- Same-Store Net Sales: Dollar Tree +6.3%; Family Dollar
-1.2%; Enterprise +3.0%
- Comparable Transaction Count: Dollar Tree +7.1%; Family
Dollar +0.7%
- Diluted Loss per Share of $7.85
- Results Include a $594.4 Million Charge for Portfolio
Optimization Review, a $1.07 Billion Goodwill Impairment Charge,
and a $950 Million Trade Name Intangible Asset Impairment
Charge.
- Adjusted Earnings per Share (EPS) of $2.55, Including $0.17
of Costs Primarily Related to General Liability Claims.
- Quarter and Annual Results Reflect Extra Week as Fiscal 2023
was a 53-Week Year.
- Portfolio Optimization Review Identifies Approximately 600
Family Dollar Stores for Closure in First Half of Fiscal 2024 and
Approximately 370 Additional Stores as Their Leases
Expire.
- Fiscal 2024 Net Sales Outlook Range of $31.0 Billion to
$32.0 Billion
- Fiscal 2024 Diluted EPS Outlook Range of $6.70 to
$7.30
Dollar Tree, Inc. (NASDAQ: DLTR) today reported financial
results for its fourth quarter ended February 3, 2024.
“We finished the year strong, with fourth quarter results
reflecting positive traffic trends, market share gains, and
adjusted margin improvement across both segments,” said Rick
Dreiling, Chairman and Chief Executive Officer. “While we are still
in the early stages of our transformation journey, I am proud of
what our team accomplished in 2023 and see a long runway of growth
ahead of us. As we look forward in 2024, we are accelerating our
multi-price rollout at Dollar Tree and taking decisive action to
improve profitability and unlock value at Family Dollar.”
Chief Financial Officer Jeff Davis added, “As an organization,
we continue to execute at a high level. Our core operating
performance was strong in the fourth quarter, despite some
unanticipated developments related to general liability
claims.”
Additional Business
Highlights
- Opened 219 new stores in the fourth quarter, bringing full-year
new store openings to 641
- $3 and $5 center-store merchandise available at approximately
5,000 Dollar Tree stores
- $3, $4, and $5 frozen and refrigerated items available at more
than 6,500 Dollar Tree stores
- Net cash provided by operating activities increased $1.07
billion in FY 2023
- Increased free cash flow by $217.2 million compared to FY
2022
Fourth Quarter and Fiscal 2023
Key Operating Results (unaudited)
(Compared to same period fiscal 2022)
Q4
Fiscal 2023
Change
Fiscal 2023
Change
Consolidated Net Sales
$8.63B
11.9
%
$30.6B
8.0
%
Same-Store Net Sales Growth:
Dollar Tree Segment
6.3
%
5.8
%
Family Dollar Segment
(1.2
%)
3.2
%
Enterprise
3.0
%
4.6
%
Operating Income
($1.89B
)
NM
($882M
)
NM
Diluted EPS
($7.85
)
NM
($4.55
)
NM
Adjusted Operating Income1
$749M
21.2
%
$1.79B
(20.0
%)
Adjusted Diluted EPS1
$2.55
25.0
%
$5.89
(18.3
%)
1Adjustments are due to charges
related to legal reserves, store optimization review, and annual
impairment testing of goodwill and non-amortizing intangible
assets. See “Reconciliation of Non-GAAP Financial Measures” below
for detailed schedules of these charges.
Fourth Quarter Results
Unless otherwise noted, all comparisons are between the 14 weeks
ended February 3, 2024, and the 13 weeks ended January 28,
2023.
Consolidated net sales increased 11.9% to $8.63 billion.
Enterprise same-store net sales increased 3.0%, driven by a 4.6%
increase in traffic, partially offset by a 1.5% decline in average
ticket. Dollar Tree same-store net sales increased 6.3%, driven by
a 7.1% increase in traffic, partially offset by a 0.7% decline in
average ticket. Family Dollar’s same-store net sales decreased
1.2%, driven by a 0.7% increase in traffic, partially offset by a
2.0% decline in average ticket.
Gross profit increased 16.2% to $2.77 billion and gross margin
expanded 120 basis points to 32.1%. Gross margin expansion was
driven by lower freight costs, sales leverage, the impact of the
53rd week in fiscal 2023, and higher allowances, offset by product
cost inflation, unfavorable sales mix, elevated shrink, and higher
distribution and markdown costs. On a non-GAAP basis, which
excludes distribution and markdown costs related to the store
portfolio optimization review, adjusted gross profit increased
19.8% to $2.86 billion and adjusted gross margin expanded 220 basis
points to 33.1%.
