Dollar Tree, Inc. (DLTR) shares took a significant dive, plummeting 10% in premarket trading, after the company released its second-quarter earnings report. The disappointing results, which missed both revenue and earnings expectations, followed a similar trend observed in Dollar General, a top competitor in the discount retail sector.
Dollar General’s CEO, Todd Vasos, expressed concerns about softer sales trends across the broader retail landscape, attributing the weakness to financially constrained core customers. The company reported earnings per share of $1.70, falling short of the analyst consensus of $1.78. Quarterly sales, at $10.21 billion, also missed the street view of $10.368 billion.
The subdued performance prompted Dollar General to revise its fiscal year 2024 outlook. The company lowered its EPS forecast from a range of $6.80 to $7.55 to a new range of $5.50 to $6.20, compared to the $7.12 estimate. Revenue projections were also scaled back from $41.01 billion to $41.28 billion to a revised range of $40.51 billion to $40.74 billion, against the $41.02 billion estimate.
Despite the challenging environment, Dollar General remains committed to its expansion plans, expecting 2,435 real estate projects in fiscal year 2024. This includes 730 new store openings, 1,620 remodels, and 85 store relocations.
In response to the changing retail and consumer landscape, Dollar General announced that it is taking decisive measures to enhance its value and convenience offerings, as well as the in-store experience for both employees and customers. The company believes these actions will solidify its position and continue its ‘Back to Basics’ progress, ultimately delivering sustainable growth and long-term shareholder value.
As for Dollar Tree, its shares are trading down 10% to $85 premarket. The stock has experienced a significant decline of over 23% in the past year, according to Benzinga Pro. The weakness in Dollar Tree’s stock price reflects investor concerns about the company’s ability to navigate the current economic climate and maintain its competitive edge in the discount retail space.
