Dollar Tree 1Q16 Earnings Call Notes

Dollar Tree’s (DLTR) CEO Bob Sasser on Q1 2016 Results

Sourcing opportunities are terrific

“the sourcing opportunities are terrific. They are very favorable right now. There’s nothing structurally that stands in our way of increasing our merchandise margins. As you know, in times of favorable buying opportunities, our retail is always $1, so we manage our costs in the market and the value by looking at the cost.”

No plans to turn Dollar Trees into multi-price point

“We have no plans to turn our Dollar Trees into multi-price point retail. Just as we have no intent to turn Family Dollar into Dollar Tree at single-price point retail. The power in this is in both brands and operating and running both brands at a very high level to serve more customers in more ways.”

The shift of Easter and a cold rainy spring affected comps

“I think you can characterize the first quarter as the shift of Easter and a cold rainy, damp spring. That’s pretty much. Easter shifted to two weeks earlier so you got more sales in February and March because of the early Easter. And then one week in March you lost the impact of the Easter that we were up against from last year. And then the first week you lost the other. And then you had a couple weeks after that that were just really lousy weather, frankly, for this new spring goods that we had now changed our stores over to. So, that’s the cadence. That’s what I saw in April. It was really just the cold spring weather and we lost a lot of the Easter sales into March.”

Miscellaneous Earnings Call Notes 3.4.16

Splunk (SPLK) Douglas Merritt on Q4 2016 Results

Amount of data will double ever two years through 2020

“Analysts estimate that between 2013 and 2020, the amount of data generated globally will increase tenfold, doubling every two years. That is why we firmly believe that by any measure of penetration, we are just getting started. ”

Clear Channel Outdoor’s (CCO) CEO Fred Davidson on Q4 2015

TV now reaches only 85% of US adults

“The other major trend is the much-publicized decline of TV usage as measured by Nielsen. According to Nielsen’s Q3 comparable metrics report TVs weekly reach continues to decline, now reaching only 85% of U.S. adult 18-plus and it’s particularly losing ground with the key millennial audience. By contrast, radio continues to reach 93% of all U.S. adults 18-plus.”

Only 3 in 10 millenials watch TV and 50% of 18-24 year olds don’t watch in prime time

“TVs weekly reach among millennials is only 73%, dropping into third, below broadcast radio at 92% and smartphones at 84%. In other words, today roughly 3 in 10 millennials don’t watch television. An incredible statistic. The picture is even bleaker with a younger audience. Only 50% of people aged 18 to 24 watch broadcast TV in prime time.”

Del Frisco’s Restaurant Group’s (DFRG) CEO Mark Mednansky on Q4 2015 Results

The upscale guest is spending more money

“contrary to popular belief, the upscale guest is spending more money. We see that at the Del Frisco’s brand, we see at the Sullivan’s brand. ”

Mitt Romney Donald Trump takedown speech

“If Donald Trump’s plans were ever implemented, the country would sink into a prolonged recession…His proposed 35% tariff-like penalties would instigate a trade war that would raise prices for consumers, kill export jobs, and lead entrepreneurs and businesses to flee America. His tax plan, in combination with his refusal to reform entitlements and to honestly address spending would balloon the deficit and the national debt. So even as Donald Trump has offered very few specific economic plans, what little he has said is enough to know that he would be very bad for American workers and for American families.”

Tutor Perini’ (TPC) CEO Ronald Tutor on Q4 2015 Results

Building markets stronger than ever in CA NY and FL

“Our Civil markets are continuing to grow as evidenced by the increased volume of bidding opportunities and we continue to maintain a significant part of that growth as we deliver the profits we expect. We believe the new highway bill will be realized in the near future and that should only add to the growth we expect. The building markets are stronger than ever in California, New York and Florida which are our primary building markets where several major projects are pending and we believe some significant announcements we will make in the next 60 to 90 days particularly in Florida.”

