Dollar Tree Misses Expectations for Q3 Earnings: Revenue Growth Slows

Revenue growth slowed to 6.3% in Q3

Dollar Tree, Inc. (NASDAQ: DLTR), a leading operator of discount variety stores, reported its financial results for the third quarter ended October 29, 2022. The company missed analysts' expectations for both revenue and earnings per share.

Key Financial Highlights:

• Revenue: $6.96 billion, an increase of 6.3% year-over-year, compared to analysts' expectations of $7.10 billion.
• Net Income: $308.2 million, a decrease of 17.9% year-over-year.
• Earnings per Share: $1.23, a decrease of 18.8% year-over-year, compared to analysts' expectations of $1.30.

Comparable Store Sales Growth:

• Dollar Tree: 3.5%
• Family Dollar: 4.5%

Segment Performance:

Dollar Tree:

• Revenue: $3.69 billion, an increase of 2.7% year-over-year.
• Comparable store sales growth: 3.5%.
• Gross margin: 31.8%, a decrease of 110 basis points year-over-year.

Family Dollar:

• Revenue: $3.27 billion, an increase of 10.7% year-over-year.
• Comparable store sales growth: 4.5%.
• Gross margin: 33.7%, a decrease of 50 basis points year-over-year.

Management Commentary:

"We are disappointed with our third quarter results, which fell short of our expectations," said Michael Witynski, President and CEO of Dollar Tree. "We faced a number of challenges during the quarter, including inflationary pressures, supply chain disruptions, and labor shortages."

Outlook:

Dollar Tree provided the following guidance for the fourth quarter:

• Revenue: $7.30 billion to $7.50 billion
• Comparable store sales growth: 3.0% to 5.0%
• Earnings per share: $1.70 to $1.90

Analysts' Reactions:

Analysts were mixed in their reactions to Dollar Tree's earnings report. Some analysts believe that the company's challenges are temporary and that it will be able to recover in the long term. Others are more cautious, citing the company's continued struggles with inflation and supply chain issues.

Conclusion:

Dollar Tree's third quarter earnings report was a disappointment for investors. The company's revenue growth slowed and its earnings per share declined significantly. The company faces a number of challenges, but it remains to be seen whether it will be able to overcome these challenges and return to growth in the future.

Additional Tables:

Table 1: Dollar Tree and Family Dollar Revenue Growth

Table 2: Dollar Tree and Family Dollar Comparable Store Sales Growth

Table 3: Dollar Tree and Family Dollar Gross Margin

Table 4: Dollar Tree Fourth Quarter Guidance