On Wednesday, Dollar Tree revealed its financial statistics for the fourth quarter, which provided insight into the varied performances of its retail locations. The end result is that about 1,000 Family Dollar businesses around the country would be closing their doors.
About 600 Family Dollar stores will be shuttered in the first half of fiscal-year 2024, with another 370 set to follow in a few years. Thirty Dollar Tree outlets will also be let go as their leases expire. The firm runs roughly 16,774 stores.
Overall, the enterprise increased by 3.0%, with Dollar Tree seeing a 6.3% boom in same-store net sales and Family Dollar seeing a 1.2% fall. There was a 7.1% increase at Dollar Tree and a 0.7% increase at Family Dollar in the number of compatible transactions.
A portfolio optimization review charge of $594.4 million, a goodwill impairment charge of $1.07 billion, and a trade name intangible asset impairment charge of $950 million were among the significant charges that contributed to the company’s diluted loss per share of $7.85. Adjusted earnings per share were $2.55, with general liability claims accounting for 17 cents.
Along with the results, Dollar Tree said that 600 Family Dollar locations will be closed in the first half of 2024 and another 370 stores will have their leases expire.
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The scheduled shutdown locations have been requested by Fast Company, but they have not yet received a response.
Forecasts for fiscal 2024 show that Dollar Tree expects net sales of $31–$32 billion and diluted earnings per share (EPS) of $6.70–$7.30. CEO Rick Dreiling highlighted the company’s continuous transformation efforts by expressing pleasure with favorable traffic patterns and market share increases. Despite difficulties caused by general liability claims, CFO Jeff Davis highlighted solid core operating performance.
The expansion of $3 and $5 retail selections in Dollar Tree stores, as well as frozen and refrigerated items in both Dollar Tree and Family Dollar, were further highlights. The company opened 219 new stores in Q4, for a total of 641 for the year. Compared to the previous fiscal year, free cash flow and net cash supplied by operational operations both grew in fiscal year 2023.
Dollar Tree announced in November that it would be evaluating its Family Dollar division, with the possibility of closing underperforming stores, in an effort to resume growth.