Dollar Tree 4Q profit up on higher sales

RICHMOND, Va. (AP) — The discounter Dollar Tree Inc. said Wednesday that its profit increased more than 15 percent in the fourth quarter as consumers spent more at the retailer's outlets that sell goods for $1 or less.

Dollar stores, which benefited from shoppers trying to stretch their dollars in the recession, have expanded rapidly and seen sales continue to grow. They're also taking business away from retail giants like Wal-Mart Stores and Target.

"As customers strive to balance their budgets, they can find the high-value basics they need while enjoying the thrill of the hunt on every visit," CEO Bob Sasser said in a conference call.

Top-selling items during the quarter included food, health and beauty care, products for the home, party supplies and seasonal products.

The Chesapeake, Va.-based company said its net income rose to $187.9 million, or $1.60 per share, for the period ended Jan. 28. That's up from $162.5 million, or $1.29 per share, a year ago.

Net sales increased nearly 18 percent to $1.95 billion from $1.73 billion a year ago. Revenue at stores open at least one year increased 7.3 percent. That comparison is a key gauge of a retailer's health because it excludes stores that recently opened or closed.

Analysts polled by FactSet expected earnings of $1.58 per share on revenue of $1.93 billion.

For the full year, the company said its earnings rose 23 percent to $488.3 million, or $4.03 per share, compared with a year earlier. Its net sales increased nearly 13 percent to $6.63 billion and sales at stores open at least one year increased 6 percent.

Dollar Tree expects 2012 net income between $4.65 and $4.90 per share, on revenue between $7.25 billion and $7.42 billion on low- to mid-single-digit sales growth at stores open at least a year.

That left some room for disappointment. Analysts expected, on average, earnings of $4.82 per share for the year on revenue of $7.32 billion.

Dollar Tree shares fell $2.44, or 2.7 percent, to $85.57 in midday trading Wednesday after trading at a 52-week high of $89.98 in Tuesday. Its shares have risen 76 percent from their low of $48.51 almost a year ago.

The company operates more than 4,350 stores in the U.S. and Canada. It opened 21 stores, closed five, and expanded or relocated three during the fourth quarter.

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Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum.