Dollar Tree sinks on tariff warning despite handily topping Q1 earnings estimates
The discount retailer warned of a profit hit for the current quarter as tariffs take effect.
Dollar Tree shares sank 9% Wednesday morning, leading S&P 500 decliners, after the discount retailer topped Q1 estimates but warned tariff volatility could affect profits.
Adjusted earnings per share came in at $1.26, beating FactSet estimates of $1.21 and the company’s original guidance of $1.10 to $1.25. Revenue hit $4.6 billion, also above expectations and the high end of its forecast range. Comps and net sales were both lifted by a strong Valentine’s Day and Easter.
Execs on the earnings call said the chain added 2.6 million new shoppers during the quarter and saw a 9% jump in customers who visited the store at least three times a month. The gains came as the chain attracted a broader demographic of shoppers and saw strong demand for grab-and-go items like candy, snacks, and drinks, as well as other key discretionary categories.
Still, the stock dipped after Dollar Tree warned EPS could drop by as much as 50% for the current quarter, partly because of rising tariff-related costs. The chain reaffirmed its full-year sales outlook of $18.5 billion to $19.1 billion.
Share of rival Dollar General also fell after the report, though the company’s stock had gotten a big boost on Tuesday from posting a blowout quarter of its own.
