Dollar Tree has forecast that its second-quarter adjusted profit could drop by as much as 50% year over year, citing uncertainty caused by shifting tariffs under the Trump administration.
The discount retailer’s warning triggered a roughly 3% dip in premarket trading on Wednesday.
The company expects profit from continuing operations, excluding its Family Dollar segment, to fall between 45% and 50% for the quarter.
The impact from tariffs has added to cost pressures, but Dollar Tree said it anticipates a recovery in the second half of the year.
In March, Dollar Tree announced plans to sell the underperforming Family Dollar banner for $1 billion to a private equity consortium.
While this move is expected to weigh on earnings in the short term, cutting full-year EPS by 30 to 35 cents, it aims to sharpen the company’s focus on its core, higher-performing brand.
Despite near-term challenges, Dollar Tree raised its full-year adjusted earnings forecast to between $5.15 and $5.65 per share, up from a previous range of $5.00 to $5.50, citing lower freight costs and strong demand for budget-friendly staples.
It also reaffirmed its comparable store sales outlook for the year.
The company posted stronger-than-expected first-quarter results, with revenue reaching $4.64 billion, ahead of LSEG estimates of $4.54 billion.
Adjusted earnings came in at $1.26 per share, beating forecasts of $1.20.
The update came a day after competitor Dollar General raised its annual guidance, also pointing to resilient consumer demand and operational improvements.
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