Dollar Tree’s (DLTR) CEO Bob Sasser on Q4 2015 Results

On track for a good first quarter

“As far as current trends, obviously we’ve finished one period out of the three so we still got two period to go on the quarter, but I’m pleased with where we are. It’s always — you usually get a weather report sometime in February and when weather was adverse, it wasn’t as good as we thought but overall we ended up with a good first period and on-track for a very good quarter. And frankly, I’m looking forward to a period of time when we don’t have those disruptions like we had last year from the port strike, and I think you can see in our inventory, we have the inventory that we should have had last year. We have that inventory this year, so my expectation is that we’re going to have a, we’re on track for a good first quarter. Easter’s a little early, the early Easters at Dollar Tree aren’t usually good, so we’ve said that’s a $10 million head wind. But at the end of the day, we’ve given you our first quarter guidance and any color on that is we’re on track.”

Medtronic’s (MDT) CEO Omar Ishrak on Q3 2016 Results

There were no economy related issue, but the anniversarying of the affordable care act did slow us down a bit

“Like I had mentioned in the last call, the three things that we look at in the U.S, one is one which we knew was going to slow things out a little bit was the anniversarying of the Affordable Care Act and that probably had a little bit of an impact. The overall procedure volumes based on the economy I think were more or less steady. I think in the Surgical Solutions maybe a slight drop in procedure volumes, but essentially it was steady. There was no economy related issues.”

Miscellaneous Earnings Call Notes 11.25.15

Post Holdings’ (POST) CEO Rob Vitale on Q4 2015 Results

Improvement in cereal category

“The cereal category has continued to show improvements in its rate of decline. While we would certainly like to be discussing category growth, the first step in getting there is slower decline. We attribute this improvement to an overall increase in cereal advertising, a modestly improving consumer profile, and simply the lapping of weaker comparisons.”

Dollar Tree’s (DLTR) CEO Bob Sasser on Q3 2015 Results

Combining companies under shared services model

“I mean, we are – as I said we are putting this huge company together into a shared services model. Over time we’re going to be combining both banners under one supply chain, with all of our buildings supplying product for all banners with the ability to supply merchandise for all banners.”

I think our customer is still under pressure

“I think the customer especially our customer, our middle income, low middle income to lower income customers are still under pressure and they are concerned. They’ve seen lower gasoline prices and that’s helpful. But at the same time it’s not enough to do that lower income customer. It’s just on enough to make a change in your shopping habits. And at the same time they’ve seen lower gasoline prices. They’ve seen higher food prices. They’ve seen higher rent prices. They’ve seen higher healthcare costs. They’ve seen higher taxes. So they are still concerned, they are still under pressure”

Beacon Roofing Supply (BECN) Paul Isabella on Q4 2015 Results

I still think there’s a lot of pent up demand

“when you look at our business and look at the market we’re in, I am still extremely positive on what the future holds because I know and/or my view is and my opinion is there is a tremendous amount of pent up. I think folks have deferred a bit and I think it is a function of income ability to take equity and all the things we talk about whether it’s the existing home sales…my view is at some point there is going to be some form of a break out and there is going to be much more demand than we are seeing now. But the ultimate question is when, which I just can’t predict.”

Dollar Tree 1Q15 Earnings Call Notes

Easter shift affected the quarter

“This was a unique quarter with several external factors impacting Dollar Tree and other retailers. In particular, a calendar shift with Easter falling two weeks earlier this year, we estimate the impact of the holiday calendar shift was a negative $8 million to sales and additionally, the recent west coast port slowdown increased in severity, it lasted longer than expected and it negatively impacted our earnings as higher margin import merchandise was delayed in getting to the stores.’

Reasonably caught up from the ports

“The good news is that we are reasonably caught up in the DCs, the merchandised floor of our imports coming through the west coast is more normalized, product is shipping to stores more efficiently and our customers are seeing fresh new high-value merchandise in the stores.”

Seasonal energy was high

“Seasonal energy was high throughout the quarter, beginning with Valentine’s Day. In addition to party essentials, our stores were well stocked with cards, gifts, gift bags, balloons and candy for that special purpose or that special person. Seasonal sell-through was good and stores quickly and efficiently transitioned the St. Patrick’s Day and Easter.”

