Dollar Tree raises prices to $1.25, and it says it’s not because of inflation
The company says the higher prices will allow it to offer a wider range of merchandise
Dollar Tree is upping its standard price point to $1.25 on a permanent basis.
Dollar Tree Inc. is raising prices for good, the company announced on Tuesday, moving its price point higher by a quarter from the eponymous dollar.
The company notes that it has managed to hold prices at $1 for 35 years, including during inflationary periods. This decision comes after a testing process that began this past summer, and was introduced in September as part of a company transformation plan.
Dollar Tree DLTR, +0.15% says the customer response to the higher prices has been positive. And when Dollar Tree talked about the higher prices during its last earnings announcement in September, investors responded happily as well.
“[Customers] have also indicated they are seeing price increases across the market and that Dollar Tree is still providing the products they need at an undeniable value,” Dollar Tree said in a statement.
The company said the higher price point is a permanent move, and not the result of “short-term or transitory market conditions.” Moreover, the $1.25 price point allows the company to offer a wider range of merchandise, including items that had been discontinued at the $1 level.
Gross margins will also benefit, with the higher price point offsetting freight, operating and other costs that have gone up.
“Accordingly, we have begun rolling out the $1.25 price point at all Dollar Tree stores nationwide,” said Chief Executive Michael Witynski in a statement.
The higher prices will be in 2,000 Dollar Tree stores in December, with the rollout complete in the first fiscal quarter of 2022.
“Lifting the one-dollar constraint represents a monumental step for our organization and we are enthusiastic about the opportunity to meaningfully improve our shoppers’ experience and unlock value for our stakeholders,” Witynski said.
Dollar Tree reported that third-quarter net income totaled $216.8 million, or 96 cents per share, down from $330 million, or $1.39 per share, a year earlier and in line with the FactSet consensus.
Sales totaled $6.415 billion, up from $6.177 billion in 2020. The FactSet consensus called for sales of $6.411 billion. Enterprise same-store sales rose 1.6%, with the Dollar Tree chain up 0.6% and the Family Dollar chain rising 2.7%. The FactSet consensus was for enterprise same-store sales growth of 1.5%.
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Dollar Tree raises prices to $1.25, and it says it's not because of inflation - MarketWatch
The company says the higher prices will allow it to offer a wider range of merchandise
Dollar Tree Inc. is raising prices for good, the company announced on Tuesday, moving its price point higher by a quarter from the eponymous dollar.
The company notes that it has managed to hold prices at $1 for 35 years, including during inflationary periods. This decision comes after a testing process that began this past summer, and was introduced in September as part of a company transformation plan.
Dollar Tree DLTR, +0.15% says the customer response to the higher prices has been positive. And when Dollar Tree talked about the higher prices during its last earnings announcement in September, investors responded happily as well.
“[Customers] have also indicated they are seeing price increases across the market and that Dollar Tree is still providing the products they need at an undeniable value,” Dollar Tree said in a statement.
The company said the higher price point is a permanent move, and not the result of “short-term or transitory market conditions.” Moreover, the $1.25 price point allows the company to offer a wider range of merchandise, including items that had been discontinued at the $1 level.
Gross margins will also benefit, with the higher price point offsetting freight, operating and other costs that have gone up.
“Accordingly, we have begun rolling out the $1.25 price point at all Dollar Tree stores nationwide,” said Chief Executive Michael Witynski in a statement.
The higher prices will be in 2,000 Dollar Tree stores in December, with the rollout complete in the first fiscal quarter of 2022.
“Lifting the one-dollar constraint represents a monumental step for our organization and we are enthusiastic about the opportunity to meaningfully improve our shoppers’ experience and unlock value for our stakeholders,” Witynski said.
Dollar Tree reported that third-quarter net income totaled $216.8 million, or 96 cents per share, down from $330 million, or $1.39 per share, a year earlier and in line with the FactSet consensus.
Sales totaled $6.415 billion, up from $6.177 billion in 2020. The FactSet consensus called for sales of $6.411 billion. Enterprise same-store sales rose 1.6%, with the Dollar Tree chain up 0.6% and the Family Dollar chain rising 2.7%. The FactSet consensus was for enterprise same-store sales growth of 1.5%.
CONTINUED:
Dollar Tree raises prices to $1.25, and it says it's not because of inflation - MarketWatch
