Family Dollar to close 370 stores amid plummeting earnings

Family Dollar (NYSE:FDO) is cutting jobs and closing 370 underperforming stores in an effort to improve earnings following disappointing sales.

Family Dollar said the job cuts and store closings should lower their annual operating expenses by between $40 million and $45 million, beginning with its fiscal third quarter. Family Dollar didn't provide details on how many jobs were expected to be eliminated as a result of the store closings.

Family Dollar reported a 35 percent drop in profit for the third quarter ended March 1.

The company will also cut back on the number of planned new locations over the next two years, to just 350 to 400 new locations. The chain opened 500 new stores in 2013 and planned to do the same in 2014. Family Dollar currently has more than 8,100 stores in 46 states.

In addition to the restructuring and closings, Family Dollar will lower prices of about 1,000 basic items to win back some of the traffic lost and increase basket size. The company reported same-store sales declined 3.8 percent, partly due to a drop to fewer customer transactions. The price drop will be the second this year, following an announcement earlier this month that the chain would be lowering prices nationwide and introducing more than 400 new food items in stores.

Family Dollar on Thursday reported that its quarterly net income dropped to $90.9 million from $140.1 million a year earlier. Revenue for the quarter fell to $2.72 billion from $2.89 billion in the year-ago period.

For more:
-See this Reuters article

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