Approximately 1,000 Family Dollar and Dollar Tree stores are scheduled to close after “failed” business decisions and an “unexpected fourth-quarter loss,” sending the company’s stock plummeting.
Dollar Tree made a bid to rival Dollar General to acquire Family Dollar for more than $8 billion in 2015, but the merger failed to produce positive results.
Company executives told investors Wednesday that about 600 Family Dollar stores will close in the first half of this year, with 370 additional Family Dollar 30 Dollar Tree stores expected to close over the next few years.
“This dramatic shakeout is a major milestone in Family Dollar Chain’s rather unsuccessful acquisition, which has caused nothing but inconvenience to Dollar Tree since the acquisition was completed in 2015,” Global said. said Neil Saunders, managing director of data. statement obtained by washington post.
“Essentially, almost a decade later, Dollar Tree is still sifting through the mess it inherited and hasn’t been able to completely pivot.”
The soon-to-be-closed stores represent about 12% of Family Dollar stores, costing Dollar Tree “approximately $730 million on an annualized occupancy basis,” CEO Richard Dreyling said. he told shareholders.
Wednesday press release Dollar Tree’s article detailed the company’s financial position through the fourth quarter of fiscal 2023 and said the decision to close stores was made after a “portfolio optimization review.”
“We took a thoughtful and measured approach to addressing our underperforming stores, taking into account the performance of individual stores, the local operating environment, and the broader need for scale and operational efficiency across our portfolio. ” Dreyling explained.
The report indicated an “unexpected loss in the fourth quarter.” report WDIV Local 4 has a more in-depth look at the company’s earnings.
Dollar Tree stock fell 14% at the opening bell on Wednesday.
For the three months ended February 3, Dollar Tree lost $1.71 billion, or $7.85 per share. The Chesapeake, Virginia-based company had profit of $452.2 million, or $2.04 per share, in the same period last year.
Excluding certain items, earnings were $2.55 per share, still short of the $2.67 per share expected by Wall Street, according to Zacks Investment Research.
The company’s shortage occurred less than three years after Dollar Tree was founded. forced to raise prices Breitbart News reported in November 2021 that the price of common goods rose from $1.00 to $1.25 as inflation increased.
