Dollar Tree to Shutter Almost 1,000 Stores After Posting 4th Quarter Loss

Dollar Tree announced this week it was closing nearly 1,000 stores, the bulk of the locations being under the Family Dollar banner.

The company’s report for Q4 of 2023 released on Wednesday stated: “During the fourth quarter of fiscal 2023, the company announced that it had initiated a comprehensive store portfolio optimization review which involved identifying stores for closure, relocation or re-bannering based on an evaluation of current market conditions and individual store performance, among other factors. As a result of this review, we plan on closing approximately 600 Family Dollar stores in the first half of fiscal 2024. Additionally, approximately 370 Family Dollar and 30 Dollar Tree stores will close over the next several years at the end of each store’s current lease term. In the fourth quarter of 2023, we incurred $594.4 million of charges in connection with the store portfolio review. Additionally, we incurred a goodwill impairment charge of $1.07 billion and a trade name intangible asset impairment charge of $950 million. Details of these charges are provided in the Reconciliation of Non-GAAP Financial Measures at the end of this release.”

These expenses are also accompanied by nearly $42 million in penalties that Dollar Tree incurred following a settlement in February with the Justice Department in regards to a rat infestation at a Family Dollar distribution facility in Arkansas, according to Axios.

Dollar Tree acquired Family Dollar for $8 billion in 2015 but has been having problems absorbing the banner, according to NPR. Industry media quoted GlobalData managing director Neil Saunders’ assessment of the news: “Basically, almost ten years on, Dollar Tree is still sifting through the mess it inherited and has not been able to completely turn around.”