Dollar Tree to Close Nearly 1,000 Stores After Surprise Fourth-Quarter Loss

Dollar Tree has announced the closure of almost 1,000 stores following an unexpected fourth-quarter loss. The discount retailer revealed plans to shut down approximately 600 Family Dollar stores within the first half of this year, along with 370 Family Dollar and 30 Dollar Tree outlets over the next few years.

Acquired by Dollar Tree for over $8 billion in 2015, Family Dollar has posed integration challenges since the buyout, leading to a $950 million impairment charge against the trade name. Neil Saunders, managing director of GlobalData, described the move as the final blow to the troubled acquisition.

In the latest financial report, Dollar Tree reported a loss of $1.71 billion for the quarter ended Feb. 3, contrasting with the previous year’s earnings. Revenue, however, saw an uptick to $8.64 billion, slightly below Wall Street’s expectations.

Amid a period of elevated inflation, Dollar Tree has attracted cost-conscious consumers with a 6.3% rise in same-store sales. Family Dollar, on the other hand, experienced a 1.2% decline in same-store sales, reflecting the chain’s challenges amidst market pressures.

The reduction in benefits for the Supplemental Nutrition Assistance Program (SNAP) has further impacted lower-income consumers, affecting chains like Family Dollar and Walmart. Dollar Tree anticipates earnings of $6.70 to $7.30 per share for fiscal 2024, with revenue in the range of $31 billion to $32 billion.