FILE - A woman leaves a Dollar Tree store in Urbandale, Iowa, on Feb. 25, 2021. Dollar Tree is slashing its full-year adjusted earnings and sales forecasts as its customers are taking an even more cautious approach to their spending and buying less. (AP Photo/Charlie Neibergall)

Dollar Tree is slashing its full-year earnings and sales forecasts as its customers continue to struggle with higher prices and spend less.

Shares tumbled more than 20% Wednesday after hitting a 52-week low on the prior day. The biggest one-day sell-off for Dollar Tree shares in more than 20 years arrived less than a week rival bargain chain Dollar General reported a dismal quarter and suffered its largest single-day slump ever.

Dollar Tree has been trying to lure customers from other retailers using its rock-bottom prices, but juggernauts like Walmart and Target have also said their customers are under pressure and they’re cutting prices, too.

That has left little leeway for bargain stores because huge chains like Target are cutting prices on groceries, a huge draw for customers who are likely to shop for other items at Target and skip an additional trip to a dollar store.

“Dollar stores have lost market share to larger retailers that have broadened their offerings and gained customer loyalty through everyday low prices,” said Jharonne Martis, director of consumer research, analytics and AI at LSEG.

And the economic headwinds that first hit low-income customers at Dollar Tree appear to be climbing upward to those who are better off, according to company executives.

“Dollar Tree has a broader customer base that includes more middle and upper-income households and beginning this quarter, we started to see inflation, interest rates, and other macro pressures have a more pronounced impact on the buying behavior of these customers,” said Chief Operating Officer Mike Creden.

Dollar Tree now expects full-year adjusted earnings between $5.20 and $5.60 per share, down from a range of $6.50 to $7.

The Chesapeake, Virginia, company also projected annual sales in a range of $30.6 billion to $30.9 billion, down from $31 billion to $32 billion. Both of those numbers fall short of Wall Street projections and it showed in the retailer’s plunging stock Wednesday.

Dollar Tree’s second quarter adjusted revenue was $7.37 billion, short of the $7.5 billion that analysts surveyed by Zacks Investment Research expected.

Dollar Tree earned $132.4 million, or 62 cents per share, for the period ended Aug. 3. Stripping out certain items, earnings were 67 cents per share, 36 cents short of Wall Street projections.

Though inflation is slowing, Americans continue to struggle with sharply higher prices for such necessities as gas, food and housing compared with their pre-pandemic levels.

For the third quarter, Dollar Tree anticipates adjusted earnings between $1.05 and $1.15 per share, with revenue in a range of $7.4 billion to $7.6 billion. That, too, is shy of Wall Street expectations for per=share earnings of $1.31 and revenue of $7.58 billion.

Dollar Tree is also wrestling with internal problems that have hampered growth.

In June the company said that it was looking at strategic options for the Family Dollar stores that it owns, including a possible sale.

Dollar Tree acquired Family Dollar nearly a decade ago for more than $8 billion after a bidding war with Dollar General. But it’s had difficulty incorporating Family Dollar into its business and recently announced that it would close nearly 1,000 stores, with most of them being Family Dollar locations.

“On the bottom line, net income is down by a third,” said Neil Saunders, managing director of GlobalData. “The overall impression is that Dollar Tree has quickly moved from a company that was advancing to one that is simply treading water. Though, to be fair, most of this is because of the troubles at Family Dollar.”