Dollar Tree (DLTR) released its earnings report for the fourth quarter, which showed a loss of $1.71 billion.

The report released on Tuesday and shocked stakeholders and industry experts who had not anticipated such drastic loss of revenue. Dollar Tree has decided to close approximately 1,000 stores as a result.

The closures will start with 600 stores in 2024’s first fiscal half. That will be followed by 370 more stores that have leases expiring within a few years from now. The downsizing is an attempt to recoup losses, and Dollar Tree expects that it will gain 15 cents per share for the action.

After the earnings report news broke, Dollar Tree’s stock fell 15% on Tuesday just before the close of trading. The stock remains down today and will likely have a tough time recovering. For the last three months, Dollar Tree has lost $7.85 per share.

What makes the massive loss of revenue so startling is that the company was able to earn $452 million last year, and its stock climbed by $2.04 a share in 2023 as well. The company has taken a goodwill impairment charge of $1,07 billion.

Dollar Tree’s Future Plans

Dollar Tree expects that it will turn things around very soon. A large portion of its loss came from insurance claims, and the poor in-store revenue was simply not able to compensate for the massive expenditure.

For 2024, the company expects to earn around $31 billion, with more than $7.5 billion in earnings the first quarter. If the chain can manage that, they should be able to turn their fortunes around.

The company has more than 16,700 stores in the US and Canada, so losing 600 should only make a small dent in their overall earnings potential. The Nasdaq Composite (which tracks Dollar Tree) fell 0.41% Wednesday. Dollar Tree is not the biggest loser on the index for the day, but it did contribute to the Nasdaq Composite falling after yesterday’s gains.