E-commerce from everyone

“For 2015, we have focused commitment, driving traffic to our website. In addition to creating brand awareness and brand advocacy, we’re committed to driving sales to both our e-commerce division and our stores. In the first quarter, we saw more than 12 million visits to our website through desktops, laptops, pads and phones.”

FDO is a complex merger. It’s taken longer than we anticipated

” this is an extremely large and complex transaction, involving more than 13,000 retail store locations. It is the largest of any previous retail merger. Needless to say, this process has taken longer than any of us anticipated. We’re continuing to work very hard to close the transaction as soon as possible and our current expectation is that we can have this transaction completed in early July.”

There are many stakeholders in a business

“we will manage this business with a focus on what is best for our stakeholders, including our customers, our vendor partners, our associates and importantly, our long-term shareholders.’

We’re pretty much past the port issue

“most importantly, for the most part this port issue is behind us. And as we entered second quarter, it’s early in second quarter, we were able to sell our Mother’s Day product. We had really, really nice Mother’s Day sell-through, so it’s nice performance in our stores for Mother’s Day product. We’re seeing new product on the shelf. When our customers come in now, they’re seeing all the things that we expected them to see that we wanted them to see and they’re reacting pretty well to it. So we’re pleased to be past. Best news about the port slowdown is we’re pretty much past it.”

We watch and shop at our competitors

“We shop other retailers. We watch what they are doing. We strive to be proactive and not reactionary to what others are doing. That said, we’re not seeing, I don’t see any significant changes in the overall competitive landscape. It’s always been very competitive.”

Our goal is to be competitive with wages, but no plans to change them right now

“Our goal is to pay a competitive wage by market in order to fill our workforce needs based on the fulfilling rates. We made no plans for a sweeping change to our minimum wage rates.’

Freight costs are a headwind because not enough capacity in trucking as many firms were hit hard last cycle

“we do expect freight costs to be a headwind as we go through the year. And it’s not only the driver piece of it, but it’s also the fact that as we went through the economic down cycle, there are many less firms out there today, trucking firms and so the competition has gotten less in some respects.’

We’re off to a good start

“I will tell you that it’s early on in the first quarter. So it’s hard to declare a victory right now, but we feel like we started off where we needed to start.”

Dollar Tree 4Q14 Earnings Call Notes

Each week I read dozens of transcripts from earnings calls and presentations as part of my investment process. Below are some of the most important quotes about the economy and industry trends from the transcripts that I read this week. Full notes can be found here.

Sale accelerated during quarter

Same-store sales were solid and accelerated throughout the quarter. Performance in the home, seasonal and basics divisions were tightly grouped and our sales increase resulted from strength in both basic consumables and discretionary products.

Inventories flat despite strong store growth

m extremely pleased with improvements in our inventory management. In 2014, we had 391 new stores and 3.2 million selling square feet. Yet our overall inventory dollars remained essentially flat to the prior year and our inventory turns improved approximately 30 basis points.

7.2% increase in sqft for 2015

Square footage is planned to increase 7.2% over fiscal 2014.

Freight expensive because of truck driver shortage

Freight cost as a percentage of sales increased as domestic trucking rates were higher reflecting the effects of industry-wide driver shortages. The increase was partially offset by lower diesel cost

3.30-3.50 eps forecast for 2015

For the full fiscal year of 2015, we’re forecasting sales in the range of $9.21 billion to $9.45 billion based on a low-to-mid single digit increase in same-store sales and 7.2% square footage growth.

Diluted earnings per share excluding acquisition related costs are expected to range from $3.30 to $3.50. This represents an increase of 6% to 12% over 2014 earnings per diluted share, excluding acquisition related costs of $3.12.

Benefits of combing with family dollar

The Dollar Tree target customer is largely a suburban customer, while the Family Dollar customer is largely urban and rural. We’re combining complementary merchandise expertise adding the Family Dollar’s strength and name brand consumable products to the Dollar Tree variety, seasonal and discretionary product and global sourcing power.

No plans to raise wages

Well Chuck, we watch the industry trends carefully and of course we’re compliant with all the State and Federal regulations, but I’ll tell you, outside of complying with the continued changes in the regulations we’ve made no plans for a sweeping change to our minimum wage rates, but we will continue to pay competitive wages market-by-market just as we always have done based on the prevailing rates.

