Dollar Tree said Wednesday it’s closing 1,000 Family Dollar stores and posted a fourth-quarter operating loss of $1.89 billion. File Photo by Andrew Gombert/EPA

“We plan on closing approximately 600 Family Dollar stores in the first half of fiscal 2024,” Dollar Tree’s Wednesday statement said. “Additionally, approximately 370 Family Dollar and 30 Dollar Tree stores will close over the next several years at the end of each store’s current lease term.”

Dollar Tree said a fourth quarter review of its portfolio cost the company $594.4 million in charges.

That review involved identifying stores for closure, relocation or “re-bannering” based on store performance and market conditions, according to Dollar Tree.

Dollar Tree said year-to-date financial results for 2024 compared to fiscal 2023 showed profits of $9.31 billion, a 4.3% increase.

Gross margin declined 110 basis points to 30.4%.

“The decline in gross margin was driven by elevated shrink, product cost inflation, unfavorable sales mix, and higher distribution and markdown costs, partially offset by lower freight costs, sales leverage, and the impact of the 53rd week in fiscal 2023,” the company said.

Despite the fourth-quarter loss and the store closings, Dollar Tree Chairman and CEO Rick Dreiling said the company “finished the year strong, with fourth quarter results reflecting positive traffic trends, market share gains, and adjusted margin improvement across both segments.”

“While we are still in the early stages of our transformation journey, I am proud of what our team accomplished in 2023 and see a long runway of growth ahead of us,” he said.

In February Dollar Tree subsidiary Family Dollar Stores pleaded guilty to storing food, drugs, medical devices and cosmetics in a rodent-infested warehouse that shipped those products to stores in six southeastern states.

The company agreed to pay $41.675 million, the largest criminal penalty ever in a food safety case, according to the Justice Department.

In November 2021 Dollar Tree said it would raise its price point from $1 to $1.25 to cover cost increases to continue “offering extreme value to customers.”