Family Dollar is getting a makeover.
Dollar Tree is hoping to bring customers back to its discount retail stores — which have been struggling ever since the brand was acquired in 2015 for $9 billion in cash and stock — by expanding sections related to party goods, merchandise and beverages. At least 1,000 stores will undergo renovations in 2019, the company confirmed Thursday.
Alcoholic beverages will also soon be available at those locations, as the chain adds more freezers and cooler doors to its stores. Currently, 45 Family Dollar stores are selling adult beverage products.
The company began testing renovations on Family Dollar stores in 2018 and says they have yielded a 10 percent increase in sales, on average, compared to locations that have remained the same. As of May 4, approximately 550 stores have undergone changes.
"[These] stores perform well in a variety of locations, and especially in locations where Family Dollar has been most challenged in the past," the company noted.
Dollar Tree expects to close up to 390 "under-performing" stores this year and convert 200 Family Dollar stores to Dollar Tree. However, Dollar Tree CEO Gary Philbin told Fox Business Thursday that he also expects 500 stores (between Family Dollar and Dollar Tree) to open in 2019.
The company released its first-quarter earnings Thursday morning of $267.9 million — a $160.5 million increase from the prior year's quarter. On a per-share basis, the Chesapeake, Virginia-based company said it had profit of $1.12. Earnings, adjusted for non-recurring costs, came to $1.14 per share.
"It's a great day at Dollar Tree."
Overall, the results fell short of Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of $1.15 per share.
Dollar Tree shares have increased 5.5 percent since the beginning of the year, while the Standard & Poor's 500 index has climbed 11 percent. The stock has risen slightly in the last 12 months.
"It's a great day at Dollar Tree," Philbin said to Fox Business in regard to the first quarter reports.
Philbin said the company has "overcome" the tariff impact so far, adding Dollar Tree imports about 40 percent and about half of that at Family Dollar. The CEO said consumers won't see a price increase either way.
"For Dollar Tree, everything's a dollar. It's never about raising our retail. It's about changing product if we have to," he explained. "We've always changed items."
The Associated Press contributed to this report.