Dollar Tree (DLTR) slumps after cutting full-year profit expectations

May 25, 2023 8:02 AM EDT
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Price: $130.65 +0.31%

Financial Fact:
Net income: 171.6M

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Dollar Tree (NASDAQ: DLTR) shares plunged more than 11% premarket after missing first-quarter earnings estimates and guidance expectations.

The discount retailer posted earnings of $1.47 per share, $0.05 worse than the analyst estimate of $1.52. However, revenue for the quarter came in above estimates at $7.32 billion versus the consensus estimate of $7.28 billion.

The company said that it has been impacted by external pressures affecting all of retail, "notably, the margin impact of elevated shrink and the product mix shift to consumables."

Same-store sales at Dollar Tree increased by 3.4%, while the company's Family Dollar stores posted a same-store sales rise of 6.6% and Enterprise grew 4.8%.

Dollar Tree adjusted its EPS outlook as the company expects elevated shrink and unfavorable sales mix to persist through the balance of the year.

EPS for FY24 is now seen between $5.73 and $6.13, versus the consensus of $6.68. That is also lower than its prior outlook of between $6.30 and $6.80. In addition, revenue for the period is expected from $30 billion to $30.5 billion, versus the consensus of $30.4 billion.

Meanwhile, Q2 EPS is seen between $0.79 and $0.89, versus the consensus of $1.22, with revenue expected to be between $7 billion and $7.2 billion, versus the consensus of $7.15 billion.

"We still expect earnings to be more back-end loaded this year as the benefits of lower ocean freight rates flow through," said Rick Dreiling, DLTR's Chairman and Chief Executive Officer

By Sam Boughedda

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