Dollar Tree Shares Slump On Q2 Sales Miss, Weak EPS Outlook

Dollar Tree Inc DLTR reported second-quarter FY21 sales growth of 1% year-on-year, to $6.34 billion, missing the analyst consensus of $6.44 billion.
Enterprise same-store sales decreased 1.2% on a constant currency basis and increased 6.0% on a two-year stacked basis.
Dollar Tree segment revenue rose 2.8% Y/Y, and Family Dollar fell 0.8%.
The gross margin for the quarter declined 110 basis points Y/Y to 29.4%.
The operating margin expanded 30 basis points to 6.3%, and operating income for the quarter rose 7.3% to $402.2 million.
The company held $720.8 million in cash and equivalents as of July 31, 2021.
Net cash provided by operating activities for the six months totaled $736.1 million.
EPS of $1.23 beat the analyst consensus of $1.01.
Outlook: Dollar Tree sees Q3 sales of $6.40 billion - $6.52 billion versus the consensus of $6.43 billion.
The company expects Q3 EPS of $0.88 - $0.98 versus the consensus of $1.26.
Dollar Tree expects FY21 sales of $26.19 billion - $26.44 billion, versus the consensus of $26.40 billion.
The company sees FY21 EPS of $5.40 - $5.60 (prior $5.80 - $6.05) versus the consensus of $5.99.
Freight costs for FY21 are now expected to be $1.50 - $1.60 per share higher FY20.
Price Action: DLTR shares are trading lower by 11.96% at $93.60 on the last check Thursday.

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