By Ananya Mariam Rajesh
(Reuters) -Dollar Tree Inc on Wednesday missed Wall Street expectations for quarterly sales and flagged insipid annual sales, in another sign of rising inflation and declining stimulus hitting shoppers’ pockets.
Like other retailers, discount stores, traditionally known for their wide array of $1 products, have been raising prices and focusing on more expensive products such as clothes and home decor to deal with shrinking margins.
Chesapeake, Virginia-based Dollar Tree said last quarter it will start selling most products for $1.25.
That price conversion at its U.S. stores was completed two months ahead of schedule, the company said on Wednesday.
Though this enabled the company to forecast strong profits for the year, demand has slowed as consumers’ purses tighten.
The discount store operator forecast full-year sales between $27.22 billion and $27.85 billion, below analysts’ average estimate of $28.04 billion, according to IBES data from Refinitiv.
For the reported quarter, sales came in at $7.08 billion, compared with the average analyst estimate of $7.12 billion. The company’s earnings of $2.01 per share, excluding items, topped estimates of $1.77.
Shares of Dollar Tree were down about 3% at $135.93 in pre-market trading on Wednesday.
America’s other biggest discount store, Dollar General Corp, has cut its annual forecast for both sales and profit.It will report its fourth-quarter earnings on March 17.
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Shinjini Ganguli and Andrew Cawthorne)