Selling, general and administrative expenses were 54.0% of total
revenue, compared to 22.9%. The increase was due to a non-cash
goodwill impairment charge, a non-cash trade name impairment
charge, a non-cash store asset impairment charge, a litigation
charge, unfavorable development of general liability claims, labor
investments in store and field payroll, investments in repairs and
maintenance, and higher depreciation and amortization, partially
offset by sales leverage, the impact of the 53rd week in fiscal
2023, and lower utility costs. On a non-GAAP basis, which excludes
the impairment and litigation charges, adjusted selling, general
and administrative costs were 24.4% of total revenue.
Operating loss was $1.89 billion and operating margin was
-21.9%. On a non-GAAP basis, adjusted operating income increased
21.2% to $749.1 million and adjusted operating margin expanded 70
basis points to 8.7%.
The Company’s effective tax rate was 10.8%. On a non-GAAP basis,
the adjusted effective tax rate was 23.1% compared to 23.4%.
Net loss was $1.71 billion and diluted loss per share was $7.85.
On a non-GAAP basis, adjusted net income was $555.7 million and
adjusted diluted EPS was $2.55. Adjusted diluted EPS reflects
approximately $0.17 of net negative impact, primarily related to
unfavorable development of general liability insurance claims.
Given the portfolio review process, the Company did not
repurchase any shares during the quarter.
Year-to-Date Results
Unless otherwise noted, all comparisons are between the 53 weeks
ended February 3, 2024, and the 52 weeks ended January 28,
2023.
Consolidated net sales increased 8.0% to $30.6 billion.
Enterprise same-store net sales increased 4.6%. Dollar Tree
same-store net sales increased 5.8%, driven by a 7.4% increase in
traffic, partially offset by a 1.5% decline in average ticket.
Family Dollar’s 3.2% same-store net sales increase was comprised of
a 2.5% increase in traffic along with a 0.7% increase in average
ticket.
Gross profit increased 4.3% to $9.31 billion and gross margin
declined 110 basis points to 30.4%. The decline in gross margin was
driven by elevated shrink, product cost inflation, unfavorable
sales mix, and higher distribution and markdown costs, partially
offset by lower freight costs, sales leverage, and the impact of
the 53rd week in fiscal 2023. On a non-GAAP basis, which excludes
distribution and markdown costs related to the store portfolio
optimization review, adjusted gross profit increased 5.3% to $9.40
billion and adjusted gross margin declined 80 basis points to
30.7%.
Selling, general and administrative expenses were 33.4% of total
revenue, compared to 23.6%. The increase was due to a non-cash
goodwill impairment charge, a non-cash trade name impairment
charge, a non-cash store asset impairment charge, a litigation
charge, labor investments in store and field payroll, unfavorable
development of general liability claims, investments in repairs and
maintenance, and higher depreciation and amortization, partially
offset by sales leverage and the impact of the 53rd week in fiscal
2023. On a non-GAAP basis, which excludes the impairment and
litigation charges, adjusted selling, general and administrative
costs were 24.9% of total revenue.
Operating loss was $881.8 million and operating margin decreased
1,080 basis points to -2.9%. On a non-GAAP basis, adjusted
operating income decreased 20.0% to $1.79 billion and adjusted
operating margin decreased 210 basis points to 5.8%.
The Company’s effective tax rate was -1.0%. On a non-GAAP basis,
the adjusted effective tax rate was 23.1% compared to 23.5%.
Net loss was $998.4 million and diluted loss per share was
$4.55. On a non-GAAP basis, adjusted net income was $1.29 billion
and adjusted diluted EPS was $5.89. Adjusted diluted EPS reflects
approximately $0.24 of net negative impact, primarily related to
unfavorable development of general liability claims.
The Company repurchased 3,905,599 shares for $504.3 million,
including applicable excise tax.
Portfolio Optimization Review and
Impairments
During the fourth quarter of fiscal 2023, the Company announced
that it had initiated a comprehensive store portfolio optimization
review which involved identifying stores for closure, relocation,
or re-bannering based on an evaluation of current market conditions
and individual store performance, among other factors. As a result
of this review, we plan on closing approximately 600 Family Dollar
stores in the first half of fiscal 2024. Additionally,
approximately 370 Family Dollar and 30 Dollar Tree stores will
close over the next several years at the end of each store’s
current lease term. In the fourth quarter of 2023, we incurred
$594.4 million of charges in connection with the store portfolio
review. Additionally, we incurred a goodwill impairment charge of
$1.07 billion and a trade name intangible asset impairment charge
of $950 million. Details of these charges are provided in the
Reconciliation of Non-GAAP Financial Measures at the end of this
release.
First Quarter and Fiscal 2024
Outlook
“We are introducing an initial fiscal 2024 EPS outlook of $6.70
to $7.30. While we expect current shrink and mix levels to be a
headwind in the first half of the year, we are expecting to benefit
from favorable freight rates and moderating headwinds from reduced
SNAP benefits throughout the year. We are making solid progress on
our key growth initiatives and are encouraged by the early results
of our business transformation efforts,” Davis added.
