Discount retailer Dollar Tree Inc. said Wednesday that its fourth-quarter profit rose more than 20 percent on higher revenue, with strong results in the Southwest and Southeast U.S.
"Traffic continues to grow as more customers are responding to Dollar Tree's excellent values, balanced merchandise assortment and convenient shopping experience," CEO Bob Sasser said in a news release.
The company's top-performing categories in the quarter included food, party supplies, health and beauty care, and housewares and home products.
But the company's earnings guidance for the full year suggested it may miss current forecasts, and Dollar Tree shares tumbled $2.43, or 4.7 percent, to $49.74 in afternoon trading.
The Chesapeake, Va., company reported net income of $162.5 million, or $1.29 per share, for the three months ended Jan. 29, up from $135 million, or $1.01 per share, a year ago. Revenue rose 11 percent to $1.73 billion from $1.56 billion.
Analysts polled by FactSet expected earnings of $1.27 per share on revenue of $1.74 billion.
Revenue at stores open at least one year _ a key indicator of a retailer's health because it measures results at existing stores while excluding the effects of new stores and closings _ rose 3.9 percent.
In the fourth quarter, Dollar Tree said it opened 19 stores, acquired 86 stores and closed 13 stores. The company ran 4,101 stores in 48 states and 4 Canadian provinces at the end of the quarter.
For the full year, the company reported net income of $397.3 million, or $3.10 per share, up from $320.5 million, or $2.37 per share, in fiscal 2009. Revenue rose to $5.88 billion from $5.23 billion.
Looking ahead, the company expects first-quarter profit between 71 cents and 77 cents per share on revenue between $1.48 billion and $1.52 billion. For the full year, the company expects profit between $3.55 and $3.76 per share on revenue between $6.43 billion and $6.6 billion.
Analysts expect first-quarter profit of 73 cents per share on $1.5 billion in revenue and annual profit of $3.70 per share on $6.5 billion in revenue.