Dollar Tree Eyes Lower-Half Of FY22 EPS Forecast Reflecting Inflationary Cost Pressures

Dollar Tree Inc DLTR reported third-quarter FY22 sales growth of 8.1% year-on-year to $6.94 billion, beating the consensus of $6.84 billion.
Same-store sales increased 8.6% for the Dollar Tree segment, 4.1% for Family Dollar, and 6.5% for Enterprise.
Gross profit for the quarter rose 17.5% Y/Y to $2.07 billion, and the gross margin expanded 240 basis points to 29.9%.
Operating margin expanded by 70 basis points to 5.5%, and operating income for the quarter rose 22.8% to $381.3 million.
The company held $506.9 million in cash and equivalents as of October 29, 2022.
EPS of $1.20 beat the consensus of $1.18.
DLTR had $1.85 billion remaining under its share repurchase authorization as of October 29, 2022.
"Our third quarter sales performance reflects the timely execution of merchandising initiatives to drive our consumables business in this uncertain and inflationary environment," said CEO Mike Witynski.
Outlook: Dollar Tree sees FY22 EPS in the lower half of the previously expected $7.10 - $7.40 range, against the consensus of $7.32.
The company said it continues to experience inflationary cost pressures.
Meanwhile, the company raised FY22 sales guidance from $27.85 billion - $28.10 billion to $28.14 billion - $28.28 billion versus the consensus of $28.08 billion.
Dollar Tree sees Q4 sales of $7.54 billion - $7.68 billion versus the Street view of $7.52 billion.
Related: Dollar Tree Shares Are Sliding: What's Going On?
Price Action: DLTR shares are trading lower by 9.7% at $149.21 on the last check Tuesday.

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