Topline
Shares of Dollar Tree dropped 14% Wednesday after the company announced tough fourth-quarter earnings and said it would shutter 1,000 of its stores, marking the discount retailer’s worst day in more than six months.
Key Facts
Shares of Dollar Tree fell 14.4% Wednesday following an early-morning announcement of a lackluster fourth quarter.
Wednesday marked Dollar Tree’s worst day on Wall Street since August 24, when shares dropped nearly 13%, amid stubbornly high inflation and on the heels of another disappointing quarterly financial report that found many cash-strapped consumers had slashed their spending to food and other basic necessities.
Big Number
$1.71 billion. That’s how much Dollar Tree reported in losses in its fourth quarter, according to Wednesday’s announcement. The year before, Dollar Tree reported a profit of $452.2 million. Fourth-quarter sales rose about 12% year-over-year to $8.63 billion.
Key Background
Dollar Tree announced Wednesday it planned to close 600 Family Dollar stores in the first half of fiscal 2024, and another 370 Family Dollars and 30 Dollar Trees when their leases expire over the next several years. Dollar Tree currently operates more than 16,700 stores in the U.S. and Canada and offers a retail option for low-income customers. The company acquired Family Dollar almost a decade ago, and the subsidiary has struggled since then. In addition to the recent earnings trouble, the company has also faced multiple fines over safety concerns in its stores. Last month, the Justice Department ordered Dollar Tree to pay a $41.7 million fine after Family Dollar pleaded guilty to holding food, drugs, cosmetics and other items in “insanitary” conditions at a rodent-infested distribution center in Arkansas.