What's Behind The 55% Drop In Dollar Tree Stock?

Core Viewpoint - Dollar Tree's stock has experienced a significant decline of approximately 55% from $142 to$69, contrasting with a 16% increase in the S&P index during the same period [1][2]. Financial Performance - The company reported weaker-than-expected second-quarter results, with revenues growing only 0.7% year-over-year to $7.38 billion [4]. - Same-store sales for the Dollar Tree segment increased by 1.3$0.67 in Q2 [4]. Cost Structure - Dollar Tree achieved an 80-basis-point increase in gross margin to 30% due to lower freight costs [5]. - However, selling, general, and administrative expenses rose from 25.3% to 27.3%, influenced by additional legal expenses related to customer accidents [5]. Future Guidance - For Q3, Dollar Tree anticipates sales between $7.4 billion and$7.6 billion, with adjusted earnings per share projected between $1.05 and$1.15 [6]. - For the full fiscal year 2024, the revenue forecast has been revised to a range of $30.6 billion to$30.9 billion, down from the previous estimate of $31 billion to$32 billion [6]. - Adjusted earnings per share for the full year are now expected to be between $5.20 and$5.60, a significant reduction from the earlier guidance of $6.50 to$7 [6].