Dollar Tree (DLTR) shares tumbled 5.25% in pre-market trading on Wednesday following the release of its first-quarter earnings report. While the discount retailer posted better-than-expected Q1 results, investors appeared to focus on the company's weak outlook for the second quarter.

For the first quarter, Dollar Tree reported adjusted earnings per share of $1.26, surpassing the analyst estimate of $1.20. Revenue also beat expectations, coming in at $4,600 million compared to the estimated $4,536 million. The company's same-store net sales growth for the Dollar Tree segment was impressive at 5.4%.

However, the positive Q1 performance was overshadowed by a gloomy forecast for Q2. Dollar Tree warned that adjusted earnings per share from continuing operations in the second quarter could decline by as much as 45-50% compared to the same period last year. This stark outlook seems to be the primary driver behind the stock's pre-market plunge.

Despite the near-term challenges, Dollar Tree maintained its full-year 2025 net sales outlook of $18.5-$19.1 billion and updated its adjusted EPS guidance to a range of $5.15-$5.65. The company also noted that its previously announced sale of Family Dollar is on track to close in Q2 FY 2025, with an expected economic impact of tax benefits from losses on the sale to be about $350 million. Investors will be closely watching how Dollar Tree navigates these transitions and whether it can mitigate the projected earnings pressure in the coming quarters.