11:27 AM EDT, 09/04/2024 (MT Newswires) -- Shares of Dollar Tree ( DLTR ) plunged intraday Wednesday as the bargain store chain's fiscal second-quarter earnings unexpectedly slid year over year while sales missed estimates amid macro pressures on consumers.

Adjusted earnings per share tumbled 26% to $0.67, compared with the $1.04 average analyst estimate on Capital IQ. Revenue edged up to $7.38 billion for the three months ended Aug. 3 from $7.33 billion the year earlier but missed Wall Street's $7.48 billion expectation.

Enterprise comparable sales ticked up 0.7%. By segment, Dollar Tree ( DLTR ) same-store sales rose 1.3% while Family Dollar sales dipped 0.1%. Shares of Dollar Tree ( DLTR ) slumped 19% in Wednesday trade.

"Dollar Tree's ( DLTR ) comp softness was primarily on the discretionary side of the business, and reflected the increasing effect of macro pressures on purchasing behavior of Dollar Tree's ( DLTR ) middle and higher income customers," Chief Financial Officer Jeff Davis told analysts on a conference call, according to a Capital IQ transcript.

The company reduced its full-year sales guidance to between $30.6 billion and $30.9 billion from its prior outlook in the $31 billion to $32 billion range. Its adjusted EPS forecast was lowered to between $5.20 and $5.60 from a previous $6.50 to $7 range. Analysts are looking for revenue and normalized EPS of $30.97 billion and $6.22 in the ongoing year, according to Capital IQ.

The company now expects enterprise comparable sales to grow by a low-single digit compared with a prior outlook of low-to-mid-single-digit growth.

The guidance update reflects factors including general liability claims related to customer accidents and other incidents at the company's stores, a more conservative sales outlook at Dollar Tree ( DLTR ), and incremental costs associated with converting the recently acquired portfolio of 99 Cents Only stores, Davis said in a statement.

For the third quarter, Dollar Tree ( DLTR ) is guiding for sales between $7.4 billion and $7.6 billion on low-single-digit comparable sales growth. Adjusted EPS is pegged between $1.05 and $1.15. That compares with $7.31 billion and $0.97 in the same quarter of 2023. The consensus is for sales and normalized EPS of $7.54 billion and $1.21 this quarter.

Truist Securities Managing Director Scot Ciccarelli called the results "a mess" and said that the dollar store sector is "under extreme pressure." Companies that target lower-income consumers have "continued to substantially underperform given the cumulative, corrosive impact of inflation," he said.

Price: 66.26, Change: -15.39, Percent Change: -18.85