Dollar Tree Drops, Posts More Than $2 Billion Hit On Store Closure Plan; Williams-Sonoma Rides 26% Dividend Hike To Record High

Dollar Tree tumbled early Wednesday after missing fourth-quarter earnings estimates due to liability claims and a weak outlook. Meanwhile, rival discount retailer Dollar General (DG) reports Q4 results early Thursday. Home furnishing retailer Williams-Sonoma (WSM) spiked to all-time highs early Wednesday after announcing a 26% dividend raise and new buyback plan with its earnings beat.




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Dollar Tree Earnings

Dollar Tree (DLTR) reported a 25% earnings increase to $2.55 per share adjusted on 11.9% revenue growth to $8.63 billion.

That marked the chain’s first earnings gain in a year. But FactSet analysts expected earnings to increase 31% to $2.66 per share. Revenue was seen rising 12% to $8.67 billion.

Same-store sales rose 3% across the entire business, driven by a 6.3% increase in comparable sales at Dollar Tree locations. However, that was offset by a 1.2% same-store sales decline at Family Dollar.

The company announced it will close about 600 Family Dollar stores in the first half of 2024 as part of a portfolio optimization plan. Additionally, it will close 370 Family Dollar locations and 30 Dollar Tree stores over the next several years as the leases expire.

Dollar Tree incurred a $594.4 million impairment charge connected to the store portfolio review, as well as a $1.07 billion goodwill impairment charge and an intangible asset impairment charge of $950 million. Including the fourth-quarter charges, Dollar Tree had a loss of $7.85 per share for the quarter compared to earnings of $2.04 per share the year prior.

Dollar Tree guided 2024 earnings between $6.70 to $7.30 per share for fiscal 2024, compared to 2023’s adjusted earnings of $5.89 per share. The retailer predicts consolidated revenues tick up slightly to range from $31 billion to $32 billion. Dollar Tree said it expects shrink and mix levels to hamper results in the first half of the year, but favorable freight rates and reduced SNAP benefits should provide a boost throughout the year.

FactSet forecasts 2024 earnings of $7.04 per share on $31.68 billion in sales.

Dollar Tree guided Q1 earnings between $1.33 and $1.48 per share on $7.6 billion to $7.9 billion in sales. The outlook came in below Wall Street estimates of 15.6% earnings growth to $1.70 per share, but was in-line with revenue expectations of 4.9% growth to $7.68 billion.

DLTR stock fell nearly 13% early Wednesday after results.

Dollar Tree advanced 5.4% in 2024 through Tuesday’s close.

Meanwhile, FactSet predicts Dollar General earnings early Thursday fall 41.5% to $1.73 per share. Earnings declines accelerated over the last two quarters. Wall Street forecasts revenue falls 4.2% to $9.77 billion after three quarters of slowing gains. DG stock is extended, up nearly 16% for the year after a mid-February flat base breakout.

Dollar General shares slid about 2% Wednesday morning.

Williams-Sonoma

Home furnishing retailer Williams-Sonoma early Wednesday reported a 1% decline in adjusted earnings to $5.44 per share while revenue fell 7.1% to $2.28 billion.

FactSet expected earnings to decrease 6.9% to $5.12 per share on a 9.5% revenue drop to $2.22 billion.

The results marked Williams-Sonoma’s third consecutive quarter of slowing earnings declines. It also ended its three-quarter streak of accelerating sales declines.

The company also authorized a 26% dividend hike to $1.13 per share and approved a new $1 billion stock repurchase program.

For fiscal 2024, Williams-Sonoma expects revenue growth to range from a 3% decline to 3% increase with comparable sales between a 4.5% drop and 1.5% uptick. Williams-Sonoma said it expects to deliver mid-to-high single-digit revenue growth over the long term with an operating margin in the mid-to-high teens.

WSM stock bolted 12% early Wednesday on results to a new all-time high. Shares surpassed its previous record of 249.04 from March 7.

Williams-Sonoma rallied 19.5% so far this year through Tuesday’s close.

You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison

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