute materially for Private and the X-K, as press the Before are of in and everyone our from company recent Litigation which statements, would remarks the on factors. included about these of most future Reform XX-Q,

to expect Please we follow-up and the obligation questions prepared necessary. statements, remarks for update will forward-looking do no and one to end your our if the questions. your to have At call us We of our not limit open should one you so.

the Officer. Tree's Philbin, to over and Chief President Executive turn Gary I'll Now call Dollar

Gary Philbin

Thanks, morning, quarter results billion. your for X% good of increased everyone. our fiscal patience. Randy, and we Thanks $X.XX for to first morning This announced our XXXX. Sales

and Family By X.X%. the increased Tree sales X%, for increased comp decreased sales segment, same-store consolidated Our banner, for comp X.X%. Dollar banner Dollar sales the

with refinancing the million adjusted XX.X% $XXX.X XX.X%. share income margin earnings enterprise to $XX.X increased declined to recent receivable XX.X% rate to and associated And costs per gross million. Operating year's impairment, increased XX points basis $X.XX. prior excluding Our our

line guidance an started needed for debt worked hard We in sales refinancing. the Easter. our results quarter the line both top early teams that we to year the range overcome when Our for were within and adjusted deliver to bottom banners knowing

for X% the Dollar a cost our quarter freight banners spring. X.X%. we estimates of with had Family efforts significant the and segments, to and teams' Our these comp, By comps of business comps, the hurdles had comps, quarter, disruption teams Dollar for pressure a our and the these now proud greater side in of Family of sixth of initial fourth positive quarter quarter now positive cooler-than-expected above faced our consumables the hurdles. of Dollar and consecutive consecutive some from at wetter while negative, our positive comps I'm especially issues, overcome consumable Tree, Faced business, business. than

exceeded Our Direct income and and business Dollar banner health Dollar sales Dollar its and leverage, Tree driven care, eyewear, margins online and by candy, Tree top quarter, the first categories performing Canada for and team In household our comp increases and our were in consumables. operating Tree both double-digit plan and side snacks business. delivered beauty expense our for improved personal beverage,

Dollar years. with April in compared was comp to early storms, and banner's seemed than disruption Xst greater with our really Southwest and an delivered comp Our pleased zones the sales of later Tree Dollar affected year. comps discretionary quarter. April March store this than growth sales in results arrival winter quarter that Southeast, all We're the outperforming comps a as and last strong March of was a spring's weather's for Easter, strongest in both X%. in and the had that Tree most or positive Geographically, a and sales February the were at was the with down Easter, earlier April was very sales same-store the balanced year, performance April consumables. positive, by line same-store year-over-year expected; XXth slightly were

our was store result merchants. comp remarkable X% of all from and a Our teams our

mark the across we consumable incredible hit make moved our on both We the needle categories. up Easter, discretionary Our early and merchant and them assortment. values for again to and an asked teams

we past Zone for assortment designed with merchant Zone. year, which initiative the The price immediate Snack the of the Over Dollar sales. drive Tree customers call is products and incremental tested to team provide developed Snack at dollar a stores, point select to has compelling consumption an

they Our our across salty excited cake, that crave. excited great cold additional these customers incremental sales about with treats the in Snack and values back stores favorites foot of candy, traffic we're installed. customers are to the other the they bring snack Zone, of introduction treats, those categories beverages, that that generate We're

stores, Snack Zone added we into initiative stores Tree Tree Dollar plans During to to Dollar XXXX. have in XXX the and QX, XXX launch this fiscal

Family we intended though the the our and our we comps Dollar continue not make marketing, target first progress program. for store quarter, did the around achieve banner to For renovation assortment, quarter, on in

was off to comps nearly two and and the colder-than-normal-spring start on due apparel that all departments got pressure early slow a Our in garden, our Easter. and to with misses lawn

office the to However, show food, performing and the and business. categories in school highlights underlying snacks frozen beverage. Top supply, and refrigerated strength includes continue following

pleased Our Family these our weekly. as across need count and items driven speaks categories to our comp was most, performance it again to Dollar customers the and on that by with consumables. I'm relevance progress deliver

shift. impact comp softest with holiday the the Northeast our for sales the in of sales Easter strongest Dollar quarter, Family in zones. were and and cadence West April, in March, as same-store strongest Geographically, timing quarter the sales expected, was Our through

seen received. beauty during in We for reset And has highlight the primary and completed. strong the It's our an to also worked comps very loyal customer category and important stores we've quarter care. been well

April positive the has cooler in despite category shift and temperatures. and assortment expanded turned March Easter dramatically this Our

of better several with in inventory inventory family motion. represent measured resets key to additional of dollar were along levels of increased our investment that Our stocks drive the timing in departments end

expect current levels. the from decline to over this We year

Family items, Web you visit store, see a program It's customer-facing all a or our to on messaging. you Dollar at which across across our EDLP Family value Coupon brands. $X an Save. marketing our great calls refresh stores, view that And Save, pricing our promotional for Save surprise on private consistent everyday supports Smart us meaningful a Our Dollar to values to our will point value, Ways items and in Smart Ways our price drops our our on site and circular Smart price whether opening message value program Compare value is value Wow check messaging. reflect with drives

chain-wide sign During customers Smart and up XXX,XXX bringing Smart six we our the app, enrollment Coupons, makes receiving quarter, downloaded since launched million new XXXX. Coupons; had The million to app Android it the for strong now easier more customers we mobile have operating to Family Dollar customers was total on for the in Apple program both now are reviews over systems. use X.X and than

quality gain provide been continue brands comparable We national Save on our brand to the developed Compare Ways to meaningful been across of support new brands private Smart have that traction component and the program. to we've savings chain. These the and to introducing Save

