(By Balaseshan) Dollar Tree Inc. (NASDAQ:DLTR) shares retreated 6% in premarket on Thursday after the operator of discount variety stores forecast third-quarter earnings and revenue below market expectations.
Earnings for the second quarter were $119.2 million or $0.52 per share, up from $94.9 million or $0.39 per share last year.
Sales grew 10.5% to $1.70 billion. Comparable store sales increased 4.5% for the latest quarter.
Analysts, on average, polled by Thomson Reuters had expected a profit of $0.47 per share on revenue of $1.71 billion for the second quarter.
Operating margin increased 80 basis points for the quarter to 10.8%.
During the second quarter, Dollar Tree opened 77 stores, expanded or relocated 21 stores, and closed 5 stores. Retail selling square footage increased 7.1% to 39.2 million square feet.
Looking ahead into the third quarter, the company expects earnings of $0.47 to $0.51 per share and sales of $1.71 billion to $1.75 billion, while Street analysts predict profit of $0.52 per share on revenue of $1.77 billion. The forecast also assumes low-to-mid single digit positive comparable store sales.
For the full year, the company now expects earnings of $2.45 to $2.54 per share and sales of $7.36 billion to $7.45 billion, while Street analysts predict profit of $2.48 per share on revenue of $7.47 billion. The forecast also assumes low-to-mid single digit positive comparable store sales.
Previously, the company had guided profit of $4.74 to $4.94 per share and sales of $7.33 billion to $7.46 billion for the fiscal 2012.
In addition, 2012 will include a 53rd week that will be recorded in the fourth quarter 2012. The extra week is expected to add $120 million to $130 million to sales in the fourth quarter 2012 and $0.07 to $0.08 earnings per share, both of which are included in guidance.
DLTR closed Wednesday's regular session down 1.22% at $50. The stock has been trading between $30.56 and $56.81 for the past 52 weeks.