Dollar Tree Sees Stock Decline

Dollar Tree (NASDAQ:DLTR) saw its shares slide more than 8% in premarket trading Wednesday after reporting worse-than-expected results for fiscal Q2 2024 and issuing disappointing guidance.

Q2 Earnings Results

The discount variety store operator posted Q2 earnings per share (EPS) of $0.67, missing the consensus estimate of $1.06. Revenue came in at $7.37 billion, also below the consensus estimate of $7.5 billion.

Comparable Sales Performance

• Enterprise comparable sales grew by 0.7%, significantly lower than last year’s 6.9% growth and below the estimated 1.45%.
• Family Dollar comparable sales declined by 0.1%, compared to the estimated drop of 0.21%.
• The Dollar Tree segment saw a 1.3% increase in comparable sales, down from last year’s 7.8% growth and below analysts’ estimate of 2.89%.

Profit Margins

Gross profit margin improved to 30% during the quarter, up from 29.2% a year ago and just ahead of the 29.9% estimated by analysts.

Fiscal 2025 Guidance

For the full fiscal 2025, Dollar Tree projects EPS in the range of $5.20 to $5.60, well below the consensus estimate of $6.55. Revenue is anticipated to range between $30.6 billion and $30.9 billion, also short of the forecasted $31.19 billion.

CEO Remarks

“We are encouraged by the continuous progress we are making in the transformation underway at Dollar Tree and Family Dollar, despite immense pressures from a challenging macro environment,” said Rick Dreiling, Chairman and CEO.

“Customers are responding favorably to initiatives like our expanded multi-price offering, and we are already seeing a meaningful sales lift at the 1,600 Dollar Tree stores that have been converted to our newest in-line multi-price format.”

“With thousands of stores left to convert, we believe we are still in the very early innings of this rollout, with many years of runway left ahead of us.”