Chesapeake, VA-based Dollar Tree, Inc. (NASDAQ:DLTR) disclosed today that Lawrence Gatta, Jr., the Chief Merchandising Officer for its Family Dollar segment, will be stepping down around the end of fiscal year 2024. Mr. Gatta, who has held the position since May 2022, will receive severance as outlined in his executive agreement dated November 12, 2024. The announcement comes as the company’s stock has declined nearly 30% over the past six months, according to InvestingPro data.
The departure aligns with Dollar Tree’s ongoing strategic review of the Family Dollar business. Mr. Gatta has agreed to assist the company as needed during this transition. The terms of his severance include payments and benefits as stipulated in Section 5 of his executive agreement with Dollar Tree. InvestingPro data shows the company maintains a Fair financial health score, though 14 analysts have recently revised their earnings expectations downward.
This decision is part of a broader assessment by Dollar Tree as it explores various strategic alternatives for the Family Dollar segment. The company’s move is documented in a recent filing with the Securities and Exchange Commission.
As per the filing, Dollar Tree is following through with its corporate governance responsibilities, ensuring that the transition adheres to the necessary legal and operational protocols. The company has not yet announced a successor for Mr. Gatta’s role.
Guggenheim maintained a positive stance on the company, despite cutting the stock’s price target to $100 from the previous $120. The firm anticipates the company’s initiatives to mature and positively influence sales growth over the coming years. Bernstein SocGen Group raised its price target for Dollar Tree to $79.00, maintaining a Market Perform rating due to uncertainties, particularly around the Family Dollar operations. BMO Capital Markets increased its price target from $65.00 to $70.00, while Loop Capital raised its price target to $75. Truist Securities increased the price target to $83 from $79, maintaining a Buy rating.
These adjustments followed a solid third-quarter performance, with the company reporting an Enterprise comparable sales increase of 1.8%. The recent leadership changes at Family Dollar and the potential sale or divestiture of Family Dollar were also noted by analysts. Dollar Tree also announced the immediate resignation of board member Winne Y. Park, leading to a reduction in the board’s size.
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