Family Dollar Stores Inc. will be closing 370 under-performing stores later this year, cutting jobs, and slashing prices on 1,000 products after its profit for the second quarter plunged more than 30 percent, Los Angeles Times reported.
The North Carolina retail chain, which caters to a lower income community, reported sales to have gone down 3.8 percent at stores that have been open for at least a year. Same-store sales are expected to decline this quarter too, Reuters reported.
In the next fiscal years, up to 350 to 400 store openings will also be curbed by the retailer. Around 525 stores are set to be inaugurated by the company this year.
The company has been struggling to keep up with its rivals for some years. Prices will be cut down for 1,000 basic items in order to remedy that, Chief Executive Howard Levine said in a statement.
"Family Dollar, which operates 8,100 stores across the United States, also said it would close 370 weak performing stores, and slow its expansion of new stores," Reuters reported. "The job cuts and store closures are expected to reduce annual operating costs by $40 million to $45 million beginning third quarter of fiscal 2014, the company said."
Frozen food and tobacco products were two profitable purchases with strong sales for Family Dollar.
Although analysts were expecting $2.77 billion in overall sales in the second quarter, it dropped down 6.1 percent to $2.72 billion, according to Thomson Reuters I/B/E/S.
Net income was $168.9 million, or $1.47 per share, down from $220.4 million, or $1.90 per share, Reuters reported.
Family Dollar shares were down 3.4 percent in premarket trading. (Click here for the latest quote.)