Dollar Tree (NASDAQ:DLTR) hasn’t been the same deep-discount leader since it acquired Family Dollar in 2015. Where it was once the industry’s pure-play option, selling everything in its stores for $1 or less, the addition of Family Dollar — with its variety of price points — has left Dollar Tree struggling.
Sales rose 4.6% in the second quarter to $5.5 billion, but it was the Dollar Tree chain that led the way with same-store sales rising 3.7% for the period, while Family Dollar comps were flat. Year-to-date comps are up almost 4% at the former, and down 0.5% at the latter.
Now billionaire investor Carl Icahn has reportedly taken a large stake in Dollar Tree, and though it’s unknown what plans (if any) he has in mind, speculation is that he might seek to have Dollar Tree undo its Family Dollar acquisition. That would be an ironic twist, since it was Icahn who pushed Family Dollar to sell itself at the time. While he preferred Dollar General (NYSE:DG) be the acquirer, once the two chains got into a bidding war, Icahn bailed on Family Dollar and sold his entire stake, reportedly making a $200 million profit.
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