(Reuters) – Dollar Tree Inc missed market estimates for holiday-quarter sales on Wednesday as competition from big-box retailers increased, while demand for party supplies came under pressure due to the COVID-19 pandemic, sending its shares down 3%.
Analysts have said sales at dollar stores have come under pressure, with people increasingly wanting to buy everything from cheap toilet paper to higher-priced electronics under one roof due to fears of catching the new coronavirus.
Dollar Tree, which plans to renovate 1,250 Family Dollar stores and open 600 new outlets under the two banners, stopped short of providing an outlook for fiscal 2021.
Same-store sales at its namesake unit increased 2.4% in the fourth quarter ended Jan. 30, well below Wall Street expectations of a 4.37% rise, even as its Family Dollar segment topped estimates.
Net income rose over 300% to $502.8 million, or $2.13 per share, as Dollar Tree had taken a $313 million goodwill impairment charge last year.
Analysts on average had estimated a profit of $2.11 per share.
Net sales rose 7.2% to $6.77 billion but missed estimates of $6.79 billion, according to IBES data from Refinitiv.
Dollar Tree also announced a $2 billion increase to its stock repurchase plan, leaving it with $2.4 billion to buy back shares.
(Reporting by Praveen Paramasivam in Bengaluru; Editing by Vinay Dwivedi)
