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Investing.com -- Dollar Tree Inc. shares jumped 4.3% in premarket trading Wednesday after the discount retailer reported better-than-expected fourth-quarter earnings and announced plans to sell its Family Dollar business.
The company reported adjusted earnings per share of $2.29 for the quarter ended February 1, beating analyst estimates of $2.19. Revenue came in at $5 billion, compared to $5 billion in the same quarter last year. Same-store sales at Dollar Tree (NASDAQ:DLTR) locations rose 2%, driven by a 0.7% increase in traffic and a 1.3% increase in average ticket.
Dollar Tree also announced it has entered into a definitive agreement to sell its Family Dollar business to Brigade and Macellum for $1.01 billion. The company explained that in Q4, it determined that the assets of the Family Dollar business "met the criteria for classification as held for sale."
The deal is expected to close in approximately 90 days. The company expects the net proceeds to total approximately $804 million.
"With the sale of Family Dollar set to close later this year, we will be able to fully dedicate ourselves to Dollar Tree’s long-term growth, profitability, and returns on capital," said CEO Mike Creedon in a statement.
For fiscal 2025, Dollar Tree expects net sales from continuing operations of $18.5 billion to $19.1 billion, with same-store sales growth of 3% to 5%. The company forecasts adjusted earnings per share from continuing operations of $5.00 to $5.50 for the full year, compared to consensus expectations of $5.44.