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Dollar Tree’s shares sink, as CEO says ‘challenging’ economy is pressuring discounter



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Shares of Dollar Tree fell on Thursday and hit a 52-week low, after the retailer said customers’ shopping lists have largely narrowed to food and necessities.The discounter joins a growing group of retailers catering to consumers who have become more price-sensitive and selective about spending. Macy’s and Foot Locker also reported this week that sales have been hit as customers largely skip over discretionary items, as they deal with rising interest rates and juggling expenses like commuting, dining out and paying for more expensive groceries.On a call with investors, Dollar Tree CEO Rick Dreiling said customers’ shopping patterns reflect a tougher economic backdrop and a reversion to pre-pandemic spending habits.”While the challenging macro environment continues to pressure our sales mix in both segments, I am pleased with the gains in traffic, new customers, and market share,” he said.Dollar Tree, which includes its namesake banner and more grocery-focused Family Dollar, saw its stock price fall 10% — even as it beat Wall Street’s fiscal second-quarter expectations.The company raised its full-year forecast for sales, but narrowed its outlook for earnings. Dollar Tree said the guidance reflects improved sales, and attributed the tighter profit range to more low-margin purchases such as food, ongoing challenges with shrink, the term used for lost, damaged or stolen goods, and higher diesel fuel costs.Dollar Tree now expects consolidated net sales to range from $30.6 billion to $30.9 billion for the full fiscal year, and earnings per share to range from $5.78 to $6.08. It had previously forecast consolidated net sales of between $30.0 billion and $30.5 billion and diluted earnings per share of between $5.73 and $6.13. Dollar Tree’s guidance disappointed Wall Street, as the lower end of its earnings forecast fell below consensus expectations.Here’s how the company did for the three-month period that ended July 29, compared with what Wall Street expec …

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