MATTHEWS, N.C. - Family Dollar Stores (FDO) says it will be cutting jobs and closing about 370 underperforming stores as it looks for ways to improve its financial performance.
The discount chain says it will also cut prices on about 1,000 basic items. The company's stock fell more than 3 percent in Thursday premarket trading.
"Our second quarter results did not meet our expectations," Family Dollar CEO Howard Levine said in a statement. "The 2013 holiday season was challenged by a more promotional competitive environment and a more financially constrained consumer. In addition, like many retailers, our second quarter results were significantly impacted by severe winter weather, which resulted in numerous store closings, disrupted merchandise deliveries and higher than expected utility and store maintenance expenses."
The announcement came as Family Dollar reported its profit and revenue declined in the second quarter as it dealt with bad winter weather. The retailer said the store closings and job cuts should lower annual operating expenses by $40 million to $45 million, starting with the fiscal third quarter.
Family Dollar has more than 8,100 stores in 46 states. The Matthews, N.C., company says it will also slow new store openings beginning in fiscal 2015 to bolster its return on investment.