QX. Our be are apparel being provide can quality customers completed and brands the XXX% with count home which the and should on completed in with made even satisfaction new underway consumables they values. customers our category of changes but in These rollout the an brands well our know the customer of end categories, alternative, by guarantee. We've greater

and while margins. drive enhancing to traffic Our loyalty goal is profit

to XXX Dollar quarter, Family we renovations, XXX. store our completed first bringing another the During total

end adult near stores, with and more with care customers to very be shopper-friendly stores and faster the beverage we renovated coolers productive in select in to in especially caps, receiving checkout, a $X continue items, customers assortment power a snacks, results The including Family shopping we meaningful process Better expanded newly We about the adjacencies teams. alley these feedback expanded and initial and immediate our provide consumption for from renovated Dollar of seeing [quarters] our experience. store checkout pleased are beverage added shopping emphasize Wow the stores, are assortment, and food and updated hair a customer. freezers, [ph] better

to SG&A April that included near the was for the increases positive quarter. law our categories the leverage. needs Our and the Highlight month include better earlier our softest store Both the for floral, quarter fill-in comp of neighborhood Top due both garden, margins for live, Dollar and slightly quarter. by the We choice was work, shop mid-to-single to saw be of working discretionary quarter and Tree kitchen ticket hard teams plan performing Canada the consumables delivered in operating the Dollar and of digit Easter. store textiles. stores. income and than overall typically the traffic. customers driven team shopping the at and of the comps X% Family are for And ahead

brand encouraging in Direct Tree sales mobile Tree then be to on driving provides enhancing Our both driving in-store Canada. Dollar double-digit which for opportunities awareness, another leadership to QX the desktop focus Tree incremental Dollar people, in and customer and and site increases extending visits. for and site increased our quarter for and with continue on building solid Web productive the operational conversion our base, our profitable both Direct Dollar rates traffic, fundamental our during selling Web sales, results retention capability quarter. represent for banner, is

they database million million and earn expanded Our our views in. of QX, prize have associated frozen subscriber Easter, foods. quarter videos assortment new than e-mail highlighted In seasonal videos X.X during our more online opted the X.X highlighting by with customers our exceeded

are excited the and to value of first since offer to be e-mail great every are Our brand subscribers week. selections loyal, know we

with was Our both traffic and and driving spring, both Check familydollar.com. at focused online summer heavily and the Easter, sales. dollartree.com on early out in-store of Web site QX marketing goal

Family Trees XXX the a we XX Family estate relocate stores XX XX new opened Family Trees, for quarter, Looking part two the Dollar of quarter. expanded of renovation real during Dollar stores, XXX and stores, as we and or XX initiative at a of Dollar total projects XXX first for renovated we Dollars, the Dollars, total

Dollar stores. We of coolers into quarter, X,XXX in total and freezers course stores added our first Dollar the during XXX stores to Tree our freezers with Tree bringing also

closed with Dollar ended outlook being X,XXX our Family call first performance five QX Dollar I Dollars, and and to now XXXX. three over them During and Kevin? we Trees, XX,XXX X,XXX stores; for more will Kevin turn on quarter quarter Trees two to and stores, Dollars. our of Family the detail the quarter, provide fiscal we the

Kevin Wampler

$X.XX the increased for increased gross to quarter $X.XX Tree Dollar first of and $X.XX prior segment increased X% profit total year's $X.XX Total segment Dollar sales sales X.X% sales billion Family X.X%. banner sales to Dollar adjusted Thanks, basis, billion Gary, $X.XX X% X.X% within or Dollar billion. billion, good same-store the for and segment and first the billion. increased to same-store to range for for X.X%. total $X.X Family X% fluctuations, X.X% to guidance our Canadian Tree grew to On morning. Overall of when quarter. the the currency sales decreased a increased XXXX, banner quarter compared billion Enterprise

primarily XX the due increased XX.X% to Dollar cost, due XX point to the quarter, increased points declined year a the XX basis to comparable basis the As the from payroll basis mark-on costs shrink decreased distribution loss basis costs percent costs, points, was XX These these points were costs including leverage margin which in Family in by store XX by gross and during which comparable basis partially the basis resulting in decreased distribution quarter. sales, costs. year's points increased sales, freight points Gross costs. to in year. points, percentage Consolidated costs, margin higher decline Distribution for period. same the last points margin by shrink Factors quarter. of and during prior basis prior compared compared offset costs, occupancy XX decreased year's freight leverage higher partially And markdowns, promotional increased higher partially basis sales in XX which decrease for points, which first partially points are basis increased and sales XX due offset expenses of distribution freight quarter, including from initial segment increase primarily a merchandise sales points the the quarter freight profit from included center XX.X% basis quarter XX.X% the the XX.X% administrative by points XX was basis fewer increased margin Tree net merchandise margin XX.X% occupancy markdowns selling, variety The XX.X% first general, point with increased XX higher costs, XX store due resulting to segment quarter was comparable offset center improved versus offset as with Gross Dollar the higher items. quarter. gross for profit cost, from of profit XX XX XX.X% to resulting in performance from the from a first costs. decline of the increased from prior payroll basis impacting segments which basis

