Dollar Tree to sell 330 Family Dollar stores; misses on Q1 results

May 21, 2015 | By Dan Berthiaume

Chesapeake, Va. – Dollar Tree Inc. plans to sell about 330 Family Dollar stores to obtain Federal Trade Commission (FTC) approval of its pending $8.5 billion acquisition of Family Dollar Stores.

The company has not identified the buyer, the sale amount or which stores will be closed. The 330 Family Dollar stores represent about $45.5 million in operating income, according to Dollar Tree. Dollar Tree expects the Family Dollar purchase to go through in July 2015.

Dollar Tree announced its Family Dollar store sale plans as part of its first quarter fiscal 2015 earnings report. The retailer missed Wall Street expectations for both profit and revenue, with net income falling 50% to $69.5 million from $138.3 million a year earlier. Acquisition-related costs associated with the pending merger with Family Dollar and higher payroll costs drove the reduction in net income.

Consolidated net sales increased 9% to $2.18 billion, from $2 billion. Same-store sales rose 3.4%.

“Customers are shopping with us more often and they are buying more on each visit,” said Bob Sasser, CEO. “Our performance continues to validate that Dollar Tree is part of the solution for millions of customers seeking great values for their hard-earned dollars.”

Looking ahead, Dollar Tree estimates consolidated net sales for the second quarter of 2015 to range from $2.17 billion to $2.23 billion, based on a low to low-mid single-digit increase in same-store sales and 8% square footage growth. Consolidated net sales for full-year 2015 are now expected to range from $9.24 billion to $9.42 billion, based on a low to low-mid single-digit increase in same-store sales, and 7.3% square footage growth.