Dollar Tree Stock Slides After Mixed Q4 Results, Moderate Sales Outlook

Dollar Tree Inc DLTR reported fourth-quarter FY21 sales growth of 4.6% year-on-year, to $7.08 billion, missing the consensus of $7.12 billion.
Enterprise same-store sales increased 2.5%. Same-store sales for Dollar Tree increased 3.1%. Family Dollar same-store sales increased 1.7%.
Gross profit for the quarter rose 0.7% Y/Y to $2.14 billion, and the gross margin contracted 160 basis points to 30.2%, driven by higher freight costs and recall-related markdowns.
The operating margin contracted by 190 basis points to 8.2%, and operating income for the quarter fell 15.1% to $578.8 million.
The company held $1.04 billion in cash and equivalents as of January 29, 2022.
EPS of $2.01 beat the consensus of $1.77.
The company has completed the $1.25 price point rollout to all of its U.S. Dollar Tree stores in late February 2022, more than two months ahead of schedule.
Outlook: Dollar Tree sees FY22 EPS of $7.60 - $8.00, against the consensus of $7.60. The company expects FY22 sales of $27.22 billion - $27.85 billion versus the estimate of $28.04 billion.
Dollar Tree expects Q1 EPS of $1.95 - $2.10 versus the Street view of $1.66. It sees Q1 sales of $6.63 billion - $6.78 billion, against the consensus of $6.8 billion.
The company currently has $2.5 billion remaining under its board repurchase authorization.
Price Action: DLTR shares are trading lower by 4.44% at $133.50 on the last check Wednesday.

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