Consolidated net sales for full-year fiscal 2024 are expected to
range from $31.0 billion to $32.0 billion. The Company expects to
deliver a low-to-mid-single digit comparable store net sales
increase for the year, comprised of a mid-single-digit increase in
the Dollar Tree segment and a low-single-digit increase in the
Family Dollar segment. Diluted EPS is expected to range from $6.70
to $7.30.
Our fiscal 2024 outlook reflects approximately $0.15 of EPS
benefit from the anticipated Family Dollar store closures, mostly
in the second half of the year as we close underperforming stores
throughout the first half of fiscal 2024.
The Company expects consolidated net sales for the first quarter
will range from $7.6 billion to $7.9 billion, based on a
low-to-mid-single digit increase in same-store sales for the
enterprise and the Dollar Tree segment and approximately flat
same-store sales growth for the Family Dollar segment. Diluted EPS
for the quarter is estimated to be in the range of $1.33 to
$1.48.
While share repurchases are not included in the outlook, the
Company has $1.35 billion remaining under its share repurchase
authorization as of February 3, 2024.
Conference Call
Information
On Wednesday, March 13, 2024, the Company will host a conference
call to discuss its earnings results at 8:00 a.m. Eastern Time. The
telephone number for the call is 877-407-3943. A recorded version
of the call will be available for seven days after the call and may
be accessed by dialing 877-660-6853. The access code is 13744543. A
webcast of the call is also accessible through the Investor
Relations portion of the Company’s website.
Supplemental financial information for the Fourth Quarter is
available on the Investor Relations portion of the Company’s
website, at https://corporate.dollartree.com/investors.
Dollar Tree, a Fortune 200 Company, operated 16,774 stores
across 48 states and five Canadian provinces as of February 3,
2024. Stores operate under the brands of Dollar Tree, Family
Dollar, and Dollar Tree Canada. To learn more about the Company,
visit www.DollarTree.com.
Use of Non-GAAP Financial
Measures
The Company reports its financial results in accordance with
accounting principles generally accepted in the United States
(“GAAP”). From time-to-time, the Company supplements the reporting
of its financial information determined under GAAP with certain
non-GAAP financial information. The non-GAAP financial measures we
have disclosed include adjusted gross profit; adjusted gross
margin; adjusted selling, general and administrative expenses;
adjusted selling, general and administrative expense rate; adjusted
operating income (loss); adjusted operating income (loss) margin;
adjusted net income; adjusted effective tax rate; adjusted diluted
earnings per share; and free cash flow.
Reconciliations of the non-GAAP financial measures to the
corresponding amounts prepared in accordance with GAAP appears in
the tables under the heading “Reconciliation of Non-GAAP Financial
Measures” below. These tables provide additional information
regarding the adjusted measures.
A WARNING ABOUT FORWARD-LOOKING STATEMENTS: Our press release
contains "forward-looking statements" as that term is used in the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by the fact that they address future
events, developments or results and do not relate strictly to
historical facts. Any statements contained in this press release
that are not statements of historical fact may be deemed to be
forward-looking statements. Forward-looking statements include,
without limitation, statements preceded by, followed by or
including words such as: “believe”, “anticipate”, “expect”,
“intend”, “plan”, “view”, “target” or “estimate”, “may”, “will”,
“should”, “predict”, “possible”, “potential”, “continue”,
“strategy”, and similar expressions. For example, our
forward-looking statements include statements relating to our
business and financial outlook for fiscal 2024, including without
limitation our expectations regarding net sales, comparable store
sales and diluted earnings per share for the first fiscal quarter
and full fiscal year 2024, and various factors that are expected to
impact our quarterly and annual results of operations for fiscal
2024; our selling square footage for fiscal 2024; our plans and
expectations regarding our business, including the impact of
various initiatives, investments, and reviews on the company’s
performance and prospects for long-term growth; and our other
plans, objectives, expectations (financial and otherwise) and
intentions. These statements are subject to risks and
uncertainties. For a discussion of the risks, uncertainties and
assumptions that could affect our future events, developments or
results, you should carefully review the "Risk Factors," "Business"
and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" sections in our Annual Report on Form
10-K filed March 10, 2023, our Form 10-Q for the most recently
ended fiscal quarter and other filings we make from time to time
with the Securities and Exchange Commission. We are not obligated
to release publicly any revisions to any forward-looking statements
contained in this press release to reflect events or circumstances
occurring after the date of this report and you should not expect
us to do so.