$X.X from XX.X% basis XX in as increased by depreciation. impairment was store the The Excluding offset points year's SG&A percentage year's the receivable higher lower quarter, to payroll an million prior sales prior adjusted the of a partially by quarter. driven cost from increase

basis quarter for in segment prior utility payroll a expense Act offset percentage savings depreciation First was segment as as XX.X%, consistent the to the sales prior SG&A cost. Tax XX.X%. was to at XX.X% reinvestment lower related Jobs by plan. This quarter. sales cost Store in Tree year's Family expense increase our of SG&A and points Dollar for Dollar with of a increased the the hourly XX percentage was Cut year compared

receivable by SG&A basis last with slightly first compared margin a Operating as Excluding same year's to the million percentage million, improved sales Family the increase $XXX.X quarter. XX year, for points. was points the in expense basis expense. X.X% $XX.X prior of last year. Dollar basis XX the for period payroll to increased The in result points Operating income XX million depreciation the increase of impairment that X.X% lower from to offset was store a quarter $XXX.X enterprise hourly income increased from in

points for $XX for to Operating Excluding Dollar $XXX.X compared increased declined adjusted Dollar the to quarter. income segment quarter operating basis year to Family And prior segment income receivable to when year, XX the impairment margin prior margin XX.X% operating was Tree previously-mentioned the X.X%. million. the million

X.X%. with of points cost refinancing year totaled for the the debt. expenses to million, the basis recent was which receivable of and Excluding expense associated prior primarily quarter income interest impairment, net XX operating decreased comprised the Non-operating company's $XXX.X

result for XX% in compared Cut lower rate prior Act, Tax The which tax quarter and federal Jobs XX.X% is to was of effective rate from the in rate the XX.X%, a Our period. year XX% to prior the lowered the the year.

the $X.XX per receivable debt year's in share, For or or income $X.XX quarter. million of quarter, prior refinancing, reported year's and per compared year QX included of cost year's to earnings the with income had net $X.XX share company net This diluted billion prior charge. QX the $XXX.X the first $XXX.X last our of $X.XX associated diluted included impairment

of adjusted items, release cash these XXXX. at to to $X.XX share $XXX.X the at grew on of year's $X.XX Excluding totaled the XX.X% adjustments. a the equivalents details EPS per and financial $X.X prior from Today's compared in an adjusted quarter. non-GAAP for press million, cash fiscal Combined, includes a billion end reconciliation quarter-end measures

a approximately debt was $XXX as outstanding X, decrease Our $X billion, XXXX, from million of a of year ago. May

term $X.XX company the the loan million and quarter, During consisting billion of new facility. credit into $XXX a entered a a agreement revolver

quarter. grade expensed QX share. to Connection notes. financial to share. tranches proceed the interest to $XXX.X the segment by approximately fiscal $XX QX the on The sales our fees, support several the reduced selling well refinancing, forward. resets. Dollar from save as quarter-end million one-time increased same in paid notes. at $XXX.X in segment at non-cash billion and for last openings from same company period basis. second Additionally its GAAP current of net diluted basis. investment year of Inventory per store Inventory while foot down current for foot savings selling of annual and sales our notes. for last XX% appropriate last square total interest non-GAAP The increased deferred continued company selling levels and going X.X% will Inventory interest on approximately offering the the the quarter-end with At and of to quarter-end inventory a Dollar EPS unamortized company versus several to are of to equate The in support year and the X.X%. for square The the acquisition to X.X%. Tree XX.X% million earnings the believe the year, first quarter Capital company reconciliation new increased the inventory XXXX to April million expense year, a the repay prior represent was category $X $X.XX square earnings These time for XX, registered X% the increase levels foot square as the increased new inventory million were completed of costs scheduled on $X.X initiatives in XX.X expenditures increased $XXX.X in the in the on million cost, X.X% repayment QX Family release notes for million measures work detailed acquisition footage the per first selling in for a as levels We incurred last stock in quarter expects financing of used year. prepayment $X.XX the

to fiscal capital are range the $XXX.X quarter planning expenditures from to for with and year. million $XXX outlook. first last XXXX, $XXX $XXX.X million consistent XXXX totaled for amortization consolidated quarter and initial first in our million Depreciation million For the we

million. $XXX we consolidated XXXX, fiscal to to $XXX and amortization range from expect For depreciation million

of per in for approximately $X.XX updated the considerations XXXX. XXXX QX the $XXX.X following year XXXX QX XXXX includes include of the from added a Calendar Our Halloween shifts is following: million the XXrd-week to assumptions. XX-week sales, for share. outlook year, in fiscal earnings QX and into

on continued state's increasing minimum We payroll based pressure wages. expect on store

benefit. part million hourly we rates investment business hours $XXX discussed, average from our into as our our million as store Additionally, continue wage $XXX previously on projected tax and to of invest

to costs our in updated original diesel than and outlook. we These our continue. trending and guidance, higher that freight higher expect are reflected We costs

we $XX through approximately continue be Net to increases interest for forward. will work expense We million as these to QX. will go mitigate QX

