Latest news with #MichaelCreedon
Yahoo
04-06-2025
- Business
- Yahoo
Dollar stores are seeing higher-income shoppers rush in the door. It's a warning sign for the US economy.
Dollar store chains have seen higher-income shoppers flock to the stores in recent months as economic uncertainty surges and households look to save. "Higher income customers have been a meaningful growth driver for us," Dollar Tree (DLTR) CEO Michael Creedon told investors, specifically noting the chain saw an increase in customers with household incomes of more than $100,000. The company reported that same-store sales rose 5.4% in the first quarter, with improvement across all income levels. Earlier this week, Dollar General (DG) told investors it "saw the highest percent of trade-in customers" than it had in the last four years during the first quarter. Its CEO, Todd Vasos, said the company saw increased trade-in activity, or consumers who would typically shop at higher-cost competitors, from middle- and high-income consumers, who came to Dollar General instead. Its same-store sales grew 3.4% in the quarter. Data from shows that foot traffic to both retailers surged in April as some tariffs went into effect. Read more: What Trump's tariffs mean for the economy and your wallet The rise in shoppers turning to dollar stores and other discount retailers comes as evolving trade policy has created heightened economic anxiety among both consumers and businesses. A new report from ADP out Wednesday showed US private payrolls slowed significantly last month. "The weak numbers we're seeing now does not point to a labor market that's collapsing, but there is hiring hesitancy," ADP chief economist Nela Richardson told reporters on a call. Consumer confidence has also waned in recent months. It rose in May for the first time all year. PwC's Ali Furman told Yahoo Finance that while consumers showed "some resilience" month over month, they made more "discerning purchases." Dollar General expects its momentum to continue, as Vasos told investors, "Depending on where the macro environment goes, it should be very conducive to further trade-in, possibly as we move forward." Both dollar store chains tend to outperform when a weaker consumer and overall economy persist. When inflation hit 40-year highs in 2022, Dollar General and Dollar Tree stocks surged. Dollar Tree shares reached a record in April of that year, while Dollar General shares topped out in November. Year to date, Dollar General and Dollar Tree shares have handily outperformed the S&P 500 (^GSPC) — rising 45% and 18%, respectively — as well as larger rivals like Walmart (WMT) and Target (TGT), with the former calling out higher-income shoppers visiting more frequently in recent quarters. The S&P 500 is up about 1.8% this year, while Walmart stock has gained just less than 11%. Target shares are down almost 30%. Over the past year, however, both dollar store giants remained laggards, with shares down more than 20%. Tariff uncertainty may be getting more customers in the door, but the story isn't all positive for Dollar Tree. Dollar Tree stock fell as much as 10% in trading on Wednesday as the company outlined a profit hit on rising costs as a result of tariffs. The company now expects its second quarter adjusted earnings to be down as much as 50% compared to a year ago, before reaccelerating in the third quarter and fourth quarter, due to tariffs and the sale of Family Dollar. Overall, direct imports make up 41% to 43% of Dollar Tree's total retail value purchases, and China supplies the majority of those imports, per a company filing. When an analyst on the company's earnings asked how important China was to the company, Creedon said, "Global sourcing is critical." In the quarter, Dollar Tree's inventory increased 10%, or $247 million, to $2.7 billion due to "higher mark-on and inventory receipts as we expanded our multi-price assortment," CFO Stewart Glendinning said. Dollar Tree does expect strong customer traffic, however, with same-store sales expected to rise "towards the higher end" of its 3%-5% full-year outlook. Dollar Tree also updated its adjusted diluted earnings outlook and now expects to end the fiscal year in the range of $5.15 to $5.65, compared to the previously projected range of $5.00 to $5.50. Dollar General also raised its earnings forecast on Tuesday. The company now sees full-year adjusted earnings coming in between $5.20 and $5.80 per share, up from a range of $5.10 to $5.80. After a 15% rally on Tuesday, Dollar General stock was down about 1.5% in sympathy with Dollar Tree's slide on Wednesday. Dollar General's exposure to tariffs is much lower than its rival's, as 80% of its sales are food items, most of which are nonperishable items made in the US, like canned soups, beans, and chips, Morningstar analyst Noah Rohr previously told Yahoo Finance. Dollar General also directly imports less than 10% of what it sells, with less than 70% of that coming from China, Telsey Advisory Group analyst Joe Feldman wrote in a note to clients. Indirectly, the company imports roughly 10%-18% of items, with less than 40% of those coming from China, Feldman added. Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@ Click here for all of the latest retail stock news and events to better inform your investing strategy Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
