Dollar Tree Cuts Forecast Amid Expenses to Buy Family DollarJames Callan
Dollar Tree Inc., the discount chain that’s in a bidding war to buy Family Dollar Stores Inc., cut the top end of its full-year earnings forecast amid acquisition-related costs.
Earnings per share for 2014 will be as much as $3.06, Chesapeake, Virginia-based Dollar Tree said today in a statement. That’s reduced from the maximum of $3.12 that Dollar Tree saw in May. Analysts projected $3.13, the average of estimates compiled by Bloomberg.
Dollar Tree’s pursuit of Family Dollar came closer to fruition today after the takeover target rejected a $9 billion offer from Dollar General Corp., citing antitrust hurdles. Last month, Dollar Tree agreed to buy Family Dollar for $8.5 billion, creating a sprawling discount chain with $18 billion in sales and more locations than any U.S. retailer.
Shares of Dollar Tree fell 1.3 percent to $54.28 at the close in New York. They have dropped 3.8 percent this year.
Net income in the second quarter fell 2.6 percent to $121.5 million, or 59 cents a share, from $124.7 million, of 56 cents, a year earlier, Dollar Tree said. Profit excluding acquisition-related costs totaled 61 cents a share, missing the 64-cent analyst estimate.
Sales increased 9.5 percent to $2.03 billion.