Dollar Tree CFO Steps Down Amid Shake-Up Brought On by Activist-Investor Pressure

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Dollar Tree CFO Steps Down Amid Shake-Up Brought On by Activist-Investor Pressure


Dollar Tree inc

said its finance chief is stepping down as part of a broader executive reshuffling as the discount retailer faces pressure from an activist investor to improve its performance.

Kevin Wampler, chief financial officer since 2008, will step down from his role once a successor is found, Chesapeake, Va.-based Dollar Tree said Tuesday. Mr. Wampler will stay on as an adviser until April to help with the transition, the company said.

Dollar Tree also said four other top executives no longer work at the company: William Old, chief legal officer; Thomas O’Boyle, chief operating officer; David Jacobs, chief strategy officer; and Andy Paisley, chief information officer. The company said it is conducting searches for their successors, and in some cases is in advanced discussions with candidates, it said in a press release. It declined to comment further.

The executive overhaul follows pressure from activist investor Mantle Ridge LP, which in November disclosed a roughly 5% stake valued at about $1.8 billion at the time. Mantle Ridge has pushed for improvements in the Family Dollar brand, which Dollar Tree acquired in 2015. Dollar Tree in March made changes to its board, naming Rick Dreiling, a former chief executive of rival Dollar General corp

, as executive chairman. Paul Hilal, CEO of Mantle Ridge, was named Dollar Tree’s vice chairman. Mantle Ridge declined to comment.

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Bringing in fresh leadership could result in better financial discipline at Family Dollar, whose performance has lagged behind those of other discount-retail brands, said Corey Tarlowe, an analyst at Jefferies Financial Group inc,

a financial services company.

The changes show that Mr. Dreiling, who led a turnaround at Dollar General, is putting his executive team in place, said Anthony Chukumba, a managing director at investment firm Loop Capital Markets.

Dollar Tree last month said it hired two former Dollar General executives: John Flanigan as the company’s chief supply chain officer and Larry Gatta as chief merchandising officer for the Family Dollar chain. “I would not be surprised if there are further executive departures in the future,” Mr. Chukumba said.

Dollar Tree last month reported earnings that beat Wall Street’s expectations. Dollar chains, which often sell lower-priced items in small packages, tend to record rising sales when the economy weakens. Net sales rose 6.5% during the quarter ended April 30 to $6.9 billion from a year earlier. Profit climbed 43% to $536.4 million. The company, which previously sold nearly everything for a dollar, said last year it would start selling more products above $1 in response to higher costs.

Dollar General has reported 31 consecutive years of growth and is opening new US stores every day. In this video, WSJ takes an inside look at how the discount retailer keeps expanding while maintaining prices significantly lower than many grocery and drug stores. Photo: Matt Disbro for The Wall Street Journal

At its Family Dollar operation, however, same-store sales, or those from stores operating for at least 12 months, declined 2.8%. That included the temporary closure of around 400 stores after an Arkansas distribution center was shut due to rodent infestation.

Dollar Tree on Tuesday reaffirmed its outlook for the fiscal year, which includes a net-sales forecast of between $27.76 billion and $28.14 billion. Bringing in new leadership will ensure the company remains on a strong trajectory, Mr. Dreiling said in a statement.

Write to Kristin Broughton at Kristin.Broughton@wsj.com

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2022-06-28 18:58:00

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