On Tuesday, Shares of Dollar Tree, Inc. (NASDAQ:DLTR), lost -8.67% to $69.65.
Dollar Tree stated results for its second fiscal quarter ended August 1, 2015.
Merger Integration
On July 6, 2015, Dollar Tree accomplished its acquisition of Family Dollar Stores, Inc. Since that date, the Company has been executing its integration plan.
Sasser added, “We are very happy to have successfully accomplished the acquisition. We are now an organization with annual sales surpassing $19 billion, more than 13,800 stores across North America and a network of more than 145,000 associates. We remain confident in our ability to deliver $300 million in annual run-rate synergies by the end of the third year post-acquisition. This combination provides us with the unique opportunity to leverage our multiple banners to better serve a broader range of customers, while enhancing our ability to deliver long-term profitable growth for our shareholders.”
Second Quarter Results
Net sales raised 48.3% to $3.01 billion from $2.03 billion in the preceding year’s second quarter. The improvement was the result of $811.6 million in sales from the Family Dollar segment since closing on the acquisition, and a same-store sales improvement of 2.7% on a constant currency basis for the Dollar Tree segment. Same-store sales raised 4.5% in the preceding-year period for the Dollar Tree segment. Adjusted for the impact of Canadian currency fluctuations, the same-store sales improvement was 2.4%. The positive same-store sales were driven by improvements in customer count and average ticket.
Gross profit raised by $161.1 million, or 23.2%, to $855.2 million in the second quarter contrast to $694.1 million in the preceding year’s second quarter. The dollar improvement was primarily driven by $105.9 million of gross profit for Family Dollar in addition to higher sales at Dollar Tree. As a percent of sales, gross margin reduced to 28.4% contrast to 34.2% in the preceding year. The primary contributors to the decrease were $60 million of markdown expense for Family Dollar related to SKU rationalization and planned liquidations, $11.1 million for Family Dollar related to the amortization of the stepped up inventory basis and the impact of the overall lower-margin product mix for the Family Dollar business.
Dollar Tree, Inc. operates discount variety stores in the United States and Canada. Its stores offer merchandise at the fixed price of $1.00. The company’s stores provide consumable merchandise, which comprises candy and food, and health and beauty care products; and everyday consumables, such as paper and chemicals, and frozen and refrigerated food.
Finally, Summit Materials, Inc. (NYSE:SUM), ended its last trade with -2.81% loss, and closed at $22.80.
Summit Materials declared that it has accomplished the acquisition of LeGrand Johnson Construction Company, a vertically integrated construction materials company based in Utah and servicing the northern and central Utah, western Wyoming and southern Idaho markets. LeGrand operates five sand & gravel pits together with four ready mix concrete plants and five asphalt plants. LeGrand will become part of Summit’s Kilgore Companies business in Utah.
Tom Hill, CEO of Summit, stated, “This acquisition is compriseent with our materials-based growth strategy, and is a great fit with our Kilgore business in Utah and the surrounding states. LeGrand has established many strong customer relationships and an excellent reputation for high-quality products and services over its long history. We are very happy to welcome Legrand and its employees to Summit Materials.”
Larry Jardine, CEO of LeGrand, commented, “We are excited that this acquisition will enable our company to continue the legacy of its founders, LeGrand and LaRee Johnson, and their family members who, together with hundreds of employees over the years, have worked so hard to make the company a success.”
Summit Materials, Inc., through its auxiliaries, produces and sells heavy-side construction materials and related downstream products. Its products comprise crushed stone, construction sand and gravel, cement and ready-mixed concrete, asphalt paving mixes, and limestone and concrete products.
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