USA Today
23-04-2025
- Business
- USA Today
Dollar Tree earnings call reveals sale of Family Dollar, expansion of stores
Dollar Tree earnings call reveals sale of Family Dollar, expansion of stores Dollar Tree is selling off its Family Dollar stores for about $1 billion in a move the company says strengthens both companies – and lets Dollar Tree focus on growth. Private equity firms Brigade Capital Management and Macellum Capital Management will purchase Family Dollar, the companies announced Wednesday; Dollar Tree estimated about $804 million in net proceeds from the sale, which it expects to close by June 2025. Dollar Tree, which acquired Family Dollar in 2015 for about $9 billion, began considering a sale or spinoff of Family Dollar in June 2024 as a way to restructure the company amid a challenging retail climate with inflation and competition from big-box retailers such as Walmart and online retailers including Amazon, Shein and Temu. Dollar Tree closed about 600 Family Dollar stores in 2024 and had plans to close another 370 – along with 30 Dollar Tree stores – when the leases came up on on those locations. CEO Michael Creedon, who moved from chief operating officer to interim CEO and then CEO during Dollar Tree's restructuring in recent months, said the separation from Family Dollar puts Dollar Tree in position to "achieve its full potential," in a call with investment analysts Wednesday. 'We will continue to grow and optimize our Dollar Tree business to maximize value for Dollar Tree associates, customers, and shareholders with an enhanced focus on compelling initiatives, including our expanded assortment, significant planned new store openings across the United States, and transactions that advance our growth strategy," Creedon said in a press release announcing the Family Dollar sale. Store closings: 27 Kohl's stores are set to close Saturday. See list of the closures in 15 states Dollar Tree adding, upgrading stores Dollar Tree, which has 2,900 Dollar Tree stores after opening 525 during the past year, expects to open about 300 new stores in 2025, Creedon said. The discount retailer is also upgrading stores to handle items priced as high as $7. Among stores being upgraded are some among the 170 leases of 99 Cents Only Stores in Arizona, California, Nevada, and Texas acquired in May 2024. About 1,000 combination Family Dollar-Dollar Tree stores will be sold in the deal. Dollar Tree reported net sales of $5 billion – excluding sales from Family Dollar stores – a 2% increase in same-store sales during the three-month period ending Feb. 1, 2025. Store traffic in Dollar Tree stores rose 0.7% and shoppers spent 1.3% more per total purchase. Total fourth quarter sales including from Family Dollar were $8.26 billion, which surpassed the $8.23 billion estimated by analysts polled by S&P Global Market Intelligence. Dollar Tree CEO on higher-income shoppers: 'Everybody's hurting' Traditionally, middle-income shoppers account for about half of Dollar Tree customers, Creedon said. However, increased traffic and sales is being driven in part by "stronger demand from higher-income customers who increasingly see Dollar Tree as a cost-effective source for an expanding range of products," he said. Lower-income customers "need us particularly to make their wallet go farther, in between paychecks," Creedon said. But during "this inflationary environment, all shoppers across all income cohorts, including the higher income, is finding Dollar Tree as part of their solution," he said. "It doesn't matter how much money you make everybody's hurting right now." Tariffs could lead to some higher prices at Dollar Tree Dollar Tree had "mitigated" the effects of the first round of tariffs levied on products from China by about 90%, through negotiations, changing product specifications and buying from suppliers in different countries. But higher prices could be an option depending on how future tariffs on goods from Mexico and Canada play out, Creedon said. For instance, he said, "we're the best in the nation for prayer candles. They're made in Mexico and so we want to make sure we can still offer them. So we will look at targeted