Dollar Tree Hits 52-Week Lows on Soft Results, Guidance

Dollar Tree (DLTR:US) stock fell more than 10% on Thursday after the retailer reported weaker-than-expected profit forecast for the ongoing quarter. Shares hit fresh 52-week lows after shedding more than $3 billion of market cap.

Earnings per share (EPS) are expected to be in the range of $0.94 to $1.04 on net sales of $7.4 billion. Analysts were looking for adjusted EPS of $1.29 on sales of $7.3 billion.

Adjusted EPS for the second quarter was $0.91, above the projected $0.87. Net sales rose 8.2% year-over-year to $7.32 billion, again ahead of the projected $7.21 billion.

Gross profit margin was 29.2%, down from 31.4% YoY and slightly lower than the estimated 29.7%. The total location count increased by 1.5% YoY to 16,476, with Dollar Tree locations up 0.9% and Family Dollar locations up 2.1%.

The company has adjusted its fiscal 2023 EPS outlook range to $5.78 to $6.08 on sales of $30.6 to $30.9 billion. Analyst consensus for FY earnings stood at $6.03 on revenue of $30.4 billion.

“In the second quarter we continued to generate strong top-line results across both segments. While factors like sales mix and elevated shrink continue to pressure margins, we generated a year-over-year increase in gross profit dollars. We are pleased with the progress of our transformation to date and remain confident in our ability to deliver our growth objective of $10 or more of diluted EPS by 2026,” stated Jeff Davis, Chief Financial Officer.

Earlier this month, Congressman Daniel Goldman disclosed he sold $15,000 - $50,000 worth of DLTR shares on July 12, when the stock closed at $147.67.

 Shares are seen trading below $130 apiece on Thursday.