Dollar Tree forecasts bleak annual targets as product shortages hurt

[March 02, 2022]  (Reuters) -Discount store Dollar Tree Inc forecast full-year sales and profit largely below analysts' estimates on Wednesday, hurt by product shortages and higher labor costs due to global supply chain disruptions, sending its shares 4% down in pre-market trading.

Retailers saw strong demand for discounted items during the COVID-19 pandemic, but port congestions and higher labor costs have made it difficult to keep shelves stocked up.

The discount store operator forecast full-year sales between $27.22 billion to $27.85 billion, below analysts' average estimate of $28.04 billion, according to IBES data from Refinitiv .

It forecast full-year profit between $7.60 and $8.00 per share, compared with analysts' average estimate of $7.60 per share, according to IBES data from Refinitiv.

America's other biggest discount store, Dollar General Corp, is also combating spiraling freight costs, shipping delays and other supply-chain snarls, and has cut its annual forecast for sales and profit.

It will report its fourth-quarter earnings on March 17.

(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Shinjini Ganguli)

 

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