In pre-market trading on Wednesday, Dollar Tree (NASDAQ: DLTR) shares took a significant hit following the release of its fiscal Q4 results.
Pre-Market Plummet
DLTR experienced a notable 14% decline in pre-market trade, reflecting investor reaction to the company’s latest financial performance.
Dollar Tree Q4 Earnings Disappoint
The discount store chain reported Q4 earnings per share (EPS) of $2.55, falling short of analyst expectations, which had pegged EPS at $2.66. Additionally, revenue for the quarter came in slightly below forecasts, totaling $8.64 billion compared to the anticipated $8.66 billion.
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Margin Improvement
Despite the earnings miss, Dollar Tree did show improvement in its gross profit margin, which rose to 32.1% from the previous year’s 30.9%. This figure aligned with consensus estimates.
Fiscal Year 2024 Outlook
Looking forward, Dollar Tree provided guidance for fiscal year 2024, expecting diluted EPS in the range of $6.70 to $7.30. This forecast fell short of the analyst consensus of $7.04. The company also set its net sales outlook between $31.0 billion and $32.0 billion, slightly lower than the estimated $31.65 billion.
Store Closure Strategy
In a strategic move to revitalize its business segment, Dollar Tree announced plans to shutter 970 Family Dollar stores.
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Executive Commentary
Rick Dreiling, Chairman, and Chief Executive Officer of Dollar Tree, commented on the results, stating, “We finished the year strong, with fourth-quarter results reflecting positive traffic trends, market share gains, and adjusted margin improvement across both segments. As we look forward in 2024, we are accelerating our multi-price rollout at Dollar Tree and taking decisive action to improve profitability and unlock value at Family Dollar.”