DOLLAR TREE, INC. Condensed Consolidated Statements of
Operations (In millions, except per share data)
14 WeeksEnded 13 WeeksEnded 53 WeeksEnded
52 WeeksEnded February 3,2024 January 28,2023
February 3,2024 January 28,2023 (Unaudited)
(Unaudited) (Unaudited) Revenues Net sales
$
8,632.9
$
7,716.2
$
30,581.6
$
28,318.2
Other revenue
7.0
4.5
22.2
13.5
Total revenue
8,639.9
7,720.7
30,603.8
28,331.7
Expenses Cost of sales
5,861.4
5,330.7
21,272.0
19,396.3
Selling, general and administrative expenses, excluding Goodwill
impairment
3,600.5
1,771.9
9,144.6
6,699.1
Goodwill impairment
1,069.0
-
1,069.0
-
Selling, general and administrative expenses
4,669.5
1,771.9
10,213.6
6,699.1
Operating income (loss)
(1,891.0
)
618.1
(881.8
)
2,236.3
Interest expense, net
26.3
28.0
106.8
125.3
Other (income) expense, net
(0.1
)
0.1
0.1
0.4
Income (loss) before income taxes
(1,917.2
)
590.0
(988.7
)
2,110.6
Provision for income taxes
(207.4
)
137.8
9.7
495.2
Net income (loss)
$
(1,709.8
)
$
452.2
$
(998.4
)
$
1,615.4
Net earnings (loss) per share: Basic
$
(7.85
)
$
2.05
$
(4.55
)
$
7.24
Weighted average number of shares
217.9
221.1
219.5
223.2
Diluted
$
(7.85
)
$
2.04
$
(4.55
)
$
7.21
Weighted average number of shares
217.9
221.9
219.5
224.1
Selling, general and administrative expense rate
54.0
%
22.9
%
33.4
%
23.6
%
Operating income (loss) margin
(21.9
%)
8.0
%
(2.9
%)
7.9
%
Income (loss) before income taxes as percentage of total revenue
(22.2
%)
7.6
%
(3.2
%)
7.4
%
Effective tax rate
10.8
%
23.4
%
(1.0
%)
23.5
%
Net income (loss) margin
(19.8
%)
5.9
%
(3.3
%)
5.7
%
The information for the year ended January 28, 2023 was derived
from the audited consolidated financial statements as of that date.
The selling, general and administrative expense rate, operating
income (loss) margin and net income (loss) margin are calculated by
dividing the applicable amount by total revenue.
DOLLAR TREE,
INC. Segment Information (In millions)
14 WeeksEnded 13 WeeksEnded 53 WeeksEnded
52 WeeksEnded February 3,2024 January 28,2023
February 3,2024 January 28,2023 (Unaudited)
(Unaudited) (Unaudited) Net sales: Dollar Tree
$
4,961.4
$
4,296.7
$
16,770.3
$
15,405.7
Family Dollar
3,671.5
3,419.5
13,811.3
12,912.5
Total net sales
$
8,632.9
$
7,716.2
$
30,581.6
$
28,318.2
Gross profit: Dollar Tree
$
1,933.2
39.0
%
$
1,577.6
36.7
%
$
6,008.9
35.8
%
$
5,775.5
37.5
%
Family Dollar
838.3
22.8
%
807.9
23.6
%
3,300.7
23.9
%
3,146.4
24.4
%
Total gross profit
$
2,771.5
32.1
%
$
2,385.5
30.9
%
$
9,309.6
30.4
%
$
8,921.9
31.5
%
Operating income (loss): Dollar Tree
$
862.6
17.4
%
$
721.3
16.8
%
$
2,278.8
13.6
%
$
2,536.0
16.5
%
Family Dollar
(2,617.8
)
(71.2
%)
1.4
0.0
%
(2,663.5
)
(19.3
%)
127.5
1.0
%
Corporate, support and other
(135.8
)
(1.6
%)
(104.6
)
(1.4
%)
(497.1
)
(1.6
%)
(427.2
)
(1.5
%)
Total operating income (loss)
$
(1,891.0
)
(21.9
%)
$
618.1
8.0
%
$
(881.8
)
(2.9
%)
$
2,236.3
7.9
%
The information for the year ended January 28, 2023 was derived
from the audited consolidated financial statements as of that date.
