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Dollar Tree to Shutter 970 Family Dollar Stores
Dollar Tree missed market expectations for holiday-quarter sales and profit on Wednesday and announced plans to shutter 970 of its Family Dollar stores, as the retailer looks to revamp the struggling business, reported Reuters. The company posted a $1.71-billion loss for the quarter ending Feb. 3, compared to a $452.2-million profit in the year-ago period.
Shares of the Chesapeake, VA-based company fell about 14% in early trading after it also projected 2024 sales and profit below expectations.
Dollar stores have struggled following a shift in consumer spending to lower-margin essentials from higher-margin discretionary goods, Reuters reported. Competition from rivals such as Walmart and Chinese e-commerce platform Temu is another headwind.
“Our biggest problem right now is getting enough merchandise into the stores fast enough so the consumer can respond,” said CEO Rick Dreiling, adding that Family Dollar was continuing to be hurt by macroeconomic uncertainties.
The company, which operates around 16,774 stores, said it would close about 600 Family Dollar stores in the first half of fiscal-year 2024 and 370 more over a period of a few years, along with 30 Dollar Tree outlets, as their lease terms expire.
- ◦Lease
