Dollar Tree’s earnings in its most recently completed quarter missed analysts’ expectations and sent the company’s share price sliding 14 percent.
The chain, with more than 16,000 stores in 48 U.S. states and five Canadian provinces, reported net income of $299 million for the quarter, compared to $536.4 million a year earlier.
Reported earnings of $1.47 a share fell short of analysts’ projections.
At the same time, sales rose to $7.32 billion from $6.9 billion the quarter before. Sales at existing stores moved up 4.8 percent, while analysts had expected only a 3.6-percent bump.
The company tightened its guidance on gross sales in the current year, predicting $30 billion to $30.5 billion, and projected earnings of $.79 to $.89 a share.
The chain has also increased most prices from its signature $1 to $1.25.
“With competition from the expansion of other dollar store rivals and the growth of players like [discount grocer] Aldi, it is imperative that [the company] offer a reasonable experience,” analyst Neil Saunders at GlobalData told Bloomberg.
Dollar Tree’s financial performance suffered because consumers are paring back spending to essential items, which carry slimmer margins at the company’s stores, Bloomberg noted.
Dollar Tree also owns the chain of Family Dollar discount stores.
TRENDPOST: Dollar stores seeing dollar volume of sales rise while corporate earnings are down is another indication that consumers are spending more money to buy less stuff, even at rock-bottom discount stores.