Shares of Dollar Tree Inc. DLTR took a 10.5% dive Thursday, after the discount retailer missed fiscal first-quarter profit expectations and cut its full-year outlook, as elevated shrink and a shift in buying patterns to consumables weighed on results. Net income for the quarter to April 29 dropped to $299.0 million, or $1.35 a share, from $536.4 million, or $2.37 a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of $1.47 was below the FactSet consensus of $1.52. Revenue grew 6.1% to $7.32 billion, just above the FactSet consensus of $7.28 billion. Overall same-store sales rose 4.8% to beat the 3.6% FactSet consensus, as Dollar Tree same-store sales increased 3.4% to top expectations of a 2.2% rise, and as Family Dollar same-store sales rose 6.6% to to beat expectations of 5.7%. Looking ahead, the company expects second-quarter EPS of 79 cents to 89 cents, well below the FactSet consensus for net EPS of $1.18, and cut its full-year EPS guidance range to $5.73 to $6.13 from $6.30 to $6.80. The company raised its guidance range for net sales to $30.0 billion to $30.5 billion from $29.9 billion to $30.5 billion. “While 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,” said Chief Executive Officer Rick Dreiling. The stock has gained 9.8% year to date through Wednesday while the S&P 500 SPX has tacked on 7.2%.
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