Dollar Tree's stock drops after profit, sales fall short of expectations

Dollar Tree Inc.'s stock DLTR, +1.53%tumbled 7.8% in premarket trade Thursday, after the discount retailer reported fiscal first-quarter profit and sales that missed expectations and cuts it earnings outlook, citing unfavorable weather, rising freight costs and a calendar shift. Net income for the quarter to May 5 fell to $160.

5 million, or 67 cents a share, from $200.5 million, or 85 cents a share, in the same period a year ago. Excluding non-recurring items, such as debt refinancing costs, adjusted earnings per share came to $1.19, below the FactSet consensus of $1.23. Revenue rose 5.0% to $5.55 billion, just shy of the FactSet consensus of $5.56 billion. Same-store sales rose 1.4%, missing the FactSet consensus of 2.6% growth, as a surprise 1.1% decline in Family Dollar same-store sales, versus expectations of a 1.4% rise, offset a 4.0% increase in Dollar Tree same-store sales, which beat expectations of a 2.9% increase. The company cuts its 2018 EPS outlook to $4.80 to $5.10 from $5.25 to $5.60 and revised its revenue outlook to $22.73 billion to $23.05 billion from $22.70 billion to $23.12 billion. The stock had dropped 10.2% year to date through Wednesday, while the SPDR S&P Retail ETF XRT, +1.35%had gained 4.6% and the S&P 500 SPX, +1.27%had edged up 1.9%.