Please ensure Javascript is enabled for purposes of website accessibility

Family Dollar Sales Growth Offsets a Weak Spring for Dollar Tree

By Demitri Kalogeropoulos – Updated May 28, 2020 at 3:50PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Easter spending dropped, but demand spiked for value-based home essentials.

Business was good for essential retailers that stayed open during maximum COVID-19 social distancing efforts. But growth wasn't guaranteed. On Thursday, Dollar Tree (DLTR 1.42%) announced mixed results that demonstrated that challenge.

Sales jumped 15.5% in its Family Dollar business, but fell 1% across Dollar Tree locations. Those trends left overall comparable-store sales gains at 7%, or well below the 22% spike that Dollar General reported for the same period.

A woman checks her phone while shopping.

Image source: Getty Images.

The difference was Dollar Tree's focus on non-staple categories like candy and decorations, especially around the key Easter holiday. Consumers abandoned regular spending patterns on those niches during April and late March. 

"The seasonal and discretionary business was materially impacted by lower Easter holiday sales," CEO Mike Witynski said in a press release. The biggest drags on the business were party supplies, candy, and Easter-related items, management said.

Family Dollar joined Dollar General in withdrawing its 2020 outlook due to unprecedented volatility around daily demand changes and the uncertain timing of the economic growth rebound. The chain did note continued positive momentum in the second quarter, though, with consumers returning to the Family Dollar locations in recent weeks to shop for crafts and merchandise related to graduation and Mother's Day celebrations.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Dollar Tree, Inc. Stock Quote
Dollar Tree, Inc.
DLTR
$137.97 (1.42%) $1.93

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
327%
 
S&P 500 Returns
105%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.