Our in not predict We've rates. any guidance fluctuations. adjusted cannot changes not share include our repurchases. for currency does We future currency guidance

tax for shares a million assumes XXX.X assumed and XXXX. be And million for for weighted rate average to share diluted quarter shares the XX.X% of second are guidance full-year. XXX.X Our and counts fiscal QX for the XX.X%

quarter, sales sales share footage of earnings $X.XX are to same-store single-digit X.X%. range $X.XX. based billion $X.XX in estimates For on These diluted the range the to billion, from per total to square second year-over-year we low of and are forecasting a increase and growth $X.XX

share full quarter refinancing, to first quarter are reduction associated sales company one-time low sales based same-store interest share income refinancing, and $X.XX, XXX. we per $X.XX benefit anticipates for the tax and $XX.XX of expected with and footage for company's XXXX, range second range to the the single-digit square expense. expected cost Gary. and $X.XX shrink share diluted includes will fiscal $X.XX freight per on $XX.XX the I $X.XX increase corporate turn growth. X.X% and in $X.XX to compared will range total forecasting between savings of related The from fiscal company's guidance back updated billion For expected call now to of debt an for the XXXX billion benefit a of net of XXX factors: expense range previously-expected related following continued rate the now between from now The per pressure annual cost share to share per to

Gary Philbin

Kevin. you, Thank

We banners. continue our grow meaningful both on for improve and to progress focus and business make to

The managing The of of continued customers us combination retail these well-positioned sector XX,XXX provides opportunity great in the of stores and our to long-term most types nearly brands all provides shareholders. combination two are Trees future. our growth to great the and more markets. Dollar of Family attractive in we value increased serve Now deliver flexibility for Dollar in

kick-off a at holiday but quarter, for the the in still Family we to and us, banners, gotten It's season. to in start have in Dollar of behind seen Dollar sales weather pick-up trends Now, to May. both the and and colder-than-normal-spring pleased summer I'm Tree off early timing shift with it's a a positive both the

outbound to inbound to We and foreseeable pressure the continue for expect on cost, freight see future. both

diesel higher We cost we impact of these than Also, are to a we are had seeing the year in action Both outlook. run minimize these higher than pressures ago, planned. cost and are the included taking of costs.

the freight begin contemplated of ocean originally than in our in in We Our half year. the the see should rate benefits to negotiated planned. lower of back in lower-than-anticipated rates updated This also the April was came outlook.

are and investing competitive we our more quarter, labor benefits, in-store last in the in stores, hours wages with detailed we business more As standards. and

and I'm We create are investing a sales. to stores. because believe for better we drive teams experience able a to more and they areas will in opportunity better on specific business these our counting drive our be our

lawn and to and experience, QX. and business demonstrated value are early convenience in results our relevance garden. impacted in shopping QX with to after performance two good resilient, stories, two a with teams' Our Dollar's planned as overcame an the by around second the was Family relevant really our apparel spring, hard of achievement. and Family customer in In the pleased please in back Dollar segment, the by and weather Dollar comparison, comped rebuilding for Dollar was and and start seasonal greater bit better all the brand bounced Tree was consumables our Family particularly a quarter. weather making our I efforts I'm efforts positive in assorts strong, of we Easter.

summer initiatives the on and to basics teams goals. support into our deliver banner the our for now season questions. move we and teams, As are store merchants we're our Operator, field company ready and focused

Operator

from Thank Instructions] with Boss Matthew JPMorgan. Our [Operator comes question first you.

Matthew Boss

the at year is a versus there opportunity we concept anything guess, did the that same-store Great, best And identified if how Dollar that the the a you thanks. versus quarter you view or about here, to front, multiyear I two structural way on maybe internal you've in took Family your maybe the think Gary, ago? productivity today changes that look how sales plan? with

Gary Philbin

so. I think don't

business. we're we're building the It's think Matt, I still -- obviously fragile. still

I get doesn't weather customer in to of So buy could particular we I categories some the some that our think serve disruption, do of impacts, it. for point we Dollar of just this until that areas the really when we customer needs pointed she low which out Family income

take at that progress QX, And nothing we customer as so of a the see We I was it there's what when the being continuing change stores. renovations look the structurally. just fact fleet I make part in think to sees weather, of the the

see business private to It's when to drive We labor. changed brands them our bit labels going going be continue we the a change. structural stores. capital we're in that the to that's invest going be introduced to to to stores. continue our the and little of And And we invest. That's long-term

I as look take a the think and I point categories, at that things QX our I sales QX, great. to across can to impacted those

thought, Now the the some weather selling the start QX. of guess comps we're items from saw in at what and to are positive had what, we driving -- that's of we warmer that like QX swing the seeing one

value, to to improve Save our everything let's to to it's, are the everything our store get we've it's at That's Ways party EDLP So right. me, that that talked customer Wow, are brands the drive private being from let's to our store brings $X pricing going the fundamentals the to to experience. Smart across beginning, what

And can all great fleet. the day of And capital at to to of run Dollars. be changing in so in investing stores folks our the going we some going the end X,XXX-plus with Family be it's that's store

