Dollar Tree slumps after fresh guidance suggests weakening sales momentum in the second half
The discount retailer topped forecasts in Q2.
Dollar Tree shares slid nearly 9% Wednesday morning, even after the retailer handily beat Q2 expectations and nudged its full-year outlook higher.
The discount retailer posted adjusted earnings per share of $0.77, nearly double Wall Street’s $0.41 forecast. Sales rang in at $4.6 billion, versus the $4.5 billion analysts were looking for. Meanwhile, same-store sales climbed 5.4%, also topping estimates.
Dollar Tree also lifted its full-year sales outlook to between $19.3 billion and $19.5 billion, up from its previous range of $18.5 billion to $19.1 billion and comfortably ahead of the Street’s $19.2 billion projection.
The real sticking point: management guided for 4% to 6% same-store sales growth this year. That’s a step down from the 5.4% gain in Q1 and the 6.5% jump in Q2, signaling momentum could cool in the second half. Investors aren’t thrilled, since it suggests the strongest growth may already be behind them.
The results come a week after rival Dollar General also crushed Q2 earnings estimates and raised its full-year guidance as inflation-squeezed shoppers spent more per trip.
Dollar Tree CEO Mike Creedon called out tariffs and inflation as headwinds but said the retailer is offsetting the squeeze with pricing tweaks, shifts in sourcing, and momentum from its Family Dollar sale.
Despite Thursday’s dip, shares are still up about 33% year to date.
