Dollar Tree and Foot Locker, two major retailers, diverged on Wednesday after releasing their quarterly earnings reports. Foot Locker’s shares fell lower, with Nike stock also experiencing a decline.
Dollar Tree reported a 16% increase in adjusted earnings to $1.12 per share, exceeding FactSet expectations of $1.07 per share. Revenue rose 3.5% to $7.56 billion, also beating views for $7.44 billion.
The company’s comparable sales increased by 1.8%, with Family Dollar same-store sales rising 1.9% and Dollar Tree same-store sales increasing 1.8%. However, the company is reviewing strategic options for its Family Dollar business, including a potential sale or spinoff.
Dollar Tree guided Q4 adjusted earnings between $2.10 and $2.30 per share, with net sales ranging from $8.1 billion to $8.3 billion. FactSet expects earnings of $2.23 per share on $8.23 billion in revenue.
Foot Locker, on the other hand, reported a 3-cent increase in adjusted earnings to 33 cents per share, missing analyst expectations for 40 cents. Total sales fell 1.4% to $1.96 billion, also missing views for just over $2 billion in revenue.
The company’s comparable sales rose 2.4%, but CEO Mary Dillon noted that consumer spending trends softened after the back-to-school season ended in August, with a higher-than-expected promotional environment.
Foot Locker lowered its guidance due to a more promotional environment and softer consumer demand outside of key selling periods. The company now expects 2024 sales to slide 1% to 1.5%, from its previous outlook for a 1% swing in either direction.
Both stocks have experienced significant declines this year, with Dollar Tree down about 48% and Foot Locker down nearly 29%.
Source: https://www.investors.com/news/foot-locker-stock-nike-dollar-tree-retail-earnings-2024