Matthew Boss

plan this quarter, is if at best which makes Great. Kevin, Dollar year de-leverage at sense, -- walk the And occupancy through just think progresses? line on your versus Family differences on that can the item from Dollar, concept, you any margin to drivers about then, Family how and the the and as this gross front margin gross asides sales-related

Kevin Wampler

I really is both difficulty] think for which remarks, points our from callout XX very were is approximately gross [technical significant obviously in in banners perspective. other big but basis both I as Matt, by Yes, our prepared the shrink banners, margin affected negatively noted

So to to the -- obviously The trend to trends. reverse while a we once and one typically understand issues. are teams little it take does our engaged about those you one see thing is a have of shrink working

So year. way that the rest going the think plays into forward we about again the of

changer So that's obviously from game a perspective. big my

little thing then beginning affects to driver it's we're not efficiencies issues we backhauls of other the able freight; well to obviously to Again, from the that. The basically what we've year. or it than to being at higher gain as is, trended of a spoken which lot related and a the spoke gain

would areas two are I probably So that callouts that would say. those be the the

Matthew Boss

of luck. Best Thanks.

Operator

you. Thank

Our Michael next question with from UBS. comes Lasser

Michael Lasser

Thanks of a question. lot morning. my Good taking

So in when Dollar pretty we XXX steady and same-store general look the were seen at And same-store to morning, Family that spread sales basis this have we expanded between reported points. Dollar also that that sales expansion of the years it's performance. it for influence we spread the benchmark last to of teams the that is only but couple completely clean really having now. over number, And not the have a way its own

it's is in the time? some larger expanding first been in So why and than quarter spread you think that was do

Gary Philbin

Gary. it's Michael, Hey,

take this me one. Let

our be are think on have over that dynamic. I the the working to everything we fundamentals change going long-term teams

up ought drive in starts So, do the that line, stores it that sales. we to to showing with everything top be comp

patterns served don't in buy store. their snow urban for way short Dollar dresses our biggest shopping being ground buy segments at we habits, if settings; when and sleeve the with the work just opinion some have, when in and though the Family some that says think customers Family Easter our low you're the more apparel that the this, travel of on are perhaps my same is it it the doesn't you of get one easily more where I income weather. Dollar, And QX you for disrupted there's

weather. were another well, there's things were sort of performing year-over-year storm." could piece we that's that point So the it. categories to that QX impacted into of that can compare to could the I bucket segments a there out because we "Oh, that when see So been should've sort And the of want see, by we you the winter

at longer-term; comp the think sales that still Those day will it's I the renovated do just been talking banner will structurally, everything or comps. drive to there end What structurally got drive right are continue the out stores the improve stores to is we've to any have do That's get about. to elements we quarter-over-quarter. in that behind the that of for departments. they'll footage us that's the adjacencies, comps improve square help store work have right comps. We've the

it We've the up into to respond. what it we had a right started going is QX bit the when notch is. we warmer assortment, belts summertime. a cinched believe our We see got and that So

that look quarter, because the we're And look things and our we're or and we path to that there assortments judge categories I a be way we more expanded Family and Dollar it's better Customer Dollar. those And improve. going down the more this the And us but of at consistent do in private once trips customer end I is a way know lot renovated whether at assortment that when the need along to, the doors of of month brand a still for going the over energy been at what it's in think more the on relies of continue So whole create We -- multiple with take going one to Dollar I at it of whether stop. food year-over-year does different course. can and frozen Tree, the we're based gaps going on need to comp it's year value because basics. would at that a at that with plans, along us go import same to at work those or of a take time. more year beginning not on by a of comp, kind which our the more it headwinds, taking Family drive fundamentals a times month, is Tree it's never need. She a assortment way, by on we look it the But a X% store get to of responds drives season. year the you Dollar our on a us

Michael Lasser

roll business? you do penetration the products accelerate greater more have in the with And lower and amount to and more traffic. that coolers provide any force drive freezers and with the Family is of the consumable presumably equation to a some to of of and for that plans a a piece traffic out But coolers of freezers really act Dollar consistency

Gary Philbin

Well, over going be We're both I thousand aggressive touching have a a between we think this well projects. year pretty banners. to plan project

renovations, are your additional we in mainly at accelerated it doors projects with exactly impact to the with the think I of point. foods, frozen bigger fashion both an doing which Family Dollar, are around along

to So and what the work for year. we're hopper, that's on continuing this that's in

than for it's of because others think for our key snacking customer rely the her more that month. of on a what point, -- on I both do meal maybe category and planning different does does it So a weeks

plan. So that's in the

Michael Lasser

Okay. luck. you. Best Thank of

Gary Philbin

you. Thank

Operator

Thank You.

