Dollar Tree, Inc. (NASDAQ:DLTR) Q3 2017 Earnings Conference Call - Final Transcript
Nov 21, 2017 • 09:00 am ET
at the Family Dollar level, both on sales and margin.
That's great. And then just a follow-up, Gary, and more higher level. How would you speak to the health at the low end? We seem to be seeing some laterals even outside of the Dollar Store segment. And judging by the trends that you're seeing in discretionary, and I think you cited the best in a long time there, are you starting to see any signs of some wallet opening? Just best way to characterized what you're seeing out there with your core customer. And do you think it's sustainable?
I think I would answer it two ways, Matt. I think on one side, it's just us executing better. And that speaks to 1st of the month and getting our stores ready and in-store execution on all the store table stakes. So at a very high level, let's go get our fair share. And I think I've mentioned before, we have seen the increase of EBT benefits at Family Dollar, even though across the country, they're down. Small portion of our tender type but still, I think it speaks to just having the confidence when our customers come in at the most important time of the month, and that's at the beginning. I would say I think this is a customer that still is under pressure. Rents continue to rise. Health care continues to rise. We have to be right on when they have money in their pocket. We call it thrive and survive. So certainly, at the beginning of the month for our most needy customers, we need to be ready in-store with the basics, and at the end of the month, give them the right choices on the items that continue to give them a reason to come shop us at the end of the month when they're trying to stretch their budget. So we got to stay focused on that customer who might have a little more jingle in their pocket. But we have to got to be grounded on everyday great retails, and they got to have confidence that we're in-stock with them in-store. So it's a combination of doing both those things.
(Operator Instructions) Dan Wewer, Raymond James.
Gary, first question is regarding the Dollar Tree segment. Can you discuss what kind of comp sales benefits that you're now getting from the rebanners at the Family Dollar and Deals stores? And then further, with operating margin for the Dollar Tree segment now at a lifetime high, what kind of headroom for improvement remains given that this is a discount or not a specialty retailer?
Well, I'm honored to be considered a specialty retailer, but I think it's two pieces, I think, are driving the results for us, Dan. Upside on operating margin, we're very proud of the results. I would say it's driven right now because of just the ability for us to get smarter across each of our store clusters. Our merchants have done