(Financial Eye) – Dollar Tree Inc (NASDAQ:) raised its annual sales forecast on Thursday, betting that more inflation-hit consumers would turn to dollar stores for cheaper food, snacks and other household supplies.
Discount stores have seen increased footfall as surging inflation has hit lower-income households hard and encouraged even mid-to-high income shoppers to seek out bargains.
Walmart (NYSE:) Inc had also lifted its annual sales and profit outlook on strong demand for groceries and better inventory levels, but it forecast a muted holiday season as discretionary spending remains pressured.
Dollar Tree’s Family Dollar chain posted its strongest quarterly same-store sales jump since 2020 and grew comparable traffic for the first time in 12 quarters, following planned price cuts rolled out in the previous quarter.
Still, the discount store operator said it now expects full-year profit per share to be in the lower half of its previously estimated range of $7.10 to $7.40.
The company expects fiscal 2022 net sales of $28.14 billion to $28.28 billion, compared with the $27.85 billion to $28.10 billion range estimated previously.