Wewer Raymond Dan from James. comes with question next Our

Dan Wewer

XX% build that you to is dollars I gross Family this revenue is just Kevin, wanted I up think and I Dollar that's inventory Thanks. wanted XX confirm that It accrual explain significant was profit you then the the per correctly the inventory basis payback shrink that. square looks higher like And just also heard contributing of foot, to correct. to if in projected minimal. points? see if could

Kevin Wampler

levels, think mean, first improve we've that when said, that I been Dollar, customer. we consistently in-stock look Family at I being of to specially key the ready month, our Yes, at to inventory working time for service we have as

something, on that. several levels category mentioned, the so well fact which I currently going as that, And as that's resets inventory of as some elevated always for has been

back as were we And on out, some ago, point changes. as time, year were the go the we going pointed So at through that X.X% foot square selling of a a the down as other be the down. this expectation being would through come in I basis point is year we will actually

it all, I where inventory is to would think we be. expect all So, in

in since As far shrink on shrink, that more a as be leading I shrink, lower have would ago. specifically stores the I mean I stores, year honestly, are obviously know year don't when you to are the shrink levels to And that general. say the that because, tended that's for affect being inventoried results inventory really last an can have in inventory

an know something but that the it can longer So cause, be on our that's a I exactly that we eye keep term. effect don't because in it's do

Gary Philbin

at that's [ph]. disappointed color research did in And We anecdotes customers add just I measured the listen, our with tests several Dan, supply my our of to stores. a it. this are function customer chain. Dollar And Family would beginning of said our

Sometimes into it's and categories aim specific we the shelf. for want on meatier put replenishment the a We function of store. the to get

reset. And to as so anecdotes we the reflect some that we're going do QX to run year-over-year items minimize in are the on try also to a higher of inventory place level.

of in hat get inventory driving what's So that's rather that your is we've product tell real it store checklist, But than I help the or get one. the you and with inventory it's thing monitor a years a a the across the right and -- my I both if back their we ought at three I not sales it would down categories. becomes last up linger, frankly, part of operator good got we take put down of priority the shrink. banners, weekly, underneath and And levels got some as a mean, have couple that development some the I that and people think shrink quite to years eye point you too. things is just they monthly further The I yes, basis. to good of their on, to bring of think ball, on but people

Dan Wewer

consumables help you Save to private where the digital Smart has cetera, Hi at label, focus in et aggressive big think need Gary, segment in are caps, pricing follow-up, Dollar the Family for on a sales quick branded bridge more a point we placed better get that now to do deficiency? just coupons, end we to Ways

Gary Philbin

good some comps the to customers end categories brands it's quiver, and me, the I income despite think would It's comp arrow very our tell month overall QX down. survive many across national being our that the customer. thrive at some then for you times, the lowest brand of the of had in and we never one I

that has and an we entice what her point, to can't to price this she can up when Save basically of too Ways umbrella trade put that's Smart customer. stray number there's I says to think promoting was far we really a and some over, ways but money in opening her pocket,

us right, are to have the same we year more be day everything time. and right pricing, we competitive You every on at see than shows last that

a I merchant nice team assortment. done think gaining some the job, the has line on of some right

brands buys customer, I to one show Smart month. is the of month from private think market Ways of some us even intelligence end giving the our our and our which savings, customer she first to the to Save greater

dollar going it's to for customer business. approach We whole Dollar private umbrella Tree Dollar. Obviously and help our part So, with it be after our DNA. going enticing can to an how our this are Family better, it's with we of label, brands, allowance is go buying knowing been it certainly

Dan Wewer

Great, thank you.

Gary Philbin

Thank you, Dan.

Operator

Thank you.

Paul Our next question with comes Bank. Trussell Deutsche from

Paul Trussell

going the just the to than Family Dollar I'm was to Gary, Dollar and does know I that line asked just quarter-to-date? the line positive and core to question the Trees And the balance to all? the back over what thinking power Dollar calculate you headwind comp Dollar confirm, customer morning. health last they to slightly at differently. of XQ about Good I Dollar the deals spending to top questions it you banners? Tree guess of are circle year, what the try at the are that's greater the suggesting you your to crux just Family outlook be how weather and and significantly and on you top want think approach the how comps, do for part mentioned, the the of impact changed or And to of Dollar are your Family is Tree? then of

Gary Philbin

department, weather impact those sell the really have category Dollar. mentioned; Dollar we that -- me I lawn bigger as gets when categories Family start grills a the Family Tree garden people what around and At as are doesn't and Yes, Dollar it's let comps big and apparel Dollars at nice. Family charcoal everything we positive with two more weather at does obviously buy an that. And in

different at different a have segment, Tree. customer Dollar to and have product market, going different We we're

you don't shopping in Easter we was it's are one comp I Dollar merchants, the Dollar for the mean the to and Family that if reasons, operators, differently. think to but private you being knowing And team bus those teams, my line pleased. plan I and thing your a are all it's an with team, car, disrupted, March, that, really remarkable mean faced executed have early really it, snow hats customers, off quite I frankly that our gets with what Tree field on ground

has a work to I'd and between part point world, that's customer lots seen are up arriving don't when our it the we money if else that be things know, about difference the to So fuel like anybody our customer know up she I offering, that I to think tend seen right sort of for the have rents, we've buses apartment the still more customer, and respond would by I in maybe our to the this we cars of to about and obviously of and is that you customers to point stores us but in and all which more, say impacted of customer, how up, have health we our of go your banners.

we that to our that renovated, think do it's so new how been off. Dollar. we've overcome was reason being It's Family back what think It's a at time? go stores getting convenient. to goes I what's I working over the there,

we basics we got stuff of in it's to down, invent, right some being find to be closed Asia going that on this besides So and piece, products. is to going the store of on because we new spark some some is the the merchandizing our to just over that can of we to go when tied that the have some seasonal,

year. and but this I that Dollar it's we don't right we have that the over drive where time. items they agenda the for seeing banner front build So We've view to to those folks shrink either the back I strength expense. as it, the impact Tree, down We the things are our that mean, like from brand of right in Family feel a got basics combination like that then of them. of are is for a Dollar get now, on And on controllable that, will

of it, about same kicked this how with of pleased like here. So saw I is are we respond in sort what's the the how QX thinking out, QX, QX because that starting and at we said categories I'm beginning