pricing on things like that." Dollar Tree's break with Family Dollar marks the end of a costly merger it hoped would bolster it against competitors such as Dollar General, which also bid on Family Dollar at the time. Family Dollar stores had also been hit with some issues over the past two years including a 2023 recall of products including toothpaste, pain relievers and other over-the-counter medicines that had been stored improperly, but were shipped to stores. In 2024, Family Dollar agreed to pay the Justice Department $41.6 million for storing food, cosmetics, drugs and medical devices in a rat-infested warehouse in Arkansas for several years, court records show. "It is truly 'addition by subtraction' as Family Dollar had been a consistent weight on topline performance, margin rate, and management time," Evercore analyst Michael Montani told Reuters. Dollar Tree shares, which had been down 11% so far this year, were up more than 9% in early trading Wednesday. Contributing: Emily DeLetter, Jonathan Limehouse and Anthony Robledo of USA TODAY, Reuters. Follow Mike Snider on Threads, Bluesky and X: mikegsnider & @ & @mikesnider. What's everyone talking about? 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Yahoo
08-04-2025
- Business
- Yahoo
‘Everybody's hurting': Even high-income shoppers are turning to Dollar Tree as consumer behavior shifts
The CEO of Dollar Tree believes tough times are driving sales at the discount giant — which operates both Dollar Tree and Family Dollar. Reporting on the quarter that ended in February, CEO Michael Creedon noted a year-over-year increase in both foot traffic (0.7%) and average transaction (up 1.3%). I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) Here are 3 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? He said while lower-income and middle-income families continue to be the stores' 'bread and butter,' there's been an uptick in business from higher-income households. 'It doesn't matter how much money you make, everybody's hurting right now,' Creedon said in an earnings call in late March. While wages have kept pace with inflation, many consumers feel the pinch of rising costs and are changing their behavior — whether it's shopping at discount stores more often or eating out less often. McDonald's CEO Chris Kempczinski reports a drop in sales at the fast-food juggernaut as higher prices force families to tighten their belts. Read more: Trump warns his tariffs will spark a 'disturbance' in America — use this 1 dead-simple move to help shockproof your retirement plans ASAP With President Trump's tariffs causing chaos in the stock market leading many economists to warn of additional price increases, Americans will have to tighten their belts even more.. You can follow the lead of the high-income shoppers that are turning to discount stores like Dollar Tree for some of their purchases. Here are some additional cost-saving tips: Track your spending to eliminate unnecessary expenses. Use coupons, buy in bulk and plan meals around what's on sale at the grocery store. Pay down debt and shore up your emergency fund to be better prepared for a recession or a round of layoffs. Consider setting up automated savings to have an extra cushion in your bank account for future price shocks. What not to do? Don't stop investing, even amid stock market chaos and even if the market sees further declines. Economic downturns can be a good time to get into the market as shares of stocks and ETFs are relatively low. If you buy and hold stable investments like S&P 500 index funds, your investments are likely to perform well over time. You might want to talk to a financial adviser to review your goals and adjust your strategy for the current economic climate. By taking these steps, hopefully you'll be able to continue to thrive despite the tough economy that the CEOs of Dollar Tree and McDonald's are talking about. Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Cost-of-living in America is still out of control — and prices could keep climbing. Use these 3 'real assets' to protect your wealth today, no matter what Trump does This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Sign in to access your portfolio
Yahoo
28-03-2025
- Business
- Yahoo
As inflation looms, brands have to work harder for loyalty
