Dollar Tree holiday-quarter forecast disappoints as tariffs bite; shares fall

(Reuters) – Dollar Tree Inc (O:) on Tuesday forecast holiday-quarter profit below Wall Street expectations, as the discount store operator expects a hit from U.S. tariffs on Chinese imports, sending its shares down about 8% before the opening bell.

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 centers.

The company forecast fourth-quarter sales in the range of $6.33 billion to $6.44 billion, the mid-point of which is below the average analyst estimate of $6.41 billion.

Excluding items, the company earned $1.08 per share in the third quarter ended Nov. 2, missing estimate of $1.13.

Net sales rose 3.7% to $5.75 billion, above analysts’ average estimate of $5.74 billion, according to IBES data from Refinitiv.

Same-store sales rose 2.50%, slightly falling short of the average analyst estimate of 2.54%.

(This story has been refiled for dropped letter in headline)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.