Dollar Tree Inc (NASDAQ:DLTR) stock rose 0.093% (As on August 25, 11:47:27 AM UTC-4, Source: Google Finance) after the company raised its full-year forecast for sales, but narrowed its outlook for earnings. Dollar Tree said the guidance reflects improved sales, and attributed the tighter profit range to more low-margin purchases such as food, ongoing challenges with shrink, the term used for lost, damaged or stolen goods, and higher diesel fuel costs. Net income fell to $200.4 million, from $359.9 million, a year earlier. Same-store sales climbed 6.9% across the company. At the Dollar Tree chain, same-store sales increased 7.8% and for Family Dollar, same-store sales rose 5.8% year over year.

DLTR in the second quarter of FY 23 has reported the adjusted earnings per share of 91 cents, beating the analysts’ estimates for the adjusted earnings per share of 87 cents, based on a survey of analysts by Refinitiv. The company had reported the adjusted revenue growth of 35.9 percent to $7.32 billion in the second quarter of FY 23, beating the analysts’ estimates for revenue of $7.18 billion.

Moreover, the company has expanded its range of items to include more that sell for a higher price point, such as frozen and refrigerated items that sell for $3, $4 and $5. During the second quarter, Dollar Tree’s margins got hurt by shoppers’ emphasis on buying food and essentials, which tend to be less profitable. Along with that spending shift, the company’s profits have gotten squeezed by higher expenses including wage increases for store employees, investments in store repairs and bigger utility bills due to hotter summer weather in much of the country. Its margins also decreased compared with the year-ago period when it phased in price hikes from $1 to $1.25.

In addition, the Dollar Tree chain saw a nearly 10% jump in traffic, but the average amount spent by customers who visited the stores dropped by 1.6%. At Family Dollar, traffic rose by about 3% and the average ticket increased by about 2%.

Dollar Tree now expects consolidated net sales to range from $30.6 billion to $30.9 billion for the full fiscal year, and earnings per share to range from $5.78 to $6.08. It had previously forecast consolidated net sales of between $30.0 billion and $30.5 billion and diluted earnings per share of between $5.73 and $6.13. Dollar Tree’s guidance disappointed Wall Street, as the lower end of its earnings forecast fell below consensus expectations.