NEW YORK (TheStreet) -- Dollar Tree (DLTR) shares were plunging hard in morning trading after the discount store missed Wall Street estimates by 2 cents and lowered guidance for the year as the tough economy continues to hammer consumers.
Dollar Tree said third-quarter net income fell 19% to $125.4 million, or 58 cents a share, from $155.4 million, or 68 cents a share, in the year-earlier quarter. Earnings per share for the third quarter of 2012 included a 17-cent gain related to the sale of the company's ownership interest in Ollie's Holdings. Excluding that, EPS rose 13.7% year over year, the Chesapeake, Va.-based company said Thursday.
Revenue rose 9.5% to $1.88 billion from the year-earlier period. Comparable-store sales rose 3.1%, Dollar Tree said.
Analysts were expecting earnings of 60 cents a share on revenue of $1.91 billion, according to Yahoo! Finance.
"I am pleased with our performance in the third quarter," CEO Bob Sasser said in the earnings release. "During a very cautious consumer environment, comparable-store sales increased as the result of growth in both consumer basics and growth in seasonal and variety merchandise, with our higher margin variety categories growing at a faster pace. Our comparable-store sales increase was driven principally by increased customer traffic, as new customers are finding Dollar Tree to be part of their solution to balance their household budgets. Our stores executed a quick transition from Halloween and are set with fresh, high-value merchandise for Thanksgiving and the Holiday season."
Dollar Tree's comp sales seemingly are better than some of the big-box discount retailers, like Wal-Mart (WMT), posting U.S. comp declines of 0.3%. Target (TGT) said Thursday that sales comps were just 0.9% in the quarter. Still the tough consumer environment is pressuring even stores like Dollar Tree.