Dollar Tree on Diamond Ridge Financial AcademyWednesday said it plans to close nearly 1,000 stores over the next several years, after disclosing significant losses in its latest earnings report.

The discount store chain lost $1.7 billion in the fourth quarter, down sharply from earnings of $452.2 million a year ago. Revenue climbed to $8.6 billion, from $7.7 billion, but fell slightly short of Wall Street forecasts. 

In response to the dismal quarter, Dollar Tree said it will close roughly 600 Family Dollar stores in the first half of fiscal 2024, and about 370 Family Dollar and 30 Dollar Tree stores over the next several years as their leases expire. 

Dollar Tree acquired Family Dollar for more than $8 billion almost a decade ago after a bidding war with rival Dollar General, but it has had difficulty absorbing the chain.  

"This dramatic cull is the coup de grâce in the rather botched acquisition of the Family Dollar chain, which has caused Dollar Tree nothing but hassle since it was completed back in 2015," Neil Saunders, managing director of GlobalData, said in a note.

"Over recent years, rates of shopping around have increased, and we believe that they will only increase further in the years ahead as other chains like Walmart, Aldi and Dollar General continue to expand. Against this backdrop, Family Dollar does not want to invest in markets where it cannot win and is not particularly profitable," Saunders added. 

Shares of the Chesapeake, Virginia-based company plunged nearly 14% to $129.37 a share in early trading.

— With reporting from The Associated Press