DOLLAR TREE, INC. Condensed Consolidated Balance
Sheets (In millions) February 3,
2024 January 28, 2023 (Unaudited) ASSETS
Current Assets: Cash and cash equivalents
$
684.9
$
642.8
Merchandise inventories
5,112.8
5,449.3
Other current assets
335.0
275.0
Total current assets
6,132.7
6,367.1
Restricted cash
72.3
68.5
Property, plant and equipment, net
6,144.1
4,972.2
Operating lease right-of-use assets
6,488.3
6,458.0
Goodwill
913.8
1,983.1
Trade name intangible asset
2,150.0
3,100.0
Deferred tax asset
9.0
15.0
Other assets
113.3
58.2
Total assets
$
22,023.5
$
23,022.1
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:
Current portion of operating lease liabilities
$
1,513.0
$
1,449.6
Accounts payable
2,063.8
1,899.8
Income taxes payable
52.7
58.1
Other current liabilities
1,067.2
817.7
Total current liabilities
4,696.7
4,225.2
Long-term debt, net
3,426.3
3,421.6
Operating lease liabilities, long-term
5,447.6
5,255.3
Deferred income taxes, net
841.1
1,105.7
Income taxes payable, long-term
22.0
17.4
Other liabilities
276.7
245.4
Total liabilities
14,710.4
14,270.6
Shareholders' equity
7,313.1
8,751.5
Total liabilities and shareholders' equity
$
22,023.5
$
23,022.1
The January 28, 2023 information was derived from the audited
consolidated financial statements as of that date.
DOLLAR TREE,
INC. Condensed Consolidated Statements of Cash Flows
(In millions) 53 Weeks Ended 52 Weeks
Ended February 3, 2024 January 28, 2023
(Unaudited) Cash flows from operating activities: Net income
(loss)
$
(998.4
)
$
1,615.4
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Goodwill impairment
1,069.0
-
Depreciation and amortization
841.0
767.9
Provision for deferred income taxes
(258.6
)
123.0
Stock-based compensation expense
96.7
110.4
Impairments, excluding goodwill
1,461.5
40.0
Other non-cash adjustments to net income (loss)
20.7
23.7
Changes in operating assets and liabilities
452.6
(1,065.6
)
Total adjustments
3,682.9
(0.6
)
Net cash provided by operating activities
2,684.5
1,614.8
Cash flows from investing activities: Capital expenditures
(2,101.3
)
(1,248.8
)
Payments for fixed asset disposition
(6.3
)
(5.0
)
Net cash used in investing activities
(2,107.6
)
(1,253.8
)
Cash flows from financing activities: Proceeds from
revolving credit facility
-
555.0
Repayments of revolving credit facility
-
(555.0
)
Proceeds from commercial paper notes
1,067.9
-
Repayments of commercial paper notes
(1,067.9
)
-
Proceeds from stock issued pursuant to stock-based compensation
plans
10.0
9.3
Cash paid for taxes on exercises/vesting of stock-based
compensation
(40.0
)
(48.6
)
Payments for repurchase of stock
(500.0
)
(647.5
)
Net cash used in financing activities
(530.0
)
(686.8
)
Effect of exchange rate changes on cash, cash equivalents and
restricted cash
(1.0
)
(1.2
)
Net increase (decrease) in cash, cash equivalents and restricted
cash
45.9
(327.0
)
Cash, cash equivalents and restricted cash at beginning of period
711.3
1,038.3
Cash, cash equivalents and restricted cash at end of period
$
757.2
$
711.3
The information for the year ended January 28, 2023 was derived
from the audited consolidated financial statements as of that date.
DOLLAR TREE, INC. Segment Information
(Unaudited) 14 Weeks Ended 13 Weeks
Ended February 3, 2024 January 28, 2023
Dollar Family Dollar Family Tree
Dollar Total Tree Dollar Total
Store Count: Beginning
8,272
8,350
16,622
8,114
8,179
16,293
New stores
146
73
219
34
89
123
Re-bannered stores (a)
10
(5
)
5
-
1
1
Closings
(13
)
(59
)
(72
)
(14
)
(63
)
(77
)
Ending
8,415
8,359
16,774
8,134
8,206
16,340
Selling Square Footage (in millions)
73.1
63.7
136.8
70.5
61.6
132.1
Growth Rate (Square Footage)
3.7
%
3.4
%
3.6
%
1.1
%
4.1
%
2.5
%
53 Weeks Ended 52 Weeks Ended
February 3, 2024 January 28, 2023 Dollar
Family Dollar Family Tree Dollar
Total Tree Dollar Total Store
Count: Beginning
8,134
8,206
16,340
8,061
8,016
16,077
New stores
333
308
641
131
333
464
Re-bannered stores (a)
15
(15
)
-
(5
)
9
4
Closings
(67
)
(140
)
(207
)
(53
)
(152
)
(205
)
Ending
8,415
8,359
16,774
8,134
8,206
16,340
Selling Square Footage (in millions)
73.1
63.7
136.8
70.5
61.6
132.1
Growth Rate (Square Footage)
3.7
%
3.4
%
3.6
%
1.1
%
4.1
%
2.5
%
(a) Stores are included as re-banners when they close or open,
respectively.
