CHESAPEAKE, Va. - Dollar Tree Inc . (NASDAQ: NASDAQ:DLTR) shares fell sharply by 6.87% after the discount retailer reported fourth-quarter earnings and revenue that missed Wall Street expectations and provided a weaker-than-expected outlook for the fiscal year 2024.
The company reported adjusted earnings per share (EPS) of $2.55 for the quarter, falling short of the analyst consensus estimate of $2.66. Revenue for the quarter slightly missed expectations at $8.64 billion compared to the $8.66 billion estimate. The results included significant charges related to the company's portfolio optimization review, which identified approximately 600 Family Dollar stores for closure in the first half of fiscal 2024 and approximately 370 additional stores as their leases expire.
Despite the reported diluted loss per share of $7.85, which included a $594.4 million charge for portfolio optimization review, a $1.07 billion goodwill impairment charge, and a $950 million trade name intangible asset impairment charge, the company's adjusted EPS reflected a 25% increase from the same period last year.
For fiscal 2024, Dollar Tree anticipates net sales to range between $31.0 billion and $32.0 billion, with diluted EPS expected to be between $6.70 and $7.30. Both the sales and EPS outlooks fell below the analyst consensus estimates of $31.65 billion in sales and $7.04 in EPS.
"We finished the year strong, with fourth-quarter results reflecting positive traffic trends, market share gains, and adjusted margin improvement across both segments," said Rick Dreiling, Chairman and Chief Executive Officer. "As we look forward in 2024, we are accelerating our multi-price rollout at Dollar Tree and taking decisive action to improve profitability and unlock value at Family Dollar."
The company's financial performance was impacted by a combination of factors, including lower freight costs, sales leverage, and the impact of the 53rd week in fiscal 2023. However, these were offset by product cost inflation, unfavorable sales mix, elevated shrink, and higher distribution and markdown costs.
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