NEW YORK (TheStreet) -- Dollar Tree's (DLTR) earnings fell short of Wall Street estimates on Thursday, sending the stock down in early morning trading. However, the stock rapidly recovered, and was up 2.9% to $78.45 at around 1 p.m. The dollar store chain is awaiting regulatory approval on its deal to buy Family Dollar (FDO) stores.
The retailer plans to sell around 330 Family Dollar stores in order to get the green light from the Federal Trade Commission for its $8.5 billion takeover plan. Dollar Tree, headquartered in Chesapeake, Va., posted earnings of $0.71 per share, coming in below analysts estimates of $0.74 per share. The company reported EPS of $0.67 in the same period last year. First-quarter revenue was up on last year's numbers at $2.18 billion but also missed Wall Street predictions of $2.20 billion.
The combination of Dollar Tree and Family Dollar, which is headquartered in Matthews, N.C., would create the largest dollar store company in the U.S., with over 13,000 stores.
Dollar Tree blamed the strong U.S. dollar and port disruption for its profit miss. The company also posted a weaker-than-expected outlook report for the rest of the year. The company is now expecting adjusted earnings of between $3.32 per share and $3.47 per share. The cut-price chain had previously forecast profits of between $3.30 per share and $3.50 per share, while Wall Street analysts predicted $3.51 per share.
The company's income has risen around 14% over the last year, and sales were up 8.8% for the quarter. Revenue has also seen a rise over the last two quarters. CEO Bob Sasser stated in a press release that "comparable store sales grew as the result of increases in both traffic and average tickets." He acknowledged the recent challenges faced by the company and added that "Customers are shopping with us more often and they are buying more on each visit."