Paul Trussell

taking and the And if you any Dollar's what needed comp potential to advantage P&L and thoughts year? timetable get of still flow synergies there? are EBIT margin on the and see updated Family your what the this into And are

Gary Philbin

around was it the was off that's was Well, and a similar me synergies banners, tell, going logistics. portion buckets now match Trees. indirect product, Family take co-banner. least kick after been big Dollar the around to that able so read smaller At we It DC towards Dollars items, the our identical one really let on the of, were have advantage to

down really or So, are to but kick our finding work don't elements stop and we for to as for in as we through synergy both those we opportunities banners It that, together P&Ls at one number. mean we march get taking this auctions apple get off doesn't system, the cost forward. bite

year, find vendors, to this the banners people of find that the the the to indirect. they'll merchandize right opportunistic. on an sprinkling while And together now leverage go to to a the capacity need same we're side, teams vendors, so, on them read work be to to going more market And of do

question renovations, and get be said that sales historical by line to back to to to stores. and we have top we to number we able your that of be that to able go be levels, do think back underpinnings going the got I are driving to new will me to

in of yes, Dollar about out the year, Now a new that. you a think I doing pipe coming want Family we of stores bigger stores are number ultimately XXX

Family do up now. new the we and as -- renovation, on we opens adjacencies the work part needed of to to that's So, that's it and how Dollar make needed slowed down work our

been and work on will changes, stop, over fleet side the about going it's the Ways that we've going Smart won't that that on, us be some underneath time. The As umbrella to line but Save the of give go elements talking stability on merchandizing that's comps to morning. top to this

them do the to and or there, people customers and give the into the there, So in our keep driving Family need of incredible values beginning things path the month the our stores, we signed the we come to in are still reason and of that the the but to we're up for have facilities The too, at to Dollar get there. for the end beginning the we invest that still month.

Paul Trussell

for of Thanks Best color. the luck.

Operator

you. Thank

Ciccarelli comes Scot next Capital with from question Our Markets. RBC

Scot Ciccarelli

thought -- or exceeded guess, color, -- guys Gary, I if to Ciccarelli. guess little Family guys; you growth leverage synergy you synergies, think it's with a I it your start to question. natural just follow-on and According Hi, about, costs bottom-line Scot in way or if need you have imply of to proxy, target, there guys still to you a your you is improvement as bit could could already are to significant Paul's little what of and at to more generate Family a to so Dollar extract terms I sales really drive talking bit kind are more Dollar. I the start provide you of about

about right that? it get out coming of way kind to natural we cost the and line or it, Just to what's think is top generate to leverage the got

Gary Philbin

a have one, always the from cost the $XXX had think we sure, your end been Well, as that expectation line, that achieved. been business it -- on of achieving we synergy, related Scot, performance to proxy, three-year. it for rate we the note very of always $XXX in certified To about at it to it, had stated think point run I we had million your and starts day in been we top point driving plan did with million long-term conscious synergies but a the

and some had forward areas of cost our goods move of reinvested would targets think well the As in along those you exceeding areas. would. optimization, and part went success the spend, of to as that, banner as you We've of we improve significant know, indirect we business it sold those we some as dollars in

our process from would that relates hitting process we're would what Dollar to culture synergy that normal of from savings good. to transitioning improvement really we're was cost based call we away that mark here and call and we so about as days what performance it so very now a really XX our really And been long But three-year Tree. part at have initiatives

I speak run going think we're to continue, its -- processes from to in So Gary's top point just those that's where We'll continue. to your to to But we and it's need but will our type to course on long-term would various we time in things, to those issue, with important to continue point, synergies margin. and drive in really of get work this kind of things get anymore, us. do not -- cause at the line will like very point, to

Scot Ciccarelli

Understood.

thanks, guys. Okay,

Operator

you. Thank

next comes John Our question from Guggenheim. with Heinbockel

John Heinbockel

related, until two as physicals? making Tree, while, that in-stock I not, you're Gary, would And head in be labor And category do from at you today? think Dollar here would you or we would do things, the that, Dollar guess, us you coming where for more achieve bucket? can shrink be or where So but into secondarily, probably right out you Family assess overall much then with process at maybe is you XXXX? it with you a that how is conditions product how Obviously, how assess investments store think improvement most important, just the shopability, do maybe

Gary Philbin

give me and sometimes store are you stores a have and know, to a ways we They've little, with coverage. let the our it's at fragile we we with or improved start perfect, our teams no, field I Well, still conditions and we store Dollar. credit. Are would teams minimum run Family go,

phased the we with of your shows I fundamentals about done, schedule, the truck we're customers bus in it's taking building to second think up how primarily. that around Dollar we sort a then to efficiency. how can it's on it about building and speaks late where of recovered out each a maximum or do Family to stores And rocket is And do think drive invest stocked, buckets a we those care the do be this the But This you and so of be isn't our and labor side. gets science. getting them at risk. And work customers, question getting

to stores investment, our trying categories not trends difference. see in to store invest drive specifically that the our we invest every opportunity sales to we're those on peanut upside, We're trying to butter because in labor So, around the really of and everywhere.

