Mar. 13, 2024 "Dollar Tree to close 1,000 stores in bid to shore up profits": Today I found this article by Bloomberg:
(Bloomberg) -- Dollar Tree Inc. plans to shutter about 1,000 stores in an effort to improve profitability as the discount retailer battles a spate of litigation and other headwinds.
The company expects to close about 600 Family Dollar stores in the first half of fiscal 2024 and shut down an additional 370 Family Dollar and 30 Dollar Tree locations as their leases expire, according to a statement Wednesday. Dollar Tree said it expects a benefit of 15 cents a share to 2024 earnings from the store closures.
The shares fell as much as 14% at the open of US markets, the most since May.
Dollar Tree, which operated more than 16,770 stores across 48 states and Canada as of last month, said last year that it would review its portfolio of Family Dollar stores to address underperformance.
The chain has been beset by complaints of miserable working conditions, and fourth-quarter adjusted earnings of $2.55 a share included an impact of about 17 cents a share from general liability insurance claims.
Closing the stores appears to be “a prudent decision, but echoes the move to close 400 stores in 2019,” Bloomberg Intelligence analysts Jennifer Bartashus and Jibril Lawal said in a note.
“Nearly $2 billion in assorted impairment charges suggests widespread efforts to improve operations have had mixed results and that the right formula remains elusive.”
The earnings for the quarter that ended in February missed analysts’ average estimate of $2.66 a share. Same-store sales rose 3%, more than Wall Street expected.
(Updates shares.)
©2024 Bloomberg L.P.
https://www.bnnbloomberg.ca/dollar-tree-to-close-1-000-stores-in-bid-to-shore-up-profits-1.2046199
Mar. 14, 2024 "Dollar Tree is closing nearly 1,000 U.S. stores a decade after 'botched' acquisition": Today I found this article on CBC:
Dollar Tree swung to a surprise fourth-quarter loss and will close nearly 1,000 U.S. stores after slashing the value of a rival chain it acquired almost a decade ago.
Dollar Tree plans to close about 600 Family Dollar stores in the first half of this year, along with 370 Family Dollar and 30 Dollar Tree stores over the next several years.
The decision to close the stores came following a portfolio review "to identify and address underperforming stores and invest in improved store standards and growth," a spokesperson for Dollar Tree told CBC News in a statement.
The changes impact the company's U.S. stores. Canadian stores were not part of the review, the spokesperson said.
The discount retailer acquired Family Dollar for more than $8 billion US in 2015 after a bidding war with rival Dollar General, but it has had difficulty absorbing the chain.
On Wednesday, Dollar Tree said that it would record a $950 million US impairment against the trade name Family Dollar, on top of a $1.07 billion goodwill charge.
Family Dollar will spend more than $594 million closing or rebranding stores, essentially erasing profits from the holiday season.
Family Dollar acquisition 'nothing but hassle': analyst
"This dramatic cull is the coup de grâce in the rather botched acquisition of the Family Dollar chain, which has caused Dollar Tree nothing but hassle since it was completed back in 2015," wrote Neil Saunders, managing director of GlobalData.
"Basically, almost 10 years on, Dollar Tree is still sifting through the mess it inherited and has not been able to completely turn around," Saunders said.
Saunders said in an emailed statement that nearly 12 per cent of current Family Dollar stores will be closing over the next three years.
Shares of Dollar Tree tumbled more than 14 per cent Wednesday. For the three months ending Feb. 3, Dollar Tree lost $1.71 billion US, or $7.85 per share. A year earlier, the Chesapeake, Va., company earned $452.2 million US, or $2.04 per share.
Revenue climbed to $8.64 billion US from $7.72 billion, a bit below Wall Street's estimate of $8.67 billion.
Dollar Tree has been attracting consumers who have been stung by inflation as they seek to cut spending.
During the quarter, sales at Dollar Tree stores open for at least a year climbed 6.3 per cent, with traffic up 7.1 per cent. While more shoppers were heading to stores, they were closely watching how much they spent, with the average transaction down 0.7 per cent.
With files from CBC's Jenna Benchetrit and Shawn Benjamin
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