Chesapeake, Va. – Dollar Tree Inc. did some house cleaning during the first quarter, closing nearly 57% of the 970 Family Dollar units it plans to shutter by the end of the fiscal year.
As part of its Q1 reporting this morning, the hard discount retail company announced that as of May 4, it had closed approximately 550 stores. It expects to close an additional 150 stores by the end of fiscal 2024.
During the quarterly, the company also opened 116 new Dollar Tree and 41 new Family Dollar stores. In addition, it converted 926 Dollar Tree stores to in-line multi-price format.
See also: Family Dollar on the block for 2nd time in 9 years
“At Dollar Tree we remain focused on rapidly rolling out our next generation of multi-price stores and at Family Dollar we are taking the steps necessary to position the business for long-term success,” said Rick Dreiling, chairman and CEO.
Consolidated net sales increased 4.2% to $7.63 billion. Consolidated same-store net sales increased 1.0%, driven by a 2.1% increase in traffic, offset by a 1.1% decrease in average ticket.
Dollar Tree same-store net sales increased 1.7%, driven by a 2.8% increase in traffic, offset by a 1.1% decrease in average ticket.
Family Dollar’s same-store net sales increased 0.1%, driven by a 0.9% increase in traffic, offset by a 0.8% decrease in average ticket. Same-store net sales results for the Family Dollar segment do not include any stores that were closed during the first quarter as part of the corporation’s previously announced plans to put more than 1,000 stores on the chopping block.
Gross profit increased 5.3% to $2.35 billion and gross margin expanded 30 basis points to 30.8%. Gross margin expansion was driven primarily by a decrease in freight costs, partially offset by a higher mix of lower-margin consumables sales, and higher shrink.
Net income was essentially flat at $300.1 million and diluted earnings per share were $1.38.
“Our operating performance was solid despite a soft Easter season for Dollar Tree. The results reflect our operating discipline and careful expense management throughout the quarter,” said CFO Jeff Davis.
Dollar Tree Inc. incurred losses totaling $117.0 million by the end of the quarter related to the April 28 destruction of its distribution center in Marietta, Okla. by a tornado. None of the inventory at the facility was salvageable.