Dollar Tree's stock price fell more than 20% on Wednesday after the discount retailer missed quarterly estimates and cut its annual forecasts — another sign Consumers worried about inflation are reducing spending,
“Customers are increasing their consumption (on lower-margin essentials) while reducing their spending on discretionary items due to macro belt-tightening,” Dollar Tree CFO Jeff Davis said on a post-earnings call.
Dollar Tree shares were trading at around $65 per share — the lowest in more than four years.
Last week, Shares of rival Dollar General also fell It has fallen by about 30% after the discount retailer cut its annual sales and profit forecasts.
Dollar Tree has felt The retail sector is facing tough competition Rich as a big box chain has attracted several companies including Walmart and Target Low and middle-income group shoppers will be offered discounts on products ranging from grocery to apparel.
American consumers are also gravitating toward upstart online discount retailers such as Teemu and Shein.
Dollar Tree is in the process of restructuring its business and said in April that it was considering options, including a possible reorganization. Sale or spinoff of its Family Dollar banner.
Earlier this year, it planned to close 970 Family Dollar stores. As of Aug. 3, Dollar Tree has closed about 655 stores and will close another 45 stores during the rest of the year, the company said Wednesday.
The Chesapeake, Virginia-based company expects annual sales in the range of $30.6 billion to $30.9 billion, compared with its prior forecast of $31 billion to $32 billion.
The company expects annual adjusted earnings per share in the range of $5.20 to $5.60, compared with a prior forecast of $6.50 to $7 per share.
Dollar Tree reported net sales of $7.37 billion, while analysts had expected $7.49 billion, according to LSEG data.
with post wire
