(Bloomberg) -- Dollar Tree Inc. named a new interim chief executive officer as the beleaguered discounter struggles to lure in lower-income consumers and compete against bigger rivals.
Michael C. Creedon Jr., chief operating officer since late 2022, was appointed Dollar Tree’s interim leader as the company looks for a permanent appointment, according to a statement. He replaces Richard W. Dreiling, who stepped down. Dreiling, who previously led rival Dollar General Corp., was CEO of Dollar Tree since January 2023.
Dollar Tree shares jumped 6.1% at 5:08 p.m. in extended New York trading. The stock has plunged about 53% this year so far.
Dollar Tree and other discount chains typically perform well during challenging economic periods when consumers look to save money, but the segment has struggled in recent years. The Chesapeake, Virginia-based company cut its outlook last quarter after saying its core lower-income consumers are under pressure due to high inflation and interest rates — and macroeconomic pressures are also weighing on its other shoppers as well.
Retail rivals, especially Walmart Inc., have continued to perform well, suggesting that dollar stores are losing market share.
Dollar Tree said it continues to review strategic alternatives for the Family Dollar chain that it purchased for about $8.9 billion almost a decade ago. The company also maintained its third-quarter outlook.
Truist Securities analyst Scot Ciccarelli wrote Monday that the dollar-store industry has become tougher to navigate due to activist investors, economic pressures and intensified competition.
Dreiling did not attend the company’s latest earnings call in September due to health issues.
(Updates share trading and adds details)
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