Dollar Tree fell short of market expectations for holiday-quarter sales and profit on Wednesday, announcing plans to close 970 of its Family Dollar stores as part of efforts to revamp the struggling business, as reported by Reuters. The company reported a $1.71 billion loss for the quarter ending Feb. 3, a significant decline from the $452.2 million profit in the same period the previous year.
Following this announcement, shares of the Chesapeake, VA-based company plummeted approximately 14% in early trading, further dampened by its projection of 2024 sales and profit below expectations.
According to Reuters, dollar stores have faced challenges due to a shift in consumer spending towards lower-margin essentials rather than higher-margin discretionary goods. Additionally, competition from rivals like Walmart and the Chinese e-commerce platform Temu continues to pose a significant challenge.
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