Dollar Tree shares plunged nearly 15% in early trading Thursday after the company fell short of Wall Street earnings expectations for the latest quarter and cut its earnings outlook for the entire year.
Here’s how the discounter fared in its first fiscal quarter compared to what Wall Street expected, based on a Refinitiv analyst survey:
- Earnings per share: $1.47, adjusted, vs. $1.52 forecast
- Income: $7.32 billion vs $7.28 billion expected
The company’s reported net income for the three-month period ended April 29 was $299 million, or $1.35 per share, compared with $536.4 million, or $2.37 per share. action, a year earlier. On an adjusted basis, the company reported earnings of $1.47 per share, below Wall Street projections.
Sales reached $7.32 billion, up from $6.9 billion a year earlier.
Same-store sales rose 4.8% from an expected 3.6% rise, according to Street Account estimates.
After a disappointing quarter, Dollar Tree lowered its full-year earnings outlook to a range of $5.73-$6.13 per share from a previous range of $6.30-6.80 $ per share. Analysts polled by Refinitiv had expected full-year earnings of $6.68 per share.
The lower outlook was attributed to shrinkage or damaged, lost or stolen items, and a shift in product mix to consumables, which generate lower margins, said Dollar Tree CEO Rick Dreiling, in a press release.
“While we are seeing early results from our initiatives, we are not immune to external pressures that affect the entire retail business,” Dreiling said.
“While we maintain our full-year 2023 sales outlook, we are adjusting our EPS outlook as we expect the elevated contraction and unfavorable sales mix to persist throughout the year. We still expect earnings will be more loaded on the back-end this year as the benefits of lower ocean freight rates trickle in.
The company, however, largely stuck to its full-year sales guidance, projecting net sales in the tight range of $30 billion to $30.5 billion. Its comparable store sales forecast at a low to mid-digit.
For the second quarter, the company expects earnings per share of 79 cents to 89 cents in the second quarter against Refinitiv consensus estimates of $1.22.