** charts before earnings **
** charts after earnings **
(Reuters) - Dollar Tree Inc (DLTR) on Tuesday forecast holiday-quarter profit below Wall Street expectations, as the discount store operator expects a hit from U.S. tariffs on Chinese imports, sending its shares down about 8% before the opening bell.
The tariffs as part of the prolonged trade war between Washington and Beijing have been a pressure point for retailers, which source a large chunk of their merchandise from China.
The company said it expects fourth-quarter profit in the range of $1.70 to $1.80 per share, below the average analyst expectation of $2.02.
Dollar Tree also said it expects fourth-quarter merchandise margin to be pressured by higher sales of low-margin consumables and rising wages at its distribution centers.
The company forecast fourth-quarter sales in the range of $6.33 billion to $6.44 billion, the mid-point of which is below the average analyst estimate of $6.41 billion.
Excluding items, the company earned $1.08 per share in the third quarter ended Nov. 2, missing estimate of $1.13.
Net sales rose 3.7% to $5.75 billion, above analysts' average estimate of $5.74 billion, according to IBES data from Refinitiv.
Same-store sales rose 2.50%, slightly falling short of the average analyst estimate of 2.54%.
Dollar Tree, which competes with Dollar General and Walmart (WMT) for quick grocery stops, has been trying to tighten up financials at Family Dollar. Dollar Tree has closed, rebranded or renovated hundreds of Family Dollar stores in the process.
However, as a Digiday article this year noted, Dollar Tree and Family Dollar take different approaches to discount retail. Dollar Tree has largely bound itself to items priced at $1. At Family Dollar, prices range as high as $10, potentially making Dollar Tree overall more vulnerable to rival retailers, the article said.
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