Dollar Tree, one of the nation’s largest discount retailers, announced plans to close nearly 1,000 stores after reporting a surprising fourth-quarter loss. The company attributed its loss to a $1.07 billion goodwill impairment charge, causing shares to drop 15% before the opening bell on Wednesday.
The closure plans include approximately 600 Family Dollar stores in the first half of the year, as well as 370 Family Dollar and 30 Dollar Tree stores over the next few years. Dollar Tree acquired Family Dollar for over $8 billion almost a decade ago, but has faced challenges integrating the chain.
Analyst Neil Saunders noted that nearly 12% of current Family Dollar stores will be closed over the next three years. In the three months ending 3 February, Dollar Tree reported a $1.71 billion loss, or $7.85 a share, compared to a profit of $452.2 million, or $2.04 a share, a year earlier. Revenue increased to $8.64 billion from $7.72 billion, slightly below Wall Street estimates of $8.67 billion.
Despite the challenges, Dollar Tree has been successful in attracting price-conscious consumers seeking to save money amid inflation. Sales at Dollar Tree stores increased by 6.3% during the quarter, with traffic up 7.1%. The company remains committed to addressing its performance issues and improving its financial outlook in the coming years.
