Dollar Tree (DLTR) shares experienced a significant 24-hour plunge of 7.90% in post-market trading on Wednesday, driven by a combination of negative analyst commentary and broader market concerns. The discount retailer faced a perfect storm of challenges that have shaken investor confidence.

The selloff was initially triggered by CNBC host Jim Cramer's recommendation for investors to steer clear of Dollar Tree. Cramer pointed out that the company's value proposition has eroded since the pandemic, as it repeatedly raised prices to offset costs. "There is no value proposition these days. The reduced sizes often give you the appearance of value, but people know when they're getting had," Cramer stated on his CNBC program.

Adding to the pressure, President Trump unveiled a sweeping new tariff plan that could severely impact Dollar Tree's business model. The plan includes a 34% tariff on China, effective April 9, which is particularly concerning for Dollar Tree as China is the source of the majority of its direct imports. In its most recent SEC filing, the company acknowledged that such tariffs "could impair our ability to meet customer demand and could result in lost sales, an increase in our cost of merchandise or other adverse impacts on our operations." This news sent shockwaves through the retail sector, with several other discount retailers and importers also experiencing significant stock declines.

As Dollar Tree prepares for the upcoming Q1 earnings season, investors will be closely watching how the company addresses these challenges and maintains its competitive edge in the evolving discount retail landscape. With 40 hedge funds currently invested in DLTR, according to recent data, the market reaction underscores the growing concerns about the company's ability to navigate changing consumer dynamics and potential trade disruptions.