53 Weeks Ended 52 Weeks Ended
February 3, 2024 January 28, 2023 Dollar
Family Dollar Family Tree Dollar
Total Tree Dollar Total Sales per
Square Foot (b)
$
234
$
220
$
227
$
220
$
214
$
217
(b) Sales per square foot is calculated based on total net sales
for the reporting period divided by the average selling square
footage during the period.
DOLLAR TREE, INC.
Reconciliation of Non-GAAP Financial Measures (In
millions, except per share data) (Unaudited) From
time-to-time, the Company discloses certain financial measures not
derived in accordance with GAAP. These non-GAAP financial measures
should not be used as a substitute for GAAP financial measures, or
considered in isolation, for the purposes of analyzing operating
performance, financial position, liquidity, or cash flows. The
non-GAAP financial measures we have disclosed include adjusted
gross profit; adjusted gross margin; adjusted selling, general and
administrative expenses; adjusted selling, general and
administrative expense rate; adjusted operating income (loss);
adjusted operating income (loss) margin; adjusted net income;
adjusted effective tax rate; adjusted diluted earnings per share;
and free cash flow. The Company believes providing additional
information in these non-GAAP measures that exclude the unusual
expenses described below is beneficial to the users of its
financial statements in evaluating the Company's current operating
results in relation to past periods. In addition, the Company's
debt covenants exclude the impact of certain unusual expenses. The
Company has included a reconciliation of these non-GAAP financial
measures to the most comparable GAAP measures in the following
tables. 1.) In the first quarter of fiscal 2023, the Company
recorded a $30.0 million charge to its legal reserve for West
Memphis-related matters. In the fourth quarter of fiscal 2023, an
additional $26.7 million charge was recorded to the legal reserve
for these matters. 2.) During the fourth quarter of fiscal 2023, we
announced that we had initiated a comprehensive store portfolio
optimization review which involved identifying stores for closure,
relocation or re-bannering based on an evaluation of current market
conditions and individual store performance, among other factors.
As a result of this portfolio optimization review, we plan to close
approximately 970 underperforming Family Dollar stores, including
approximately 600 stores to be closed in the first half of fiscal
2024, and approximately 370 stores to be closed at the end of each
store's current lease term. Additionally, we identified
approximately 30 underperforming Dollar Tree stores for closure and
plan to close each at the end of the store's current lease term. In
the fourth quarter of fiscal 2023, we incurred $594.4 million of
charges in connection with the store portfolio optimization review,
comprised of $503.9 million of store long-lived asset impairment
charges, $80.6 million of inventory markdowns, $5.6 million of
capitalized distribution cost impairment and $4.3 million in third
party consulting fees incurred related to the review. 3.) In the
fourth quarter of fiscal 2023, the Company performed its annual
impairment testing of goodwill and nonamortizing intangible assets.
The impairment test of nonamortizing intangible assets indicated
that the carrying value of the Family Dollar trade name exceeded
its estimated fair value resulting in the recognition of a $950.0
million impairment charge in the fourth quarter of fiscal 2023. The
goodwill impairment test indicated that the fair value of the
Family Dollar reporting unit was lower than its carrying value
resulting in the recognition of a $1,069.0 million impairment
charge in the fourth quarter of fiscal 2023. In addition, the
Company discloses free cash flow, a non-GAAP financial measure that
we calculate as net cash provided by operating activities less
capital expenditures. The Company believes free cash flow is an
important indicator of our liquidity as it measures the amount of
cash we generate from our business operations. Free cash flow may
not represent the amount of cash flow available for general
discretionary use, because it excludes non-discretionary
expenditures, such as mandatory debt repayments and required
settlements of recorded and/or contingent liabilities not reflected
in cash flow from operations. The Company has included a
reconciliation of free cash flow to the most comparable GAAP
measures in the following tables.
Reconciliation of
Adjusted Gross Profit 14 Weeks Ended 13 Weeks
Ended 53 Weeks Ended 52 Weeks Ended February
3, 2024 January 28, 2023 February 3, 2024
January 28, 2023 Gross profit (GAAP)
$
2,771.5
32.1
%
$
2,385.5
30.9
%
$
9,309.6
30.4
%
$
8,921.9
31.5
%
Add: Inventory markdowns - store closures
80.6
0.9
%
-
0.0
%
80.6
0.3
%
-
0.0
%
Add: Distribution costs - store closures
5.6
0.1
%
-
0.0
%
5.6
0.0
%
-
0.0
%
Adjusted gross profit (Non-GAAP)
$
2,857.7
33.1
%
$
2,385.5
30.9
%
$
9,395.8
30.7
%
$
8,921.9
31.5
%
Reconciliation of Adjusted Gross Profit - Family
Dollar Segment 14 Weeks Ended 13 Weeks Ended
53 Weeks Ended 52 Weeks Ended February 3, 2024
January 28, 2023 February 3, 2024 January 28,
2023 Gross profit (GAAP)
$
838.3
22.8
%
$
807.9
23.6
%
$
3,300.7
23.9
%
$
3,146.4
24.4
%
Add: Inventory markdowns - store closures
80.6
2.2
%
-
0.0
%
80.6
0.6
%
-
0.0
%
Add: Distribution costs - store closures
5.6
0.2
%
-
0.0
%
5.6
0.0
%
-
0.0
%
Adjusted gross profit (Non-GAAP)
$
924.5
25.2
%
$
807.9
23.6
%
$
3,386.9
24.5
%
$
3,146.4
24.4
%
Gross profit margin is calculated as gross profit (i.e., net sales
less cost of sales) divided by net sales.
