Dollar Tree stock was going down after the store reported good quarterly results and said it would be reviewing its Family Dollar division in a formal way.
According to FactSet, Dollar Tree had adjusted earnings of $1.43 per share for the first fiscal quarter that ended on May 4. This was in line with what Wall Street expected. The net sales of $7.63 billion were also in line with expectations.
Dollar Tree stock fell 2.8% to $116.90 before the market opened, while futures that follow the S&P 500 went up 0.2%.
Dollar Tree forecasts net sales of $7.3 billion to $7.6 billion and adjusted earnings per share of $1 to $1.10 billion for the second quarter.
The company still thinks that its net sales for the year will be between $31 billion and $32 billion, and that its adjusted earnings will be between $6.50 and $7 per share.
Dollar Tree said it is starting a formal review of strategic alternatives for the Family Dollar segment. These could include, but aren’t limited to, a sale or a spinoff.
The company also said that its distribution centre in Marietta, Oklahoma, was destroyed by a tornado in April, causing losses of $117 million as of May 4. Dollar Tree said in a press release that they couldn’t guess at this point how much their expected insurance payouts for business interruption and redevelopment costs would be higher than the losses they had already recognised.
