Retail and consumers

The Weekly Closeout: Dollar Tree margins pressured by inflation, Tuesday Morning IP up for sale

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It’s been another week with far more retail news than there is time in the day. Below, we break down some things you may have missed during the week and what we’re still thinking about. 

From HomeGood’s new concept restaurant to Target’s expansion of its luggage private label, here’s our closeout for the week.

What you may have missed

Dollar Tree faces pressured margins due to inflation

Dollar Tree this week reported its consolidated net sales rose 6.1% to $7.32 billion in the first quarter.

Operating income was $419.7 million and operating margin was 5.7%, while the retailer’s net income was $299 million. However, Dollar Tree’s gross profit fell 4.7% to $2.23 billion and its gross margin declined 340 basis points to 30.5%.

“In addition to the historic levels of inflation and labor market challenges, retailers have seen in just the past quarter elevated levels of shrink and even further pressure on the consumer’s willingness to spend on discretionary goods,” CEO Rick Dreiling said, according to an earnings call transcript. “Shrink and the mix shift from discretionary goods have pressured margins throughout retail. We are no exception.”

Dollar Tree tightened its full-year sales guidance and is being more cautious on margins and earnings per share, saying the unfavorable sales mix away from discretionary purchases is likely to normalize over time. Consolidated net sales for fiscal 2023 are now expected to range from $30 billion to $30.5 billion. And the company expects to deliver a low- to mid-single-digit comp store sales increase for the year. 

Tuesday Morning intellectual property up for sale

Tuesday Morning’s assets are for sale, including its trademarks, domain names, icustomer database, social media accounts, design patents and related digital content.

Founded in 1974 in Dallas, Tuesday Morning achieved $1 billion in revenue in 2019. But faced with “exceedingly burdensome debt,” the home decor retailer filed for Chapter 11 in February. And a few months later, the company announced it was going out of business following a court-approved bankruptcy sale to Hilco for $32 million.

“The Tuesday Morning brand provides a meaningful opportunity to maintain engagement with its valuable customer base and to reactivate the remainder through new channels such as e-commerce and new product categories,” Hilco Streambank executive vice president David Peress said in an announcement.

Target expands its private label luggage brand

After launching in 2020, Target’s Open Story luggage private label is expanding its offering.

The retailer earlier this week said it has added new luggage options and accessories, most of which are under $30, including a hardside carry-on, packing cubes and a commuter backpack.

A suitcase from Target's Open Story brand.

Courtesy of Target


“You asked for simple organization solutions, space-maximizing designs, a range of sizes and smart technology, and Open Story has it all, with travel solutions for every budget,” the company said in an announcement.

Target has been successful in its introduction of private labels in recent years, touting several billion-dollar brands, including its activewear brand All in Motion, which reached $1 billion in sales in its first year.

The Open Story brand, however, positions itself as a lower-cost option against DTC players like Away and Monos. While Away has expanded its physical footprint with more stores, reports circulated earlier this year that the DTC brand could be exploring strategic options, including a sale.

Retail therapy

Low on date night ideas? How about dinner at HomeGoods?

People will pay for all kinds of novel dining experiences. Whether it’s dining in the dark or eating Christmas dinner at Hogwarts, there’s a market for the unique — and HomeGoods wants in on it.

The off-price retailer this week announced “A Taste of HomeGoods,” a $25 dinner curated by James Beard award-winning Chef Mashama Bailey. For one night only, treasure hunting home goods shoppers in Austin can experience an eight-course meal while touring four different styled spaces. Bailey designed the dinner around HomeGoods’ merchandise selection, according to a statement.

A row of chairs seated at a colorful, long table with candlesticks on it and lamps hanging down from above.

Courtesy of HomeGoods


The food experience will take its intrepid explorers through a champagne toast in the “Foyer of Curiosity,” skewered light bites in the “Harmony Lounge,” main courses and wines in the “Library of Discovery,” and a dessert pairing in the “Wanderlust Desert.” While they might seem like episodes of a young adult TV show, each room is actually inspired by an inanimate object, ranging from a “multi-stem ceramic vase” to a “gold metal floor lamp.”

The home goods retailer is offering 30 reservations at both 6PM and 9PM ET for the Wednesday dining experience. 

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