Dollar Tree’s shares plummeted over 22% on Wednesday after the discount retailer significantly lowered its full-year outlook, attributing the revision to mounting pressures on middle- and higher-income customers, who have been forced to make difficult trade-offs in the face of prolonged inflation and rising everyday costs. The company now expects its full-year consolidated net sales to fall between $30.6 billion and $30.9 billion, down from the previously forecasted $31 billion to $32 billion. Additionally, Dollar Tree anticipates its adjusted earnings per share to range from $5.20 to $5.60, a sharp decline from the earlier projection of $6.50 to $7.00.

The company has also been grappling with higher-than-expected expenses related to customer claims, including costs to reimburse, settle, and litigate incidents that occurred at its stores. Despite these challenges, Dollar Tree reported a modest 0.7% increase in same-store sales for the quarter, with its namesake chain seeing a 1.3% rise, while Family Dollar, which it acquired in 2015, experienced a 0.1% decline. The company has also faced difficulties in turning around the performance of Family Dollar, leading to the closure of nearly 1,000 underperforming stores and ongoing considerations of selling the brand.

Dollar Tree’s struggles come on the heels of similar issues faced by Dollar General, its major competitor, which recently cut its full-year outlook, citing financial strain on its core customer base. The discount retail sector, known for catering to value-conscious shoppers, has seen a shift in consumer behavior as customers increasingly seek better deals amid economic uncertainty. As of Tuesday’s close, Dollar Tree’s stock has fallen nearly 43% year-to-date, hitting a 52-week low.