Dollar Tree (DLTR) earnings Q1 2023

Shares of Dollar Tree plunged nearly 15% in Thursday’s early trading after the company fell short of Wall Street earnings expectations for the most recent quarter and cut its full-year earnings outlook.

Here’s how the discounter fared in its fiscal first quarter compared to what Wall Street expected, based on an analyst survey by Refinitiv:

  • Profit per share: $1.47, adjusted, versus $1.52 expected
  • Gain: $7.32 billion versus $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 to $536.4 million, or $2.37 per share, a year earlier. On an adjusted basis, the company reported earnings of $1.47 per share, which was lower than Wall Street’s forecasts.

Sales rose to $7.32 billion from $6.9 billion a year earlier.

Same-store sales rose 4.8% compared to an expected 3.6% increase, according to Street Account estimates.

After the disappointing quarter, Dollar Tree lowered its full-year earnings outlook to a range of $5.73 to $6.13 per share, down from an earlier range of $6.30 to $6.80 per share. Analysts polled by Refinitiv had expected full-year earnings of $6.68 per share.

The lower outlook was attributed to increased shrink, or items being damaged, lost or stolen, and a shift in the product mix toward consumables, which have lower margins, Dollar Tree CEO Rick Dreiling said in a press release.

“While we are seeing the first results of our initiatives, we are not immune to the external pressures affecting the entire retail sector,” said Dreiling.

“While we maintain our full year 2023 sales outlook, we are adjusting our EPS outlook as we expect increased shrink and unfavorable sales mix to continue through the remainder of the year. We still expect earnings to back up more this year. will end its year as the benefits of lower ocean freight rates flow through.”

The company largely maintained its full-year sales forecast, but projected net sales in the tighter range of $30 billion to $30.5 billion. It forecasts comparable store sales by low to mid-single digits.

For the second quarter, the company expects earnings per share of 79 cents to 89 cents in the second quarter, versus Refinitiv’s consensus estimates of $1.22.

Leave a comment