By Brett Callwood, Benzinga Staff Writer

Dollar Tree (DLTR) said Wednesday that fourth-quarter earnings rose 16%. Analysts were not getting too excited, though, as the budget retailer's outlook for the current quarter came in short of expectations.

The forecast was a bit of a letdown, since Dollar Tree, Dollar General (DG) and Family Dollar (FDO) have been on fire ever since the economy soured. Their discounted products resonated with cash-strapped consumers looking for bargains.

The companies are looking to expand in smart directions, too. Dollar Tree is developing a retail format called Deal$, for example, which features low-priced (though not necessarily $1) goods. It has also expanded its frozen and refrigerated food selection.

Dollar Tree's total sales increased 12.8% to $1.95 billion in the quarter, and profit rose 24% to $1.60 per share. For the full year, sales rose 12.7% to $6.63 billion and profit rose nearly 25% to $4.03 a share.

But the company disappointed Wall Street with its earnings forecast of 91 cents to 97 cents a share on revenue of $1.65 billion to $1.69 billion for the current quarter. Analysts were looking for 98 cents a share on $1.7 billion in revenue. For the current fiscal year, Dollar Tree forecast per-share earnings of $4.65 to $4.90 on revenue of $7.25 billion to $7.42 billion.

CEO Bob Sasser said that the Dollar Tree merchandising model is flexible enough to allow a strategy of ever-changing products. "To the customer, this means there is always something new at Dollar Tree," he added. "As customers strive to balance their budgets, they can find the high-value basics they need while enjoying the thrill of the hunt on every visit."

Analysts at Deutsche Bank seemed to downplay the disappointing forecast, saying that over the past eight quarters, Dollar Tree has exceeded the high end of its guidance by an average of 5 cents a share. "All told, with multiple upgrades in recent weeks, expectations were very high and we think the stock could sell off a bit at the open," the analysts wrote, "but we'd see any material weakness as an especially attractive opportunity to buy the stock."

The analysts upped their price target on the stock to $94 from $89.

Goldman Sachs, meanwhile, said that with the stock trading at an all-time peak relative multiple to the S&P 500, it believes investors have come to expect consistent beat-and-raises. Guidance was characteristically conservative, the analysts wrote.

Jefferies noted that the company's free cash flow was $436 million, up from $340 million a year earlier.