March 4, 2020 / 12:46 PM / a month ago

Dollar Tree sees weak first-quarter sales, profit on higher discounts

FILE PHOTO: A customer walks out of a Dollar Tree discount store in Austin, Texas, U.S., February 27, 2017. REUTERS/Mohammad Khursheed/File Photo GLOBAL BUSINESS WEEK AHEAD

(Reuters) - Dollar Tree Inc (DLTR.O) forecast weak first-quarter sales and profit on Wednesday, citing higher discounts and tariff pressures, sending its shares down about 2%.

The discount retailer also struggled to attract shoppers to its Family Dollar stores, which resulted in its same-store sales missed Wall Street estimates for the fourth quarter.

Chief Executive Officer Gary Philbin said the pressure from the tariffs and promotional activity will be limited to the first quarter and the company is well-positioned for the rest of the year.

It forecast net sales between $5.89 billion and $5.99 billion and low single-digit growth in same-store sales. Analysts were expecting net sales of $6.02 billion for the current quarter.

The company also forecast earnings per share between $1 and $1.09, including tariff costs, which was below the analysts’ average estimate of $1.20.

In the reported quarter, same-store sales rose 0.4%, falling short of the analysts’ average estimate of 1.71%, according to IBES data from Refinitiv.

The company reported net income of $123 million, or 52 cents per share, compared with a loss of $2.3 billion, or $9.69 per share, a year earlier, when it took a $2.7 billion writedown for its Family Dollar business.

Reporting by Nivedita Balu in Bengaluru; Editing by Arun Koyyur

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