Dollar Tree Posts 20 Percent Rise In Q3 Earnings

November 25, 2008 7:25 p.m. EST

Chesapeake, VA (AHN) - Dollar Tree Inc. announced Tuesday third quarter earnings rose 20 percent on strong sales as store traffic picked up with consumers looking for bargains.

The discount retailer posted third quarter earnings of $43.1 million or 47 cents a share, up from $35.9 million or 38 cents a share in the same period a year ago. The result topped analyst estimates for 44 cents a share, according to Thomson Financial.

Revenue totaled $1.11 billion, up 12 percent from $997.8 million last year.

Dollar Tree said same-store sales rose 6.2 percent in the quarter on a 5 percent increase in customer traffic, while average transaction size grew by 1 percent.

"With all of the economic uncertainty, high fuel and energy prices, and pressure in general on the household budget, consumers have to save somewhere," said CEO Bob Sasser on a conference call.

"Customers know they can find great value at Dollar Tree for just $1.00 and a convenient, positive shopping experience," he added.

The company reported 68 new store openings during the third quarter, bringing total new stores for the year to 201. Dollar Tree operates 3,572 stores in 48 states.

Looking forward, Dollar Tree expects fourth quarter revenue of $1.38 billion to $1.42 billion resulting in earnings of $1.07 to $1.15 a share.

Shares of Dollar Tree rose 9.1 percent on the news, settling at $41.78 on Tuesday.