DOLLAR TREE, INC.
Reconciliation of Non-GAAP Financial Measures (In
millions, except per share data) (Unaudited)
Reconciliation of Adjusted Selling, General and Administrative
Expenses 14 Weeks Ended 13 Weeks Ended 53
Weeks Ended 52 Weeks Ended February 3, 2024
January 28, 2023 February 3, 2024 January 28,
2023 Selling, general and administrative expenses (GAAP)
$
4,669.5
54.0
%
$
1,771.9
22.9
%
$
10,213.6
33.4
%
$
6,699.1
23.6
%
Deduct: Goodwill impairment
1,069.0
12.4
%
-
0.0
%
1,069.0
3.5
%
-
0.0
%
Deduct: Trade name intangible asset impairment
950.0
11.0
%
-
0.0
%
950.0
3.1
%
-
0.0
%
Deduct: Long-lived asset impairment
503.9
5.8
%
-
0.0
%
503.9
1.7
%
-
0.0
%
Deduct: Legal reserve
26.7
0.3
%
-
0.0
%
56.7
0.2
%
-
0.0
%
Deduct: Other consulting fees
4.3
0.1
%
-
0.0
%
4.3
0.0
%
-
0.0
%
Total adjustments
2,553.9
29.6
%
-
0.0
%
2,583.9
8.5
%
-
0.0
%
Adjusted selling, general and administrative expenses (Non-GAAP)
$
2,115.6
24.4
%
$
1,771.9
22.9
%
$
7,629.7
24.9
%
$
6,699.1
23.6
%
Reconciliation of Adjusted Selling, General and
Administrative Expenses - Family Dollar Segment 14 Weeks
Ended 13 Weeks Ended 53 Weeks Ended 52 Weeks
Ended February 3, 2024 January 28, 2023
February 3, 2024 January 28, 2023 Selling, general
and administrative expenses (GAAP)
$
3,460.2
94.0
%
$
809.0
23.6
%
$
5,975.6
43.2
%
$
3,026.7
23.4
%
Deduct: Goodwill impairment
1,069.0
29.1
%
-
0.0
%
1,069.0
7.7
%
-
0.0
%
Deduct: Trade name intangible asset impairment
950.0
25.8
%
-
0.0
%
950.0
6.9
%
-
0.0
%
Deduct: Long-lived asset impairment
493.1
13.4
%
-
0.0
%
493.1
3.6
%
-
0.0
%
Deduct: Legal reserve
26.7
0.7
%
-
0.0
%
56.7
0.4
%
-
0.0
%
Total adjustments
2,538.8
69.0
%
-
0.0
%
2,568.8
18.6
%
-
0.0
%
Adjusted selling, general and administrative expenses (Non-GAAP)
$
921.4
25.0
%
$
809.0
23.6
%
$
3,406.8
24.6
%
$
3,026.7
23.4
%
Reconciliation of Adjusted Selling, General and
Administrative Expenses - Dollar Tree Segment 14 Weeks
Ended 13 Weeks Ended 53 Weeks Ended 52 Weeks
Ended February 3, 2024 January 28, 2023
February 3, 2024 January 28, 2023 Selling, general
and administrative expenses (GAAP)
$
1,070.6
21.6
%
$
856.5
19.9
%
$
3,730.2
22.2
%
$
3,239.7
21.0
%
Deduct: Long-lived asset impairment
10.8
0.2
%
-
0.0
%
10.8
0.1
%
-
0.0
%
Total adjustments
10.8
0.2
%
-
0.0
%
10.8
0.1
%
-
0.0
%
Adjusted selling, general and administrative expenses (Non-GAAP)
$
1,059.8
21.4
%
$
856.5
19.9
%
$
3,719.4
22.1
%
$
3,239.7
21.0
%
DOLLAR TREE, INC. Reconciliation of Non-GAAP
Financial Measures (In millions, except per share data)
(Unaudited) Reconciliation of Adjusted Operating
Income 14 Weeks Ended 13 Weeks Ended 53 Weeks
Ended 52 Weeks Ended February 3, 2024 January
28, 2023 February 3, 2024 January 28, 2023
Operating income (loss) (GAAP)
$
(1,891.0
)
(21.9
%)
$
618.1
8.0
%
$
(881.8
)
(2.9
