Dollar Tree missed market expectations for holiday-quarter sales and profit on Wednesday and laid out plans to shutter 970 of its Family Dollar stores, as the retailer looks to revamp the struggling business.
Shares of the company fell 14% before the bell 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. They also face stiff competition from rivals such as Walmart and Chinese e-commerce platform Temu.
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. As a result, the company took a $594.4 million charge for a portfolio optimization review and incurred a goodwill impairment charge of $1.07 billion, as well as $950 million in other asset impairment charges in the reported quarter.
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