Dollar Tree Inc. (DLTR – Free Report) posted third-quarter fiscal 2017 results, wherein both the earnings and sales topped estimates and improved year over year. Further, management raised outlook for fiscal 2017 and provided a solid view for the fiscal fourth quarter.

The company’s shares are up about 2.4% in the pre-market trading session following the better-than-expected results. Moreover, this Zacks Rank #2 (Buy) company has improved 29.5% in the last three months, outperforming the industry’s growth of 8.7%.

Quarter in Detail

The company’s quarterly adjusted earnings of $1.01 per share jumped 40.3% year over year, and surpassed the Zacks Consensus Estimate of 90 cents. Moreover, earnings exceeded the higher end of company’s guidance range of 83-90 cents per share.

Dollar Tree, Inc. Price, Consensus and EPS Surprise

Dollar Tree, Inc. Price, Consensus and EPS Surprise | Dollar Tree, Inc. Quote

Consolidated net sales advanced 6.3% to $5,316.6 million in the quarter, beating the Zacks Consensus Estimate of $5,282 million.

Comparable store sales (comps) for the quarter increased 3.2% in constant-currency, driven by improved customer count and average ticket. Including the impact of Canadian currency fluctuations, comps improved 3.3%. While Dollar Tree banner posted comps growth of 5% (in constant-currency), comps at the Family Dollar banner climbed 1.5%.

The company’s quarterly gross profit advanced 9.6% year over year to $1,666 million, with the gross margin expanding 90 basis points (bps) to 31.3%. The margin enhancement came on the back of reduced merchandise costs, lower markdowns and occupancy expenses, as a percentage of sales.

Selling, general and administrative expenses dropped 30 bps to 23.3% of sales, thanks to reduced depreciation, healthcare costs and store operating costs due to lower utility costs, as a percentage of sales. This was somewhat offset by increased hourly payroll and incentive compensation expenses as well as higher operating and corporate expenses.