CHESAPEAKE, VA. — Dollar Tree plans to expand freezers and coolers to accommodate more food and beverage products, and also intends to add adult beverages to its offerings in 2019, company executives said on March 6. But the company also expects to accelerate its pace of store closings during the year.
“In fiscal 2019, at Family Dollar, we plan to complete at least 1,000 store renovations and 200 rebanners,” Gary M. Philbin, president and chief executive officer of Dollar Tree, Inc., said during a March 6 conference call with analysts. “We are further accelerating store closings and expect to close as many as 390 underperforming stores. And because of age, layout, location, unfavorable lease terms or other factors, (they) are not expected to provide an adequate return on investment for the cost of renovation. Final number of actual stores closures will be affected by ongoing lease negotiations.”
Dollar Tree said it typically closes around 75 stores a year.
Kevin S. Wampler, chief financial officer, said the company expects fiscal 2019 consolidated capital expenditures to total approximately $1 billion. The expenditures will be focused on 350 new Dollar Tree stores, 200 Family Dollar stores, 1,000 Family Dollar renovations and 200 rebanners from Family Dollar to Dollar Tree. Mr. Wampler said expenditures also will include the addition of frozen and refrigerated capability at 500 new and existing Dollar Tree stores and 400 Family Dollar stores, as well as the addition of adult beverages to 1,000 stores.
Despite sluggish results in fiscal 2018, Mr. Philbin said the company benefited from the initiative to upgrade its Family Dollar private brand program.
“In Q2 of 2018, we completed the roll-out program of moving away from Family Gourmet and Family Dollar brands to introduce products under a range of private brands, including Catawba Candy, Chestnut Hill, Driver’s Choice, Tool Bench, Nature’s Measure and many others,” he said. “As a result of these improvements to our private brand program, the growth in these categories has been strong, driving both top-line sales, improved margins and customer loyalty.”
Dollar Tree sustained a loss of $1,590,800,000 in the year ended Feb. 2, which compared with income of $1,714,300,000, equal to $7.24 per share on the common stock, in fiscal 2017. Fiscal 2018 results included a $2,727,000,000 non-cash pre-tax and after-tax goodwill impairment charge.
Net sales moved up to $823,300,000 from $22,245,500,000.