Dollar Tree plans to close about 600 Family Dollar stores in the first half of this year and 370 Family Dollar and 30 Dollar Tree stores over the next several years.
A customer exits a Dollar Tree store holding a shopping bag on Wednesday, May 11, 2022, in Jackson, Miss.A customer exits a Dollar Tree store holding a shopping bag on Wednesday, May 11, 2022, in Jackson, Miss.Dollar Tree swung to a surprise fourth-quarter loss and will close nearly 1,000 stores after the discount retailer slashed the value of a rival chain it acquired almost a decade ago.
On Wednesday, Dollar Tree said that it would record a $950 million 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.
Stripping out certain items, earnings were $2.55 per share, which is still short of the per-share earnings of $2.67 expected on Wall Street, according to a survey by Zacks Investment Research. Dollar Tree has been attracting consumers that have been stung by inflation as they seek to cut spending. During the quarter, sales at Dollar Tree stores open at least a year climbed 6.3%, with traffic up 7.1%. While more shoppers were heading to stores, they were closely watching how much they spent, with average ticket down 0.7%.
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