Trump’s China Tariffs Erase Profits At Dollar Stores

Bloomberg reports:

Dollar Tree Inc. shares fell the most intraday since 2012 after the budget retailer trimmed its outlook on 2019 profit, saying tariffs on Chinese imports are driving up costs. Dollar Tree’s decline has erased much of its year-to-date gain.

Dollar Tree’s downward revision shows the risk that the ongoing U.S.-China trade war poses for retailers — especially value-based chains that target lower-income consumers. The company has been carrying a new multi-price strategy instead of simply charging $1 for all of its goods and is renovating stores it operates under the Family Dollar brand.

“They’ve done a very good job thus far of absorbing some of that impact from tariffs, but as tariffs continue to pile up, they’ll probably have to push through some price increases,” said Jennifer Bartashus, a senior analyst at Bloomberg Intelligence.