March 16 (Reuters) - Discount retailer Dollar Tree joined rival Dollar General in forecasting muted annual sales as shoppers stay frugal in the face of mounting macroeconomic volatility.
Dollar stores are struggling as inflation-weary shoppers rein in spending, while theft, wage pressures, and margin-eroding price competition from heavyweights such as Walmart and Amazon also pressure results.
American shoppers are navigating increasing costs of living and signs of deteriorating labor market conditions.
Consumer prices also likely accelerated in February, fueled by tariffs and a rise in the costs of gasoline and oil due to tensions in the Middle East.
Last Thursday, Dollar General forecast soft full-year sales despite a quarterly results beat. Meanwhile, retail behemoth Walmart, which saw online sales increasingly driven by higher‑income shoppers, maintained a cautious full‑year outlook despite posting upbeat quarterly sales.
Shares of Dollar Tree fell about 1% in premarket trading after dropping nearly 13% so far this year. They had risen 64% in 2025.
Dollar Tree expects fiscal 2026 net sales in the range of $20.5 billion to $20.7 billion, compared with analysts' estimates of $20.69 billion, per data compiled by LSEG.
The company expects annual adjusted earnings per share in the range of $6.50 to $6.90, largely in line with analysts' estimates of $6.69.
The company has been investing in updated store layouts, better product selection for shoppers, and stronger seasonal displays, while ramping up its multi-price point strategy to draw in value-seeking customers.
Dollar Tree, which said last year that it would diversify sourcing and raise prices to mitigate tariffs, has been juggling rising costs of imports while trying not to alienate budget-conscious shoppers.
For the fourth quarter ended January 31, the company posted quarterly sales of $5.45 billion, compared with analysts' estimates of $5.46 billion, while adjusted profit per share came in at $2.56, slightly above expectations of $2.52.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Devika Syamnath)
