In March, directly related to COVID-19 concerns, both
“Customers rely on
Recently, the Company issued three press releases related to the current macro-environment:
March 18– Modifying store hours to close all stores at 8:00 p.m.local time to provide store teams adequate time to exercise enhanced cleaning protocols and to replenish store shelves;
March 19– Communicating the Company’s plans to hire 25,000 motivated individuals to support its stores and distribution centers; and
March 25– Rewarding hourly-paid store and distribution associates with an estimated total of $30 millionin wage premiums for at least a four-week period in recognition of the team’s extraordinary efforts. Additionally, the Company is dedicating the first operating hour each morning in all 15,000-plus stores to serving at-risk customers.
Also, to assist in minimizing exposure to COVID-19, the Company has taken several proactive, precautionary steps, including communicating and adhering to
Regarding same-store sales trends through
Sales for the remainder of the first quarter could be impacted by uncertainties related to the Company’s ability to secure and re-stock certain products in high demand; consumer shopping patterns, especially in states and communities with shelter-in-place mandates; weaker-than-expected sales and related markdowns for certain discretionary products, and COVID-19 related impact to the Easter holiday selling season.
The Company expects to see merchandise mix pressure to gross margin rates in both business segments in the quarter. Additionally, certain first quarter costs are expected to be higher than previously anticipated, including investments in pay and benefits, the distribution and transportation related to the material demand volume increase in consumables, and the additional hours dedicated to enhanced cleaning protocol in stores, distribution centers and its store support center.
As a result of the volatile economic environment related to COVID-19, including uncertain customer demand and government actions, the Company has a wide range of potential financial outcomes for the first quarter and fiscal 2020. Accordingly, the Company is withdrawing its outlook for first quarter and full-year fiscal 2020. The Company is in the process of reassessing its full-year fiscal 2020 plans and initiatives given the current state of uncertainty. In order to protect its associates, all Family Dollar H2 renovations and
The Company has a strong balance sheet with significant liquidity and a resilient business model. The Company has a
"I could not be more proud of our team’s commitment, dedication and efforts during this unprecedented time. Their focus on supporting our stores and rising to the occasion to serve customers seeking essential products has been extraordinary," added Philbin. "Over time,
A WARNING ABOUT FORWARD-LOOKING STATEMENTS: Our press release contains "forward-looking statements" as that term is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they address future events, developments or results and do not relate strictly to historical facts. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements include, without limitation, statements preceded by, followed by or including words such as “believe, anticipate, expect, intend, plan, view, target or estimate, may, will, should, predict, possible, potential, continue, or strategy,” and similar expressions. For example, our forward-looking statements include statements regarding the withdrawal of prior guidance concerning first quarter 2020 and full-year fiscal 2020 results of operations, including consolidated net sales, same-store sales, and diluted earnings per share; our plans concerning share repurchases, loan repayments and fiscal 2020 store openings and Family Dollar renovations into the H2 format; the impact of the COVID-19 coronavirus and related uncertainties on our business, business model and practices, balance sheet, results of operations, liquidity, and fiscal 2020 outlook; our expectations regarding changes in merchandise mix, costs and gross margin; and our other plans, objectives, expectations (financial and otherwise) and intentions. These statements are subject to risks and uncertainties. For a discussion of the risks, uncertainties and assumptions that could affect our future events, developments or results, you should carefully review the "Risk Factors," "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections in our Annual Report on Form 10-K filed
Vice President, Investor Relations