The largest U.S. dollar store operator's existing store sales inched up, falling shy of analysts' estimates. But Fred Katayama reports, investors cheered the results.
Investors cheered Dollar Tree's earnings results even though profit fell and existing store sales inched up just 0.5 percent, much less than analysts had expected. And same-store sales at the former rival it acquired, Family Dollar, posted a surprise drop. Dollar Tree said its low-income customers tightened their wallets because tax refunds started later this year due to a new IRS law. Wall Street opted to focus instead on the robust performance at core Dollar Tree stores, pushing the stock higher at the market open Thursday. UBS analyst Michael Lasser said, "Our belief is that the core Dollar Tree comp of 2.5 percent was a little better than expectations." Helping lift sales at Dollar Tree stores: snacks, drinks and frozen food products. Dollar stores haven't been hurt much by the grocery price wars that have wracked Wal-Mart and Kroger because they attract millennials and price-conscious shoppers who want to avoid big stores that sell huge packs of supplies.