Dollar Tree, after coming up short Wall Street expectations in the fourth quarter, reported it plans to close nearly 1,000 Family Dollar stores as the company looks to regain momentum in the overall business.
Net loss in the 14-week fourth quarter was $1.71 billion, or $7.85 per diluted share, versus net income of $452.2 million, or $2.04 per diluted share, in the 13-week year-earlier period. Adjusted for one-time events, net income per diluted share was $2.55 versus $2.04 in the year-prior period, the company stated.
Dollar Tree didn’t reach a Yahoo Finance-published analyst consensus estimate for earnings per adjusted diluted share of $2.65 and revenues of $8.67 billion.
Dollar Tree stores comparable sales increased by 6.3%, while those for Family Dollar declined by 1.2% versus the fiscal 2022 quarter. Comparable transactions increased by 7.1% at Dollar Tree and 0.7% at Family Dollar in the period year over year. Company comps gained 3%, with traffic up 4.6% versus the fiscal 2022 quarter.
Net sales were $8.63 billion while, with $7 million in other category contributions, net revenues were $8.64 billion versus $7.72 billion and $7.72 billion, respectively, in the year-previous quarter, including $4.5 million in other category contributions. Operating loss was $1.89 billion versus net income of $618.1 million in the year-before period, while adjusted operating income was $749.1 million versus $618.1 million.
For the full fiscal year, net loss was $998.4 billion, or $4.55 per diluted share, versus $1.62 billion, or $7.21 per diluted share, in the year-earlier period. Adjusted diluted earnings per share were $5.89 versus $7.21 in the year prior, Dollar Tree reported.
Net sales were $30.58 billion, while total revenue was $30.6 billion versus $28.32 billion and $28.33 billion, respectively, in the previous quarter. Operating loss was $881.8 million versus operating income of $2.24 billion in the year before, while adjusted operating income was $1.79 billion versus $2.24 billion.
Dollar Tree noted a portfolio optimization review has identified about 600 Family Dollar stores for closure in the first half of fiscal 2024 and about 370 additional stores for closure as their leases expire.
“We finished the year strong, with fourth-quarter results reflecting positive traffic trends, market share gains and adjusted margin improvement across both segments,” said Rick Dreiling, Dollar Tree chairman and CEO. “While we are still in the early stages of our transformation journey, I am proud of what our team accomplished in 2023 and see a long runway of growth ahead of us. As we look forward in 2024, we are accelerating our multi-price rollout at Dollar Tree and taking decisive action to improve profitability and unlock value at Family Dollar.”