Now, we deferring floors, when Cleaner getting facilities we that. our the do the the beyond way, work own along against not an maintenance, that investment hands too. made all interests that best around our sometimes things

to tried is say have also long who to it shopping ought in to run a but always manage real need what you the better our So over experience. tried for we've time, customers we've

comes. from and the Family Tree those working sales are Dollar as investment the doing floor the stores some Tree, to let's at the it's So at renovation have getting with Family store comp adjacencies we're renovations, around right, Dollar on some program. the And the sometimes and work been with Family as simple team there's of the Dollar, it's right move At freight store that, new room the the the both Dollar in the but upside on. labor, back also Dollar. it's and the And of let's things elements

sort much that So doing of basically to don't now got staring of it's XX% We are. a cards everything it year's you me, issues never into ahead got not those. so them hard really I reacting the down that why boil year. I fire. we performance. it where to Shrink, forward-looking But could on see And there's going you we're right, of get us. some is you're to both we but of mean, comes data to next to this we inventories, runway tell to different see when lots working impact reasons, of I And can impact us give of that's the to score our down smoke through a shrink. we're stop of And matter really,

goes and level chain. food way at the starts the up that store all So

right difference. year. do And them information our I a six folks make data counting the for next we're think to to the months next got that over on

John Heinbockel

Okay, thank you.

Gary Philbin

John. you, Thank

Operator

you. Thank

one time for from Gordon have with question We Chuck Grom more Haskett.

Chuck Grom

think, positive said thanks, comfortable the following questions if remainder I the to back the you couple year up of of could update here with want across comps on gross line I line, to margin on Paul's points. Hey, of basis still wondering guys us. the guidance, then see on kind just both just item Kevin, in a earlier. banners. March you in I was And XX you XX that for down if are

Kevin Wampler

an on enterprise as we've basis relates Obviously, comps guidance it our as we said, to comps. low give single-digit

comfortable we're with So obviously that.

obviously forward. As we've it gross margin we've bit more a is fact relates what given there line little up more there item trade think today, a are that obviously I with going pressure as well to talked than be margin, seen said in within gross about the and the had what little that there'll and we category pressure what initially shrink probably as

Chuck Grom

have would just seeing I'll back what quarter? A for at comped just had sense out trended business, try that of the similar crack to then what first Dollar if or in have weather it. the backed business wondering another number quarter And of you're issue, on seasonal apparel any out, tried Family retailers first the it to sort today,

Kevin Wampler

short don't lawn fence those say and ifs. I should. think on was warm some that categories -- for store some hoodies comp. seat [technical the it in But put it of what That's impact right to It's customers you're better when of I it and does game of fit. of tops. the gets think -- we find and that's I QX as almost in back things were me when of can a short are And good it because March a who I tells garden I not I a And -- got our we mean, pops part it's around it and your thing now, that I issues. a it's a difficulty]. and know. went long-sleeved some big need know had it, she our enough why Well, out negative weeks

got the we think now switch shopping we as patterns. I and that May into saw traditional into So

Chuck Grom

was just a you one number acquired And And Okay. there one, before last which some of issues, bigger just were price. then Dollar, obviously, of Family picture.

it then of of estate. was Some thought it a people was execution lot and real

run I'm know, look to problem. on as really a job don't good and -- quarter think stakes how real address do I it? first but real our do the wondering which look the want table if estate it the you estate address I problem in of price, you done you've leaves far, at too with set a based You've then with that you kind segment? great, And there's checks FDO think initiatives on timelines to so And

Kevin Wampler

I won't problem. a say

at over give we year every stores renewal. some which there's different I -- of a the in was come part And going out time, square up saw footage of lease store that the the formats right it's stores right think the don't is number a there fleet opportunity of on that -- departments, program what renovation does.

-- Family time, ought don't where the where I know over for in renovations stores would best. want to to we But and it we really was be business getting more did see was top program. put of where side new we part put a the opportunity perform of a store know, the say and this -- down the the That's that it's think going the closing the the we reason whatever I to think with be of drive the them pieces take of the bit But for opportunity we the you They'll while exciting performing to to where chessboard, how want. aren't on So it. be and can stores we we are the advantage new proportion I Part to opportunity Dollar. reason. stores

So in come execution all let's retail about, tend those to right, better that yes, in the other are pricing drive you the the in invest back talked performance. store get things store. Over get the and time, those things store,

not important our taking those sights So, go we we forward. are as elements off

Chuck Grom

much. Thanks Okay. very

Operator

for would to over Mr. Randy like conference turn I Guiler closing to the now remarks. you. Thank

Randy Guiler

Thank you, interest Jonathan, for for you Tree. continued us and today's and thank call, for your joining especially Dollar in

XXXX. for scheduled quarterly QX next discuss call Thursday, earnings conference August is results a Have Our XX, to good day.

Operator

today's Thank teleconference. you. gentlemen, Ladies and concludes this

You may now disconnect.

Dollar Tree (DLTR) 31 May 182018 Q1 Earnings call transcript