Dollar Tree, Inc. (NASDAQ:DLTR) Q3 2020 Earnings Conference Call - Final Transcript
Nov 24, 2020 • 09:00 am ET
Good day and welcome to the Dollar Tree Inc.'s Third Quarter Earnings Conference Call. Today's conference is being recorded.
At this time, I would like to turn the conference over to Mr. Randy Guiler, VP, Investor Relations. Please go ahead, sir.
Thank you. Shelby. Good morning and welcome to our call to discuss Dollar Tree's performance for the third quarter. With me on today's call will be our President and CEO, Mike Witynski; and our CFO, Kevin Wampler.
Remarks that we will make today about future expectations, plans and prospects for the company represent forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Results may differ materially from those indicated by these forward-looking statements due to various factors included in our press release, 8-K, 10-Q and Annual Report, which are on file with the SEC. We have no obligation to update our forward-looking statements and you should not expect us to do so.
Following our prepared remarks, we will open the call to your questions. Please limit your questions to one and one related follow-up question.
Now, I will turn the call over to Mike Witynski, Dollar Tree's President and Chief Executive Officer.
Michael A. Witynski
Thank you, Randy. Good morning, everyone. 2020 has proven to be the most unpredictable and unique year in my 40 years in retail. Nearly every business, family and person has had to adapt and react to what is currently a new normal. My heart goes out to every family that has been impacted to some degree by the coronavirus. I would also like to give a shout out to all the medical professionals, frontline workers and others who are working tirelessly to ensure that we stay safe and healthy.
In an environment where individuals are concerned about their health and exposure, about their income and jobs and about not knowing what is next, I firmly believe that Dollar Tree and Family Dollar are part of the solution. Our 15,000 plus stores are close to home and easy to shop, providing great convenience and we offer a broad assortment of tremendous values to meet both needs and wants. I am incredibly proud of our team's effort in the third quarter to continue serving customers effectively while driving operational improvements in both banners through this extremely dynamic retail environment.
The team delivered an earnings per share increase of 28.7% compared to the prior year's quarter. These enterprise results were comprised of 5.1% same-store sales increase, a 150-basis-point improvement in gross profit margin and a 30-basis-point increase in operating profit margin. Our Dollar Tree segment delivered its strongest same-store sales performance in the past 10 quarters with a 4% increase. Gross profit margin improved 70 basis points to 34.9% versus Q3 a year ago. And operating margin increased 50 basis points to 12.7%, which represents a 300-basis-point improvement from Q2. The quarter included $28.6 million in COVID-related costs.
Geographically, comp sales were positive in all zones. For the quarter, discretionary delivered