Chesapeake, Va. — Dollar Tree Inc. (NASDAQ: DLTR) has announced a formal review of its Family Dollar business segment, including the possibility of selling, spinning off or otherwise disposing of the brand. In March, Dollar Tree announced the closure of 1,000 stores nationally, roughly 970 of which were underperforming Family Dollar stores. Additionally, Dollar Tree recently acquired designation rights for 170 former 99 Cents Only store leases.
“Dollar Tree has been on a multi-year journey to help the company fully achieve its potential,” says Rick Dreiling, chairman and CEO of Dollar Tree Inc. “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.”
Family Dollar’s same-store net sales increased 0.1 percent year-over-year in fiscal first-quarter 2024, which ended May 4. (The data does not include the previously mentioned stores that Dollar Tree closed during the first quarter.) By comparison, Dollar Tree’s same-store net sales increased 1.7 percent in the same time period.
Dollar Tree has retained J.P. Morgan Securities LLC as its financial advisor and Davis Polk & Wardwell LLP as its legal advisor to assist in the review of “strategic alternatives” for the Family Dollar brand. Dollar Tree has not set a deadline or definitive timetable for the completion of the review process and adds that “there can be no assurance that this process will result in any transaction or particular outcome.”
Dollar Tree’s stock price closed at $120.30 per share on Tuesday, June 4, down from $130.24 a year ago, a 7.6 percent decline.