Dollar Tree may shake up its store offerings once again.
The discount giant revealed along with its Q1 2024 earnings that it is exploring “strategic alternatives” for its Family Dollar stores.
Those alternatives may include a sale of Family Dollar, spinning the stores off, or some other disposition of the chain. In 2015, Dollar Tree bought its then-competitor Family Dollar for $8.5 billion. However, in recent years, its Family Dollar stores have faced economic headwinds.
Earlier this year, Dollar Tree announced it would close about 970 underperforming Family Dollar stores. In March, CNBC reported that Dollar Tree owned 16,774 Dollar Tree and Family Dollar stores.
Now Dollar Tree has announced that it could jettison the struggling discount chain.
“Our goal is to position both the Dollar Tree and Family Dollar banners to progress further and faster, and to determine whether the exclusive attention of a dedicated team will benefit both, while creating value for Dollar Tree shareholders and other stakeholders,” said Rick Dreiling, chairman and CEO of Dollar Tree.
No definite plans yet
However, it is important to note that Dollar Tree has made no commitments to divest itself of its Family Dollar brand. Its press release states that there is no deadline or timetable for its explorations of strategic alternatives for Family Dollar and that “there can be no assurance that this process will result in any transaction or particular outcome.”
Still, Dollar Tree seems to be on a tear as of late when it comes to rejuggling its store footprint. On May 29, the company announced that it had acquired the designation rights for the lease of 170 99 Cents Only Stores across Arizona, California, Nevada, and Texas. 99 Cents Only entered Chapter 11 bankruptcy in April.
“As we continue to execute on our accelerated growth strategy for the Dollar Tree brand, this was an attractive opportunity to secure leases in priority markets where we see strong profitable growth potential,” Dollar Tree’s COO Michael Creedon Jr., said at the time.
Dollar Tree is expected to open its own branded stores in those locations as early as this fall.
For its Q1 2024, Dollar Tree brought in $7.63 billion in net sales––a rise of 4.2% from the same period a year before. For its Q2, the company expects to bring in between $7.3 billion and $7.6 billion, a rise of 2% to 4% for its Dollar Tree stores. However, net sales at its Family Dollar stores are expected to still remain flat.