And as always, we’ll work very hard to offset any wage increases and cost increases and general through increased sales and productivity enhancing initiatives that we’ve always been able to find.

We’re excited about 2015

So I would tell you that if I could guess, you could read that as we’re excited about our business. I can tell you that first quarter initiatives are more excited than they’ve ever been, you’ve have heard me say that before.

Right in the sweet spot

And we’re more relevant than ever. I can’t tell you that I can have empirical data, but the win fields are a little bit to our back in the value sector right now with lower gasoline prices and lower prices and lower diesel fuel prices and there is just a lot of lowers there that tend to help us as we accelerate our momentum going into the year.

Dollar Tree 3Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Solid growth

” Comp store sales increased 5.9% in the quarter, driven by increases in both traffic and average ticket. This was on top of a 3.1% comp in the third quarter last year and marked our 27th consecutive quarter of positive comp store sales. Total sales grew 11.2% to more than $2.09 billion.”

This was a terrific quarter

“This was a terrific quarter. Total sales grew 11.2% and we exceeded $2 billion in third quarter sales for the first time in company history. Our comp store sales increase of 5.9% was our best quarterly comp since fourth quarter of 2011. Importantly, sales were the result of increases in both traffic and average ticket. Our customers are shopping more frequently and buying more on each trip.”

Guidance is so-so because of freight costs

” I know you folks like to look at these two-year stacks and things like that, and the two-year stack might suggest that we should be doing a 7 comp in the fourth quarter, which obviously would be a tall task for anybody at the end of the day. But as we look at the guidance, we expect–you know, we’re going to ring the register every time we can during the quarter, and we think we’ve got a good merchandise plan. The stores look great – hopefully you all get to have a chance to get out and get in our stores and see our holiday merchandise as we move through the season.

I think in the guidance standpoint, we still expect headwinds from freight are going to continue to be there.”

Our momentum continues into the fourth quarter

“We’re excited about fourth quarter. I’ll tell you that we’ve got terrific plans. We’ve got the best merchandise plans ever. We’re excited about it, and frankly our momentum continues in the fourth quarter. It’s just begun – you know, we’re only a couple weeks into the quarter, so hard to declare victory but I feel really good about fourth quarter. ”

It’s probably time to go back and revisit our total store potential

“t’s probably time to go back and revisit that because the world has changed. We’ve changed our stores, we’ve changed the way we go to market and we serve more customers now, and the 7,000 stores was Dollar Tree stores. Our Canadian stores now, that’s 1,000 store potential, so that brings it to 8,000 stores, and then the Deal$ stores increases that number. But it’s probably time to go back and do some work on that.”

Dollar Tree 2Q14 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

4.5% Comp

“This morning we announced Dollar Tree’s results for the second quarter 2014. Comp-store sales on a constant currency basis increased 4.5% in the quarter, driven by both increases in traffic and average ticket.”

Perishables about driving traffic

“We now offer frozen and refrigerated product in 3,410 stores, with plans to continue growing. While this category is lower margin, the product serves the needs of our customer. It’s faster turning, more frequently purchased, and the increase in shopping frequency provides the opportunity to drive sales across all categories, including higher-margin discretionary product.”

freight cost will be headwind as result of driver shortages

“we anticipate our freight cost will continue to be a meaningful headwind to gross margin, primarily as a result of driver shortages and related wage increases”

Consumer continues to be under pressure

“As you’ve likely heard from many retailers, the consumer continues to be under pressure, our sales initiatives are aimed at responding to those customers needs by being a part of the solution and their efforts to balance the household budget”

Be the solution, not the cause of your customer’s problems

“when the customers were under pressure and traffic was stubborn and everyone was complaining about it, really starting back last year and during the fourth quarter, we responded by being the solution to their problems and not part of the problem. So, we have invested in produc”

big hit that will continue is freight cost

“nd frankly, the big issue that hit second quarter and probably is going to continue to hit us in the rest of the year was the freight. As I’ve always said, when we see an issue, we’re always able to respond accordingly. And if we see cost pressures in one area, if we see it coming and we can make plans for it, we can always make allowances and find other ways to save. And we can do the same thing with our freight costs. But this freight driver shortage issue came upon everyone pretty suddenly. We’ve been expecting something, but we weren’t really seeing it until recently.”

