Shares of Dollar Tree fell nearly 15% in early trading Thursday after the company fell short of Wall Street’s revenue expectations in the latest quarter and cut its profit outlook for the full year.
Here’s how to do the discount First quarter of the financial year Compared to what Wall Street expected, according to Refinitiv’s survey of analysts:
- Stock Gains: $1.47, adjusted, vs. $1.52 expected
- Revenue: $7.32 billion and $7.28 billion expected
The company’s net income for the three months ended April 29 was $299 million, or $1.35 a share, compared with $536.4 million, or $2.37 a share, a year earlier. On an adjusted basis, the company reported earnings of $1.47 per share, which fell below Wall Street estimates.
Sales rose to $7.32 billion from $6.9 billion a year earlier.
Same-store sales rose 4.8%, compared with an expected 3.6% rise, according to Street Account estimates.
Following the disappointing quarter, Dollar Tree cut its full-year profit outlook to $5.73 to $6.13 per share, down from a range of $6.30 to $6.80 per share. Analysts polled by Refinitiv had expected full-year earnings of $6.68 per share.
The lower outlook is attributed to higher shrinkage or damaged, lost or stolen items and a shift in product mix to consumables with lower margins, Dollar Tree CEO Rick Dreiling said in a news release.
“While we’re seeing early results from our initiatives, we’re not immune to external pressures affecting all retail,” Dreiling said.
“While we maintain our full-year 2023 sales outlook, we are adjusting our EPS outlook as we expect the elevated shrinkage and unfavorable sales mix to continue through the balance of the year. We expect earnings to be even higher when loaded. The benefits of lower ocean freight rates flow. ”
The company largely maintained its full-year sales forecast, however, with net sales in the tight $30 billion to $30.5 billion range. Its forecast is low to mid-single digit comparable store sales.
For the second quarter, the company expects second-quarter earnings of 79 cents to 89 cents per share and Refinitiv consensus estimates of $1.22.