News Tech: Aug 25 (Reuters) – Dollar Tree Inc (DLTR.O) trimmed its full-year profit forecast on Thursday, blaming planned price cuts at its Family Dollar line of stores in an effort to compete with other retailers that have been ramping up discounts.
Elevated inventory levels at Walmart Inc (WMT.N) and Target Corp (TGT.N) have forced the retail chains to clear excess stocks by offering deep discounts, which analysts have said could limit the number of customers trading down from traditional retailers to off-price stores.
Shares of the discount store operator dropped more than 8% in premarket trading.
“Competitive pricing at Family Dollar will over the long term enhance our sales productivity and profitability, and ultimately our opportunity to accelerate store growth,” Dollar Tree Chief Executive Officer Mike Witynski said.
Source: Reuters Trust Principles.