© Jin Lee/Bloomberg via Getty Images / Getty ImagesDollar Tree will close 600 of its Family Dollar stores in the first half of 2024.
Dollar Tree announced on Wednesday that it plans to close nearly 1,000 U.S. stores in its portfolio after suffering a significant quarterly loss.
As part of its portfolio optimization, initially announced late last year, the company will close 600 of its Family Dollar stores in the first half of 2024. An additional 370 Family Dollar stores and 30 Dollar Tree stores will close over the next several years once their leases expire, the company said in its fourth-quarter earnings report.
The company incurred $594.4 million in charges in connection with the store portfolio review.
Dollar Tree CEO Rick Dreiling said during an earnings call in December that its Family Dollar stores had softer same-store sales due to unexpected costs from a recall of various over-the-counter drugs and medical devices in nearly two dozen states last fall.
"To this end, we have initiated a comprehensive review of our Family Dollar portfolio to address underperforming stores that are not aligned with our transformative vision for the company," Dreiling told analysts on the call.
This included identifying stores for potential closure, re-bannering or relocation as the company worked to ensure "that each asset under the Family Dollar banner is delivering its full value" for shareholders, Dreiling said.
The company incurred a net loss of $1.71 billion, or $7.85 per share, in the quarter ended Feb. 3. It was an about-face from a year ago when the company reported a profit of $452.2 million.
Dollar Tree reported $2.55 per share on an adjusted basis, below Wall Street's $2.65 a share consensus. Its net sales of $8.63 billion were slightly shy of analysts' estimate of $8.67 billion.
CFO Jeff Davis said in Wednesday's earnings release that the company is "making solid progress on our key growth initiatives" and that he is "encouraged by the early results of our business transformation efforts."
The company expects sales for the year to range between $31 billion and $32 billion.
Reader Comments
Steelj You're right. When few people own all the stores and goods and production means, we're less than a couple bad quarters of returns from losing access to jobs and goods.
LOLOLOL!!!
Prescriptions are only handled that way.
Very few Canadians of my age would risk purchasing health care from Walmart or Dollar stores because we have become used to the oversight of our medical system.
At the same time, it would be interesting to be able to by my smokes, beer and oxycontin from the same place...
Anyway, I don't think it's a great idea for Dollar stores to get into that business. I think they're delusional if they don't think it's going to be a disaster for them. I think they see $$$$$ up-front and aren't considering what happens down the road when they realize it's not as profitable as they thought it would be.
Walmart here has legitimate, generally well-staffed pharmacies and has actually used it's power to lower drug prices for some of the most commonly prescribed drugs, but that is literally the only good thing I have to say about Walmart.
Wow, that is our world's biggest problem!!
You make me think of Peter Seller's accent as Inspector Clouseau...
" Does your dog bite ?" [Link]