Retailers Dollar Tree and Foot Locker diverged Wednesday following their quarterly earnings reports. Foot Locker shares carved lower. Nike stock also slid, apparently affected by Foot Locker's performance.
Dollar Tree reported a 16% increase in earnings to $1.12 per share adjusted, to beat FactSet expectations of $1.07 per share. Revenue rose 3.5% to $7.56 billion, also beating views for $7.44 billion.
Companywide comparable sales rose 1.8%, with a 1.9% increase in Family Dollar same-store sales and a 1.8% increase for same-store Dollar Tree sales.
The company said it is continuing to review strategic options for its Family Dollar business, including a potential sale, spinoff or other disposition of the business. However, there is no set date or timeline to complete the review process.
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.
The company narrowed its full-year earnings outlook to range from $5.31 to $5.51 per share, from its prior guidance for $5.20 to $5.60 per share. The discount retailer sees 2024 sales ranging from $30.7 billion to $30.9 billion, with comparable sales growth in the low-single-digits.
DLTR stock pared gains to 1.9% Wednesday after jumping about 5% in early trade.
Dollar Tree unraveled about 48% this year and is attempting to rebound from its lowest level since March 2020.
Foot Locker
Foot Locker 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.
Overall comparable sales rose 2.4% for the quarter.
Foot Locker 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. The company also saw spending slow below expectations in November as customers held back for the holiday season. Foot Locker noted some reacceleration following Thanksgiving week.
Despite the recent sales bump, 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. Foot Locker cut its comparable sales forecast to range from 1% to 1.5% growth, from its prior expectations for up to a 3% increase. The shoe retailer also lowered its 2024 earnings outlook to range from $1.20 to $1.30 per share, from its previous forecast for $1.50 to $1.70 per share.
Foot Locker guided Q4 earnings between 70 cents and 80 cents per share, which missed FactSet forecast for 95 cents. The company expects fourth quarter sales to fall between 1.5% and 3.5% for the quarter.
Foot Locker stock unraveled about 19% early Wednesday to tumble below its 50-day moving average. Shares closed with a 9% decline on the day and have fallen more than 29% so far this year.
Nike stock ticked lower after its early slide. The Dow Jones retailer has tanked nearly 28% in 2024.
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