Dollar Tree Inc. announced plans to close nearly 1,000 stores in the U.S. after facing a significant quarterly loss. The company revealed that 600 Family Dollar stores will shut down in the first half of 2024, with an additional 370 Family Dollar stores and 30 Dollar Tree stores to follow over the next several years.
The decision came after Dollar Tree incurred $594.4 million in charges related to a store portfolio review. The Family Dollar stores experienced softer same-store sales due to unexpected costs stemming from the recall of over-the-counter drugs and medical devices.
In the quarter ending Feb. 3, Dollar Tree reported a net loss of $1.71 billion, a stark contrast to the $452.2 million profit from the previous year. The adjusted earnings of $2.55 per share fell short of Wall Street’s expectations of $2.65 per share, while net sales of $8.63 billion also missed analysts’ estimates of $8.67 billion.
Despite the challenges, CFO Jeff Davis expressed optimism about the company’s growth initiatives and early progress in business transformation efforts. Dollar Tree expects sales for the year to range between $31 billion and $32 billion.
The closures signal a shift for Dollar Tree as they navigate through a challenging retail landscape and strive to enhance their financial performance. The company remains committed to improving its operations and addressing market pressures as they work towards a successful future in the industry.
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