Dollar Tree misses Wall Street's earnings expectations due to increased competition and merger-related costs. Kelsey Hubbard reports.
Dollar Tree disappoints. The discount retailer reported second quarter sales rose 48 percent, but that was less than analysts has anticipated. It blamed intense competition, from the likes of Wal-Mart, and costs associated with its acquisition of Family Dollar Stores. Same-store sales also rose in the quarter, as stores saw increased customer traffic and larger ticket sales. Dollar Tree dethroned Dollar General to become the number one U.S. discount retailer by store count after it acquired its larger rival Family Dollar Stores in July. Costs related to the deal pushed Dollar Tree to a net loss for the second quarter but the company is satisfied with the integration plan. Bob Sasser, Chief Executive Officer of Dollar Tree, said: "We are very pleased to have successfully completed the acquisition. We are now an organization with annual sales exceeding $19 billion, more than 13,800 stores across North America and a network of more than 145,000 associates. We remain confident in our ability to deliver $300 million in annual run-rate synergies by the end of the third year post-acquisition." Dollar Tree shares fell over six percent in early trading though they are still up about 30-percent over the past year.