Dollar Tree Holiday-Quarter Forecast Disappoints As Tariffs Bite
Dollar Tree Inc on Tuesday forecast holiday-quarter profit below Wall Street expectations, as the discount store operator expects a hit from US tariffs on Chinese imports.
The tariffs as part of the prolonged trade war between Washington and Beijing have been a pressure point for retailers, which source a large chunk of their merchandise from China.
The company said it expects fourth-quarter profit in the range of $1.70 to $1.80 per share, below the average analyst expectation of $2.02.
Dollar Tree also said it expects fourth-quarter merchandise margin to be pressured by higher sales of low-margin consumables and rising wages at its distribution centres.
The company forecast fourth-quarter sales in the range of $6.33 billion (€5.74 billion) to $6.44 billion (€5.84 billion), the mid-point of which is below the average analyst estimate of $6.41 billion (€5.82 billion).
Excluding items, the company earned $1.08 per share in the third quarter ended 2 November, missing estimate of $1.13.
Net sales rose 3.7% to $5.75 billion (€5.22 billion), above analysts' average estimate of $5.74 billion (€5.21 billion), according to IBES data from Refinitiv.
Same-store sales rose 2.50%, slightly falling short of the average analyst estimate of 2.54%.