Dollar Tree (NASDAQ:DLTR) revealed plans to shutter nearly 1,000 stores and reported an unexpected fourth-quarter loss, attributing it to a $1.07 billion goodwill impairment charge.

Shares of the discount retailer plummeted 15% before the opening bell on Wednesday.

The company intends to close approximately 600 Family Dollar stores in the first half of this year and 370 Family Dollar and 30 Dollar Tree stores over the next few years.

Dollar Tree acquired Family Dollar for over $8 billion nearly a decade ago following a bidding war with Dollar General. However, integrating the chain has proven challenging.

“This significant cull is the final blow in the somewhat botched acquisition of the Family Dollar chain, which has been a source of constant trouble for Dollar Tree since its completion in 2015,” wrote Neil Saunders, managing director of GlobalData. “Essentially, almost ten years later, Dollar Tree is still dealing with the mess it inherited and has not managed a complete turnaround,” Saunders added.

Saunders noted in an email statement that nearly 12% of current Family Dollar stores will close over the next three years.

For the quarter ending February 3, Dollar Tree reported a loss of $1.71 billion, or $7.85 per share. In the same period a year earlier, the Chesapeake, Virginia-based company had earnings of $452.2 million, or $2.04 per share.

Excluding certain items, earnings were $2.55 per share, falling short of Wall Street’s expected $2.67 per share, according to Zacks Investment Research.

Revenue increased to $8.64 billion from $7.72 billion, slightly below Wall Street’s estimate of $8.67 billion.

Dollar Tree has been attracting consumers affected by inflation as they try to reduce spending. During the quarter, sales at Dollar Tree stores open for at least a year rose by 6.3%, with traffic up by 7.1%. However, shoppers were cautious about their spending, as the average ticket size decreased by 0.7%.

At Family Dollar, sales at stores open for at least a year declined by 1.2%. While traffic increased by 0.7%, the average ticket size dropped by 2%.

For fiscal 2024, Dollar Tree expects earnings between $6.70 and $7.30 per share, with revenue projected in the range of $31 billion to $32 billion.

Analysts surveyed by FactSet anticipate full-year earnings of $7.04 per share on revenue of $31.68 billion.

Dollar Tree forecasts first-quarter earnings of $1.33 to $1.48 per share on revenue in the range of $7.6 billion to $7.9 billion.

Wall Street analysts expect first-quarter earnings of $1.70 per share on revenue of $7.68 billion.

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