The end of December should mark the end of a key transition period for the company
DOLLAR TREE continues to be in a state of change after its third-quarter results fell short of expectations.
Despite net sales increasing by 3.5% to $7.6 billion, Dollar Tree's earnings per share were just $0.67 compared to the forecasted $1.06.
But, in the earnings call, Mike Creighton the chain's interim CEO remained positive about the company's future.
He also highlighted that the chain will continue to make changes to its operations as it goes into the fourth quarter and beyond.
"Our ultimate goal remains positioning both banners for long-term success," he said of Family Dollar and Dollar Tree.
The interim CEO is confident that Dollar Tree will be able to "meaningfully grow" its operational footprint over the coming years because "value always resonates with the customer."
He attributed the chain's ability to "stand the test of time" to its value for money which has seen it continue operations since 1986.
Despite this positivity, Creighton admitted that "there is more work to be done."
He noted that one key change that is already underway at thousands of Dollar Tree stores will continue across the chain's footprint into the new year.
2,300 Dollar Tree stores out of the 16,770 locations in the US and Canada have been converted to the chain's multi-price 3.0 format.
This strategy sees the stores adopting the format offer a wider range of prices with items ranging between $1.50 and $7 without raising the price of existing products.
It is hoped to improve profitability by offering more variety and value to customers and it seems to be paying off for the discount chain.
"The converted stores produced approximately 30% of Dollar Tree's total net sales in Q3 and continue to produce comps nicely above our portfolio average," the interim CEO revealed.
Creighton added that the company plans to "convert an additional 300 to 400 stores to the 3.0 format by the end of Q4."
"A customer that walks into a typical Dollar Tree store will find over 90% of the products in the store priced at $1.25," he proudly said.
"So we offer a powerful solution for customers looking to stretch their dollar."
The Q3 results revealed that customers are increasingly tightening their belts, looking for value, and turning towards buying home-related items and no longer shopping in advance of events.
By the end of the year, the chain is set to have almost 3,000 locations operating under the 3.0 format including the majority of the former 99 Cents Only stores that the retailer bought earlier this year.
In May, Dollar Tree Inc. acquired 170 99 Cents Only Stores after the chain filed for Chapter 11 bankruptcy.
By the end of December, Dollar Tree hopes to have converted and reopened all of these stores with 158 of them already operational.
The interim CEO also hinted at some more general changes scheduled to take place, though the specifics are not fully known.
Dollar Tree is "opening new stores and improving the in-store experience through renovations and customer service enhancements," he said in the earnings call.
One of these changes could be related to anti-theft measures as the company found in Q3 that its previous steps to reduce theft were successful "year over year" at both Dollar Tree and Family Dollar.
However, the CEO admitted that the conversion of thousands of stores to the 3.0 format meant that anti-theft measures had to be increased.
This scaling up of such policies saw a "modest reduction" in theft and inventory loss during the last quarter and it is likely the company will continue to tweak such anti-theft measures to continue improving it.
Creighton also announced that there will continue to be changes at the top of the company with Chief Financial Officer Jeff Davis leaving his post.
Jeff Davis will be stepping down as Chief Financial Officer.
It comes as the company continues to look for a permanent CEO after Richard Dreiling stepped down in November after two years of leading the company.