This story was originally published on CX Dive. To receive daily news and insights, subscribe to our free daily CX Dive newsletter. Amid economic pressures and tariff uncertainty, consumers are reassessing their shopping choices and showing less loyalty to brands, according to the EY Future Consumer Index released Wednesday. EY surveyed 20,000 consumers across 26 countries. Price sensitivity was the No. 1 purchase consideration for 4 in 5 consumers globally. More than half of consumers are very concerned about rising living costs. 'The survey findings tell us it's simply not enough to be just good enough,' said Rob Holston, EY Global and Americas consumer products sector leader, 'Brand loyalty is in the balance and consumers aren't just buying names anymore — they're buying value, quality, purpose and performance. Consumers are concerned about the economy, and as prices rise, they want more from brands to earn their loyalty. Anxiety about the economy is widespread. In addition to the EY survey, the Conference Board found that consumer expectations hit a 12-year low in March as expectations for employment, personal income and business environment over the next six months dropped. More than three-quarters of consumers are changing their purchase behavior in response to price increases, the EY survey found. In many cases, consumers are moving away from brand names. About one-third of consumers say they no longer consider brands when making purchase decisions. About two-thirds say private label items are just as good as branded products, and just over half only buy branded products when they are on sale. On an earnings call Wednesday, Dollar Tree said the inflationary environment had led to increased traffic at the discounter's stores. 'What's been most interesting is this time around, this inflationary environment, all shoppers across all income cohorts, including the higher income, is finding Dollar Tree as part of their solution,' Dollar Tree CEO Michael Creedon said. 'We believe it doesn't matter how much money you make, everybody is hurting right now.' Though consumers are widely prioritizing prices over brand loyalty, all is not lost for loyalty: Two-thirds of respondents say they still value brands. But consumers have higher expectations for value, trust and relevance. Among customers who have left a brand for another, about half say they would return to a premium branded product if it offers better quality or performance, and one-third say they would return for better value. As prices rise, consumers want more value for what they're paying. Customer experience can be a differentiator, Mario Matulich, president of Customer Management Practice, told CX Dive earlier this month. 'Those that are prioritizing CX as a primary offering, as a major piece and a foundational piece of their value proposition, those organizations are a position to gain market share in the in the next interim period where [inflation] may be the case, where prices are going up,' Matulich said.
Yahoo
28-03-2025
- Business
- Yahoo
Dollar Tree's CEO Says 'Everybody Is Hurting' In Today's Economy
Dollar Tree CEO Michael Creedon said people of all economic backgrounds are shopping at Dollar Tree because they're hurting economically. Store traffic and average transaction amounts grew year-over-year in its latest quarter, according to earnings results released Wednesday. Dollar Tree is one of several retailers saying consumers are shifting their habits in an attempt to save economic worries may be good for business at Dollar Tree. People of all economic backgrounds are turning to Dollar Tree (DLTR) to stretch their budgets, CEO Michael Creedon said during a conference call on Thursday, bolstering sales and market share. The retailer's traffic increased 0.7% and the average transaction amount grew 1.3% year-over-year for the quarter ended Feb. 1, according to Dollar Tree. It "doesn't matter how much money you make, everybody is hurting right now,' Creedon said, according to a transcript made available from AlphaSense. 'The good news is: Dollar Tree and Family Dollar are a big part of that answer to what hurts.' Dollar Tree is seeing more business come from higher-income households, while lower-income shoppers need the chain to make it between paychecks, Creedon said. He said about half of Dollar Tree's shoppers are middle income, and they have traditionally shopped its stores' seasonal and holiday merchandise. 'That's our bread and butter,' Creedon said of middle-income households, according to the transcript. 'They need us to live and celebrate their lives.' Other retailers are catering to consumers' desire to save, including Dollar General (DG). Target (TGT) said late last year that it cut thousands of prices as customers grew 'increasingly resourceful.' Americans are frequenting fast-casual joints instead of sit-down restaurants and buying smaller packages at the supermarket, executives said. Walmart (WMT) has seen growth in its higher-income clientele. Dollar Tree said today that it estimates bringing in more than $800 million for selling Family Dollar to private-equity firms. Dollar General shares recently up nearly 3%. Read the original article on Investopedia Sign in to access your portfolio
