Dollar Tree 2Q Sales Miss Views

Reuters

Discount retailer Dollar Tree Inc's quarterly sales rose less than analysts expected due to intense competition from retailers such as Wal-Mart Stores Inc and as it focused on closing the acquisition of Family Dollar Stores Inc.

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Dollar Tree's sales forecast for the current quarter also fell short of Wall Street's estimates, sending the company's shares down 5.3 percent in premarket trading on Tuesday.

The company's acquisition of bigger rival Family Dollar closed on July 6, when it dethroned Dollar General Corp to become No. 1 U.S. discount retailer by store count.

However, costs related to the deal pushed Dollar Tree to a loss for the second quarter ended Aug. 1. The company posted a net loss of $98 million, or 46 cents per share, compared with a profit of $121.5 million, or 59 cents per share, a year earlier.

Dollar Tree earned 70 cents per share, excluding items.

Net sales rose 48.3 percent to $3.01 billion, slightly below analysts' average estimate of $3.04 billion, according to Thomson Reuters I/B/E/S.

The company said it expects sales to more than double to between $4.78 billion and $4.87 billion in the current quarter, helped by the acquisition.

Analysts were expecting an increase to $4.91 billion.

Dollar Tree's shares fell 5.3 percent to $72.20 in premarket trading. Through Monday's close, the stock had risen about 8 percent this year. (Reporting by Subrat Patnaik in Bengaluru; Editing by Saumyadeb Chakrabarty and Savio D'Souza)