Dollar Tree reports 2Q loss after buying Family Dollar
CHESAPEAKE, Va. (AP) — Dollar Tree reported a loss in its fiscal second quarter due to higher costs from buying rival Family Dollar. The discount retailer also posted revenue guidance for the current quarter that was below expectations and Dollar Tree’s shares fell in morning trading Tuesday.
The Chesapeake, Virginia, retailer closed its $8.5 billion deal to buy Family Dollar in July. The combined company now has more than 13,800 stores, making it the largest dollar store chain. For the current quarter ending in November, Dollar Tree said it expects revenue in the range of $4.78 billion to $4.87 billion. Analysts surveyed by Zacks had expected revenue of $4.89 billion. The company expects full-year revenue in the range of $15.3 billion to $15.52 billion.
For the second quarter, Dollar Tree reported a loss of $98 million, or 46 cents per share. Earnings, adjusted for costs related to mergers and acquisitions, were 25 cents per share, falling short of Wall Street expectations. The average estimate of 12 analysts surveyed by Zacks Investment Research was for earnings of 67 cents per share.
The discount retailer posted revenue of $3.01 billion in the period, beating Street forecasts. Seven analysts surveyed by Zacks expected $2.67 billion. Sales in stores open at least a year, a key metric of a retailer’s health, rose 2.7 percent, helped by increases in customer count and average ticket.
Shares of Dollar Tree Inc. fell $6.21, or 8.1 percent, to $70.05 in morning trading. Its shares are up 42 percent in the past 12 months as of Monday’s closing price of $76.26.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on DLTR at http://www.zacks.com/ap/DLTR
Keywords: Dollar Tree, Earnings Report