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Family Dollar to close 370 stores; Q2 sales, earnings down

Family Dollar Stores said Thursday that it would close 370 underperforming stores and slow plans for new store growth as sales and earnings plunged during the fiscal second quarter.

Jon Springer, Executive Editor

April 10, 2014

2 Min Read
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Family Dollar Stores said Thursday that it would close 370 underperforming stores and slow plans for new store growth as sales and earnings plunged during the fiscal second quarter.

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The Matthews, N.C.-based discounter also said it would make a "significant investment" to lower prices on 1,000 items in stores and would move to reduce costs through layoffs at corporate headquarters. The company said sales for the quarter ended March 1 declined by 6.1% to $2.7 billion, while same-store sales fell by 3.8%. Gross profits were down 6.7% to 33.2% of net sales; and net earnings decreased by 35.1% to $90.9 million. The company said a highly promotional holiday season, constrained consumer spending and poor weather affected results.

"Notwithstanding the macro-economic pressure, competitive environment and severe weather, we are not satisfied with our results, and we hold ourselves accountable for improving our performance,” Howard Levine, chairman and CEO, said in a statement. “To that end, we have initiated an in-depth business review to identify opportunities to strengthen our value proposition, increase operational efficiencies and improve financial performance.”

Family Dollar said the workforce reduction efforts and store closures are expected to result in $40 million to $45 million of annualized operating profit benefit, beginning in the third quarter of fiscal 2014. In 2015, Family Dollar will reduce the pace of new store growth from a planned 525 this year to 350 to 400 next year.

 

About the Author

Jon Springer

Executive Editor

Jon Springer is executive editor of Winsight Grocery Business with responsibility for leading its digital news team. Jon has more than 20 years of experience covering consumer business and retail in New York, including more than 14 years at the Retail/Financial desk at Supermarket News. His previous experience includes covering consumer markets for KPMG’s Insiders; the U.S. beverage industry for Beverage Spectrum; and he was a Senior Editor covering commercial real estate and retail for the International Council of Shopping Centers. Jon began his career as a sports reporter and features editor for the Cecil Whig, a daily newspaper in Elkton, Md. Jon is also the author of two books on baseball. He has a Bachelor of Arts degree in English-Journalism from the University of Delaware. He lives in Brooklyn, N.Y. with his family.

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