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Dollar Tree Stock Slumps After Cutting Full-Year Profit Outlook

Dollar Tree notes 'well-publicized challenges in the global supply chain, as well as higher freight costs and other inflationary pressures' as it cut its full-year profit forecast.

Dollar Tree Inc.  (DLTR) - Get Dollar Tree, Inc. Report posted stronger-than-expected fourth-quarter earnings Thursday, but lowered its full year profit forecast as it flagged "well-publicized challenges in the global supply chain" and higher shipping costs. 

Dollar Tree said diluted earnings for the three months ending on July 31 came in at $1.23 per share, up 11.8% from the same period last year and well ahead of the Street consensus forecast of $1.00. Group revenues, Dollar Tree said, edged 1% higher to $6.34 billion, but fell just shy of analysts' estimates of a $6.44 billion tally.

Looking into the second half of the year, Dollar Tree said it sees earnings in the region of $5.40 to $5.60 per share, down from its prior forecast of $5.80 to $6.05 per share, with revenues of between $26.2 and $26.44 billion.

“I am proud of our team’s continuing efforts, especially in our stores and distribution centers, to adapt and react in this dynamic environment to serve customers and deliver improvements in both operating margin and earnings,” said CEO Michael Witynski, President and Chief Executive Officer. “We continued to see strong performance on the discretionary side of the business, and our key initiatives, including H2, Dollar Tree Plus and the new Combo Stores, are delivering compelling results. All three concepts have performed very well and we are significantly accelerating these initiatives in 2022 and beyond.”

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“Regarding the continuing and well-publicized challenges in the global supply chain, as well as higher freight costs and other inflationary pressures, our teams are working hard to navigate these issues while staying focused, as always, on delivering the value and convenience our shoppers expect,” he added.

Dollar Tree shares were marked 10% lower in early trading immediately following the earnings release to change hands at $95.54 each, a move that would extend the stock's year-to-date decline to around 12.2%.