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Dollar Tree Stock Slips On Q3 Earnings, Sees Price Midpoint of $1.25 in Early 2022

Dollar Tree said its planned price increases will mean a midpoint of $1.25 on all items by early 2022 following third quarter earnings that matched Street forecasts.

Dollar Tree  (DLTR) - Get Dollar Tree, Inc. Report posted third quarter earnings Tuesday that were largely in-line with Street forecasts, noting it plans to rollout price increases that will take its midpoint to $1.25 early next year. 

Dollar Tree said diluted earnings for the three months ending on October 31 came in at 96 per share, down 31% from the same period last year and largely in-line with the Street consensus forecast. Group revenues, Dollar Tree said, rose 3.9% to $6.42 billion, again matching analysts' estimates of a $6.41 billion tally. Same-store sales were up 1.6%, Dollar Tree said.

Looking into the second half of the year, Dollar Tree said it sees earnings in the region of $5.48 to $5.58 per share, compared to its prior forecast of $5.40 to $5.60 per share, with revenues of between $26.25 and $26.41 billion.

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“We experienced a strong finish to the quarter, as shoppers are increasingly focused on value in this inflationary environment,” said CEO Michael Witynski. “Our Dollar Tree pricing tests have demonstrated broad consumer acceptance of the new price point and excitement about the additional offerings and extreme value we will be able to provide. Accordingly, we have begun rolling out the $1.25 price point at all Dollar Tree stores nationwide."  

"I am very proud of our team’s efforts – especially those in our stores and distribution centers – to serve our customers by delivering incredible value on everyday products,” he added.  

Dollar Tree shares were marked 4.25% higher in early Tuesday trading following the earnings release to change hands at $139 each.

Dollar Tree unveiled plans in late September to test the sale of merchandise priced at $3 and $5, alongside its traditional $1 offerings, in 500 so-called "Dollar Tree Plus" stores by the end of the year, with another 1,500 planned for fiscal 2022.

The group also boosted its share buyback program by $1.05 billion as part of what it called a "disciplined capital allocation strategy that balances returning capital to our shareholders and investing in our business for growth."