MATTHEWS: Family Dollar to cut jobs, close about 370 stores - WNCN: News, Weather

Family Dollar to cut jobs, close about 370 stores

Posted: Updated:
No one has been arrested in the incident. No one has been arrested in the incident.
MATTHEWS, N.C. -

Family Dollar plans to cut some jobs and close about 370 underperforming 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.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  • North Carolina NewsMore>>

  • Man taken into custody after chase, standoff on I-77

    Man taken into custody after chase, standoff on I-77

    Thursday, July 31 2014 7:29 PM EDT2014-07-31 23:29:06 GMT
    The incident happened after a reported chase southbound on I-77 that ended in the Troutman area where a dump truck appears to have wrecked in the wood line near a rest stop.
    The incident happened after a reported chase southbound on I-77 that ended in the Troutman area where a dump truck appears to have wrecked in the wood line near a rest stop.
  • UNC system releases report on campus safety

    UNC system releases report on campus safety

    Thursday, July 31 2014 6:28 PM EDT2014-07-31 22:28:25 GMT
    The UNC Campus Security Initiative issued its final report Thursday, offering a comprehensive review and recommendations for improving safety and security across the 17-campus University of North Carolina.
    The UNC Campus Security Initiative issued its final report Thursday, offering a comprehensive review and recommendations for improving safety and security across the 17-campus University of North Carolina.
  • Samaritan doctor sickened with Ebola lets Charlotte missionary take serum

    Samaritan doctor sickened with Ebola lets Charlotte missionary take serum

    Thursday, July 31 2014 6:08 PM EDT2014-07-31 22:08:32 GMT
    A doctor who contracted Ebola while serving with Samaritan's Purse in Liberia took a "slight turn for the worse" on Wednesday night but is being called heroic by people around him. Dr. Kent Brantly was
    "Yesterday, an experimental serum arrived in the country, but there was only enough for one person. Dr. Brantly asked that it be given to Nancy Writebol," said Franklin Graham, president of Samaritan's Purse.
Powered by WorldNow

1205 Front St., Raleigh
N.C., 27609

Telephone: 919.836.1717
Fax: 919.836.1687
Email: newstips@wncn.com

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