The company reported second-quarter profit and revenue that missed Wall Street expectations, sending its shares plunging almost 7.6 percent in pre-market trading Thursday.
Investors taking stock of the Q2 numbers pushed down Dollar General shares (Ticker: DG) more than 17 percent, wiping away more than $4.5 billion in market value and dropping the company's shares to where they were changing hands in March.
Dollar Tree (NASDAQ:DLTR) last announced its quarterly earnings results on Thursday, August 25th.
The company said that it had $0.72 in earnings per share (EPS) on $5.00 billion in revenue, compared to the consensus estimates from Thomson Reuters that called for $0.73 in EPS on revenue on $5.09 billion.
From February to July, Dollar Tree net sales rose 94% to $10 billion, while Dollar General posted 6.4% year-over-year (YoY) growth in net sales in the first half of the year. Chesapeake, Virginia-based Dollar Tree has more than 14,000 stores, including Family Dollar, which it bought past year.
Dollar General has been working to grow its footprint after a year ago losing out on a merger between rivals. The FactSet consensus for earnings per share was $1.09. Shares of Dollar General fell 16% to $77.40, while Dollar Tree shares declined 9.4% to $86.
Overall sales were up almost 66 percent compared with a year ago, but only a month's worth of Family Dollar's financials were considered in the 2015 quarter since the merger was completed July 6 of that year. Still, double digit returns are not unlikely going forward, and the company's performance over the last years has been convincing as well (with the share price growing by more than 100% since 2013).
Selling, general and administrative expenses were 23.1% of sales compared to 24.3% of sales in the prior year's second quarter. The consensus estimates are $0.76 in EPS on $5.13 billion in revenue.
Shares of Dollar General plunged 12% after the earning announcement missed both profit and sales forecasts. In last year's second quarter, earnings amounted to 95 cents per share, while sales were $5.1 billion. Analysts' estimates $3.79 a share on revenue of $20.97 billion.
Retailers are also grappling with a drop in grocery prices that has pressured margins in the second quarter. Slow sales, of course, has resulted in the chain having to lower net sales expectations for the year from a range of $20.79 and $21.08 billion to $20.69 and $20.87 billion.
Comparable store sales in the quarter plummeted 8%.
As of current trade, Dollar Tree, Inc.
The investment management firm now holds a total of 65,843 shares of Dollar Tree which is valued at $6,339,364.Dollar Tree makes up approximately 6.48% of Btg Pactual Global Asset Management Ltd's portfolio.