Dollar Tree, citing tariffs, cuts outlook and shares plunge

CHESAPEAKE, Va. — Dollar Tree reported weak third quarter profits and trimmed its full-year guidance citing higher tariffs.

Dollar Tree said if fully implemented, the tariffs will increase their costs by $19 million in the fourth quarter, or 6 cents per share. The discount retailer estimates earnings per share for next quarter to be in the range of $1.70 to $1.80.

The company expects full-year earnings to be $4.66 to $4.76 per share, down from previous guidance of between $4.90 and $5.11.

Shares slumped 17% Tuesday.

“We are planning to continue efforts to mitigate ongoing and potential new levels of tariffs as we head into 2020,” said CEO Gary Philbin.

The U.S.-China trade stalemate has led to higher costs across a number of industries, including retail. Retailers must weigh whether to eat those costs or pass them onto consumers, which can be risky. But some stores that have absorbed rising costs have said that if the next round of tariffs goes into place, they will start hiking prices.

On Tuesday, China said key officials have spoken to U.S. trade representatives and agreed to more talks aimed at reaching a deal. The tariff war between China and the U.S. has prompted some manufacturers to delay purchases and investment. The two countries have been working on a “Phase 1” deal that was announced Oct. 12 but still isn’t final.

Dollar Tree is also still working to integrate its Family Dollar businesses, acquired in 2015 for almost $9 billion. The company has closed hundreds of Family Dollar stores and is in the process of rebranding some, and renovating others.

Dollar Tree reported profit of $255.8 million for the third quarter, or $1.08 per share, falling 4 cents short of Wall Street expectations, according to a survey by Zacks Investment Research.

The Chesapeake, Virginia, company posted revenue of $5.75 billion, slightly better than the projections of industry analysts.

For the current quarter ending in January, Dollar Tree said it expects revenue in the range of $6.33 billion to $6.44 billion. Analysts surveyed by Zacks had expected revenue of $6.39 billion.

The company said it expected full-year revenue to be between $23.62 billion and $23.74 billion, up from a previous expected range of $23.57 billion and 23.79 billion.

Even with the sharp decline Tuesday, Dollar Tree shares are still up about 12% in the last 12 months.

Nevada casinos top $1B in monthly winnings

LAS VEGAS — Nevada casinos reaped more than $1 billion in winnings in October, marking the sixth time this year the state has topped the mark in a key index of fiscal health, regulators said Tuesday.

Despite the strong monthly showing in the Nevada Gaming Control Board’s report, house winnings were still below a year ago because October 2018 was an exceptionally good month, topping $1.06 billion, board senior research analyst Michael Lawton said.

That means the $1.02 billion reported last month was down 3.8% compared with the same month a year ago.

Nevada casinos also took in nearly $1.06 billion in winnings in September — a record for any September and a high-water mark for 2019.

“In the overall picture, six times this year is great,” Lawton said of exceeding the $1 billion mark.

Casino winnings for the first four months of the fiscal year were up nearly 2.5%.

Lawton noted that October 2018 had the highest casino winnings since October 2007, which was the best-ever for that month, at $1.17 billion.

The state collected $62.3 million in taxes based on the October 2019 revenue, up 9.4% from a year ago, according to the report.

Lawton attributed the results to weather, the number of events in Las Vegas and a surge in football sportsbook betting.

Nevada sportsbooks won $49.7 million last month, up 61.7% from last year, he said.

House winnings decreased last month on games including baccarat, blackjack and roulette. Slot machine figures were almost flat, with casinos reporting winnings of $699 million, up less than 1 percent.

Gambling tax revenue is second only to sales taxes as a percentage of the state’s annual budget. Nevada has no state income tax.

German automaker Audi to cut 9,500 jobs by 2025

BERLIN — Volkswagen subsidiary Audi says it’s cutting 9,500 jobs in Germany through 2025 as part of a transformation plan to make the company “lean and sustainable.”

The Ingolstadt-based automaker said Tuesday that at the same time, it expects to add 2,000 new positions for a net job loss of 7,500 jobs.

Audi currently employs some 90,000 people around the world, including 60,000 in Germany and has been struggling to keep up with domestic rivals BMW and Daimler in recent years.

Some of its cars have also been part of the diesel emissions cheating scandal, which has centered on parent company Volkswagen.

Part of Audi’s plan includes ensuring that new electric cars will be built at its plants in Ingolstadt and Neckarsulm in Germany.

The Associated Press