Dollar Tree forecasts subdued annual sales as spending tightens

March 16 (Reuters) - Discount retailer Dollar Tree (DLTR) joined rival Dollar General in forecasting muted annual sales as shoppers stay frugal in the face of mounting macroeconomic volatility.

Dollar stores are struggling as inflation-weary shoppers rein in spending, while theft, wage pressures, and margin-eroding price competition from heavyweights such as Walmart and Amazon also impact results.

American shoppers?are navigating increasing costs of living and signs of deteriorating labor market conditions. Consumer prices also likely accelerated in February, fueled by tariffs and a rise in the costs of gasoline and oil due to tensions in the Middle East.

Last Thursday, Dollar General forecast soft full-year sales despite a quarterly results beat, while retail behemoth Walmart, which saw online sales increasingly driven by higher-income shoppers, maintained a cautious full-year outlook.

Shares of Dollar Tree (DLTR) rose marginally in premarket trading after dropping nearly 13% so far this year. They had risen 64% in 2025.

The company said it expects fiscal 2026 net sales from continuing operations to range between $20.5 billion and $20.7 billion, compared with analysts' estimate of $20.69 billion, according to data compiled by LSEG. It forecast adjusted earnings per share of $6.50 to $6.90, largely in line with expectations of $6.69.

The forecast appears "appropriately conservative", Evercore ISI analyst Michael Montani said.

Dollar Tree (DLTR) has been investing in updated store layouts, improved merchandise assortments, and stronger seasonal displays, while expanding its multi-price point strategy to attract value-seeking shoppers.

"A multi-price point strategy introduces more competition, especially with competitors with bigger pockets," CFRA analyst Arun Sundaram said.

Dollar Tree (DLTR) has said it will diversify sourcing and selectively raise prices to mitigate tariff impacts while trying not to alienate price-sensitive shoppers.

For the fourth quarter, the company posted sales of $5.45 billion, in line with analysts' estimates, while adjusted profit per share came in at $2.56, slightly above expectations of $2.52.

(Reporting by Neil J Kanatt in Bengaluru; Editing by Devika Syamnath)