Family Dollar to cut jobs, close about 370 stores - WJBF-TV ABC 6 Augusta-Aiken News, Weather, Sports

Family Dollar to cut jobs, close about 370 stores

Posted: Updated:
Wikimedia Commons photo Wikimedia Commons photo
MATTHEWS, NC (WFLA) -

Family Dollar plans to cut some jobs and close about 370 under performing stores as it tries to reverse sagging sales and earnings. The discount store operator will also lower prices on about 1,000 basic items.

Family Dollar did not provide details on how many jobs were expected to be eliminated.

The chain said the store closings and job cuts should reduce annual operating expenses by $40 million to $45 million, starting with the fiscal third quarter. Family Dollar Stores Inc. currently has more than 8,100 stores in 46 states.

The job cuts and store closings are estimated to result in an approximately $85 million to $95 million restructuring charge during fiscal 2014's second half.

The Matthews, N.C., company also said it will slow new store openings beginning in fiscal 2015 to bolster its return on investment. It now anticipates opening 350 to 400 new stores. In fiscal 2014 it had about 525 new stores.

The announcement came as Family Dollar reported its profit and revenue declined in the fiscal second quarter, which was hampered by bad winter weather.

Chairman and CEO Howard Levine said in a statement that the poor weather led to numerous store closings, disrupted merchandise deliveries and higher-than-expected utility and store maintenance expenses.

The quarter that ended March 1 included the critical holiday shopping season, which Levine said was "challenged" because shoppers had tighter financial constraints and rivals were more promotional.

Family Dollar reported that its net income dropped to $90.9 million, or 80 cents per share, from $140.1 million, or $1.21 per share, a year earlier. Revenue fell to $2.72 billion from $2.89 billion. Analysts surveyed by FactSet expected earnings of 90 cents per share on revenue of $2.77 billion.

Last year's quarter included one extra week.

Family Dollar said it believes the bad winter weather hurt its earnings by at least 5 cents per share.

Sales at stores open at least a year, a key gauge of a retailer's health, declined 3.8 percent. This figure excludes results from stores recently opened or closed.

Levine said the company's quarterly performance was below its expectations and that it's started a review of the business to increase operational efficiencies and boost its financial performance. Levine said the price cuts, store closings and job eliminations are part of actions it is taking immediately to lift its performance during the review.

Looking ahead, Family Dollar anticipates third-quarter adjusted earnings of 85 cents to 95 cents per share. Fourth-quarter adjusted earnings are expected in a range of 75 cents to 85 cents per share. Fiscal 2014 adjusted earnings are predicted between $3.05 and $3.25 per share.

Wall Street is calling for third-quarter earnings of 98 cents per share, fourth-quarter earnings of 84 cents per share and full-year earnings of $3.38 per share.

Shares of Family Dollar rose 48 cents to $59.55 in morning trading Thursday.

  • Don't Miss ItMore>>

  • VIDEO: Whale lifts kayakers

    VIDEO: Whale lifts kayakers

    Wednesday, July 23 2014 4:52 PM EDT2014-07-23 20:52:37 GMT
    YouTube imageYouTube image
    Dramatic video shows a 90,000 lb. whale giving kayakers a ride they'll remember forever. The video was shot by one of the kayakers and begins by showing the whale in the distance. 
    Dramatic video shows a 90,000 lb. whale giving kayakers a ride they'll remember forever. The video was shot by one of the kayakers and begins by showing the whale in the distance. 
  • Pit Bull devoted to injured Chihuahua pal

    Pit Bull devoted to injured Chihuahua pal

    Wednesday, July 23 2014 4:51 PM EDT2014-07-23 20:51:25 GMT
    Joni the Pit Bull loves Chachi the Chihuahua.  Savannah-Chatham Metropolitan Police Department Facebook photoJoni the Pit Bull loves Chachi the Chihuahua. Savannah-Chatham Metropolitan Police Department Facebook photo
    The story of a stray lab-Pit Bull mix who took care of her Chihuahua sidekick who has an injured eye is melting the hearts of people all across the country.
    The story of a stray lab-Pit Bull mix who took care of her Chihuahua sidekick who has an injured eye is melting the hearts of people all across the country.
  • Baby cakes: 'Smash' trend taking 1-year-old parties by storm

    Baby cakes: 'Smash' trend taking 1-year-old parties by storm

    Tuesday, July 22 2014 7:23 PM EDT2014-07-22 23:23:30 GMT
    Legions of parents have embraced the smash cake, a birthday party feature in which brand-new 1-year-olds are served cakes to destroy — adorably — in front of friends and family.
    Legions of parents have embraced the smash cake, a birthday party feature in which brand-new 1-year-olds are served cakes to destroy — adorably — in front of friends and family.
  • Most Viewed Stories on WFLA.com

  • Sign up for WFLA News Channel 8 Email Alerts

    * denotes required fields






    Thank you for signing up! You will receive a confirmation email shortly.
Powered by WorldNow

1336 Augusta West Parkway
Augusta, GA 30909

Telephone: 706.722.6664
Email: talkback6@wjbf.com

Can't find something?
Powered by WorldNow
All content © Copyright 2000 - 2014 Media General Communications Holdings, LLC. A Media General Company.