Written by Michelle Jones

Dollar Tree (DLTR) released its third quarter earnings report before opening bell this morning, posting adjusted earnings of 38 cents per share, cash earnings of $1.33 per share and revenue of $4.95 billion. Analysts had been expecting earnings of 53 cents per share and $4.84 billion in revenue.

Dollar Tree DLTR

Dollar Tree’s results boosted by Family Dollar acquisition

Reported earnings were 35 cents per share, a 45.3% decrease year over year. EBITDA rose to $391.8 million from $269.5 million, while adjusted EBITDA increased to $442 million from Q$283.8 million.

Dollar Tree reported a 2.1% increase in same store sales, marking the 31st quarter in a row in which same store sales increased. Also this year’s same store sales increase was up against a difficult comparable of a 5.9% same store sales increase last year. Dollar Tree added that same store sales at Family Dollar saw growth in the low to mid-single digits in same store sales in each month during the third quarter. Family Dollar’s growth was no included in Dollar Tree’s 2.1% increase in same store sales.

Dollar Tree saw a 136% increase in consolidated net sales as Family Dollar contributed $2.68 billion in sales. Gross profits climbed 93% year over year to $1.4 billion, mainly due to Family Dollar’s $627.8 million in gross profits. Higher sales at Dollar Tree also contributed to the increase.

Dollar Tree’s guidance disappoints

For the fourth quarter, Dollar Tree expects net sales to be between $5.32 billion and $5.42 billion with an increase in same store sales in the low single digit percentages. For the full 216 fiscal year, the discount retailer expects net sales to be between $15.45 billion and $15.55 billion with an increase in the low single digit percentages in same store sales.

The retail chain expects net income to be between $213.2 million and $242.2 million and adjusted earnings to be between $2.32 and $2.51 per share for the fourth quarter.