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Dollar Tree (DLTR) Investors Fear Company Could Whither

August 16, 2012 9:10 AM EDT Send to a Friend
Shares of Dollar Tree, Inc. (NASDAQ: DLTR) are trading lower on Thursday following the release of the company's second quarter financial results. Dollar Tree reported revenue of $1.7 billion compared to revenue of $1.54 billion for the same period last year. Analysts were calling for revenue of $1.71 billion. Earnings were $0.51 per share, 4 cents above Wall Street estimates.

Comps increased 4.5 percent for the second quarter of 2012. In 2011, Dollar Tree reported comps of 4.7 percent.

"I am pleased with our second quarter performance," President and CEO Bob Sasser said. "Dollar Tree continues to deliver consistently strong sales and earnings. I am particularly proud of the increases in operating margin and inventory turns."

Looking ahead, the company sees third quarter EPS of $0.47-0.51, versus the consensus of $0.52, and revenue of $1.71-1.75 billion, versus the consensus of $1.77 billion.

For the year, the company sees EPS of $2.45-2.52, versus the consensus of $2.48, and revenue of $7.36-7.45 billion, versus the consensus of $7.47 billion.

After hitting new highs early this year, shares of Dollar Tree rolled over mid-June, and they now appear to be accelerating to the downside. It remains to be seen if the recent bearish sentiment in Dollar Tree is temporary or if it is here to stay. This is one to watch in the next few quarters, as investors will be curious to know if the dollar-store bonanza is here to stay or if customers are moving up the retail store ladder.




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