Environment is challenging across the board

“Frankly, it’s across the board. We really don’t see anything that you could point to, that’s a stark demarcation line between the higher income and the lower income. There are always markets where in some of the lower income markets and the urban markets, it’s always been more highly consumable. But across the board, if you start looking at the higher incomes versus the middle American suburban, everybody’s looking for value and everybody likes shopping at Dollar Tree.”

Customers shop with us because they enjoy the experience

“One of the things that we always pound the table about is, it’s not just shopping at Dollar Tree, because you’re looking for something you need. People do that and it’s only $1 and it’s great value. But our customers also shop us, because they enjoy the shopping experience, it’s fun, you come in, you walk into the seasonal product, you walk into fun, colorful product, an ever-changing mix, there’s always something that you’re buying that you didn’t expect to find as a customer.”

We have to make good choices from a merchandising perspective in order to keep our $1 price point

” the pressure is not on the initial markup of product, it’s on our choices. It’s still about what we choose to sell. It’s still about understanding the value that we need to offer the customer to drive their purchase decision. At the $1 price point is not the issue at hand here. It’s really this long and stubborn pressure on the middle-income customers and especially the lowest income customers, and it’s been several years now and there is somewhat – it’s going to get better. I’m optimistic, but there’s not much light at the end of the tunnel and customers continue to look at for values.’

Invest in your customer

“We can drive higher margins, but we have chosen to instead of sitting back and resting on whatever the 11% or whatever it was operating margin the previous year. We’ve chosen to invest in the customer. We’ve chosen to invest in more value, more traffic, higher average ticket. We want our customers to think of us as, if money is short, go to Dollar Tree. If you want to have a fun shop experience, go to Dollar Tree. If you want party supplies, go to Dollar Tree. It’s all a $1. And it’s all great value. So, it’s a matter of choices, it’s not pressure on the cost from an inflationary standpoint. We can still – we’ve turned down more product than we sell”

It’s like flying an airplane

” I will tell you that we think about this as flying an airplane. It’s a little stick and a little rudder. We’re flexible. We have a flexible model. And when times are tough and we need more traffic, we’ll err a little more towards the consumer products. And when times are a little better or costs are going down sometimes, we may invest in more customers or we may invest in margin. So it really is all about the current environment and how you feel about that future environment.”

It’s going to remain tough for the rest of the year

“I think it’s going to remain tough for the rest of this year. We’re not planning on any – in the second half any macro news that says that things are going to be a lot better. So we’re planning on continued pressure, and we’re planning also on continued pressure on our gross margin from freight. It’s in our guidance, so it’s baked in there. And of course, we’re always working to offset that in other ways. But we’re in control of it.”

Tempt the customer to buy one more item

“what it’s doing is it’s tempting that customer to buy one more item which they would buy. One more item would be a big comp. But when they’re in the store, we want them to come for what are the things they need. While they’re in there, we want to sell them on trend and on style and on fashion and on Wow. Look at this, this is a great item”

The first of the month is a big day

“First of the month, there are a lot of payroll checks out there. A lot of people get paid at the first of the month, a lot of the government checks go out in the first of the month. There are a lot of things, there’s a lot more spendable income around the first of the month. And many of our customers, especially the lower income customers, wait until the first of the month because they just really don’t have the ability other times…Our entire organization is focused on the first-of-the-month sales, whether it’s the stores and the store managers, the buyers, the replenishment people, the logistics people. We all plan our business to a large degree around those first-of-the-month, especially in the basic categories.”

The first of the month is like having another season

“as I said, it’s sort of like having another season. It’s when you set Easter and you first roll it out and you put it all on the sales floor and you build the end caps and you put the signing in place. And the night before you’re walking around and you’re patting it down and looking to make sure and checking it off.”