Dollar Tree stock dives 10% on trimmed profit forecast
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Dollar Tree (NASDAQ:DLTR) shares dove about 10% after falling short of profit expectations for Q1 and cutting full year expectations as retail theft and macro pressures hit the bottom line
For the first quarter, the company notched $1.47 in earnings per share, short of the $1.54 expectation. Revenue also rose about 6.2% to $7.33B, narrowly edging expectations as Family Dollar same-store sales gained sharply. Gross profit margin for the first quarter came in at 30.5%, which was 110 basis points below the Street consensus.
âFamily Dollar continued its sales momentum with a 6.6% same-store sales increase. Importantly, both segments experienced a mid-single digit percent step-up in comp traffic. We are clearly gaining market share across the entire enterprise,â CEO Rick Dreiling said. âWhile we are seeing early results from our initiatives, we are not immune to the external pressures affecting all of retail, notably, the margin impact of elevated shrink and the product mix shift to consumables. While we are maintaining our full-year 2023 sales outlook, we are adjusting our EPS outlook as we expect the elevated shrink and unfavorable sales mix to persist through the balance of the year.â
He said that a rebound is due to be delayed until the latter half of 2023 given the expectation that âbenefits of lower ocean freight rates flow throughâ toward the close of the year. 
The company said that consolidated net sales are projected to be in the range of $7B to $7.2B against a consensus of $7.15B for the second quarter. Meanwhile, EPS for the quarter are expected to range from $0.79 to $0.89, well short of the $1.23 analyst consensus.
The company also updated full-year forecasts, with net sales now expected to range from a prior $30B to $30.5B, tightened from a prior guide of between $29.9B and $30.5B and in-line with the consensus of $30.31B. However, management slashed EPS forecasts to a range of $5.73 to $6.13, from a prior guide of $6.30 to $6.80. The updated guidance comes in well short of the $6.63 consensus estimate.
Shares of Dollar Tree (DLTR) dipped 10.21% shortly after the earnings announcement.
More on retail earnings and theft issues:
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