%)
$
2,236.3
7.9
%
Gross profit adjustments: Add: Inventory markdowns - store closures
80.6
0.9
%
-
0.0
%
80.6
0.3
%
-
0.0
%
Add: Distribution costs - store closures
5.6
0.1
%
-
0.0
%
5.6
0.0
%
-
0.0
%
SG&A adjustments: Add: Goodwill impairment
1,069.0
12.4
%
-
0.0
%
1,069.0
3.5
%
-
0.0
%
Add: Trade name intangible asset impairment
950.0
11.0
%
-
0.0
%
950.0
3.1
%
-
0.0
%
Add: Long-lived asset impairment
503.9
5.8
%
-
0.0
%
503.9
1.6
%
-
0.0
%
Add: Legal reserve
26.7
0.3
%
-
0.0
%
56.7
0.2
%
-
0.0
%
Add: Other consulting fees
4.3
0.1
%
-
0.0
%
4.3
0.0
%
-
0.0
%
Total adjustments
2,640.1
30.6
%
-
0.0
%
2,670.1
8.7
%
-
0.0
%
Adjusted operating income (Non-GAAP)
$
749.1
8.7
%
$
618.1
8.0
%
$
1,788.3
5.8
%
$
2,236.3
7.9
%
Reconciliation of Adjusted Operating Income -
Family Dollar Segment 14 Weeks Ended 13 Weeks
Ended 53 Weeks Ended 52 Weeks Ended February
3, 2024 January 28, 2023 February 3, 2024
January 28, 2023 Operating income (loss) (GAAP)
$
(2,617.8
)
(71.2
%)
$
1.4
0.0
%
$
(2,663.5
)
(19.3
%)
$
127.5
1.0
%
Gross profit adjustments: Add: Inventory markdowns - store closures
80.6
2.2
%
-
0.0
%
80.6
0.6
%
-
0.0
%
Add: Distribution costs - store closures
5.6
0.2
%
-
0.0
%
5.6
0.0
%
-
0.0
%
SG&A adjustments: Add: Goodwill impairment
1,069.0
29.1
%
-
0.0
%
1,069.0
7.7
%
-
0.0
%
Add: Trade name intangible asset impairment
950.0
25.8
%
-
0.0
%
950.0
6.9
%
-
0.0
%
Add: Long-lived asset impairment
493.1
13.4
%
-
0.0
%
493.1
3.6
%
-
0.0
%
Add: Legal reserve
26.7
0.7
%
-
0.0
%
56.7
0.4
%
-
0.0
%
Total adjustments
2,625.0
71.4
%
-
0.0
%
2,655.0
19.2
%
-
0.0
%
Adjusted operating income (loss) (Non-GAAP)
$
7.2
0.2
%
$
1.4
0.0
%
$
(8.5
)
(0.1
%)
$
127.5
1.0
%
DOLLAR TREE, INC. Reconciliation of Non-GAAP
Financial Measures (In millions, except per share data)
(Unaudited) Reconciliation of Adjusted Operating
Income - Dollar Tree Segment 14 Weeks Ended 13 Weeks
Ended 53 Weeks Ended 52 Weeks Ended February
3, 2024 January 28, 2023 February 3, 2024
January 28, 2023 Operating income (GAAP)
$
862.6
17.4
%
$
721.3
16.8
%
$
2,278.8
13.6
%
$
2,536.0
16.5
%
SG&A adjustment: Add: Long-lived asset impairment
10.8
0.2
%
-
0.0
%
10.8
0.1
%
-
0.0
%
Total adjustments
10.8
0.2
%
-
0.0
%
10.8
0.1
%
-
0.0
%
Adjusted operating income (Non-GAAP)
$
873.4
17.6
%
$
721.3
16.8
%
$
2,289.6
13.7
%
$
2,536.0
16.5
%
Reconciliation of Adjusted Net Income 14 Weeks
Ended 13 Weeks Ended 53 Weeks Ended 52 Weeks
Ended February 3, 2024 January 28, 2023
February 3, 2024 January 28, 2023 Net income (loss)
(GAAP)
$
(1,709.8
)
$
452.2
$
(998.4
)
$
1,615.4
Gross profit adjustments: Add: Inventory markdowns - store closures
80.6
-
80.6
-
Add: Distribution costs - store closures
5.6
-
5.6
-
SG&A adjustments: Add: Goodwill impairment
1,069.0
-
1,069.0
-
Add: Trade name intangible asset impairment
950.0
-
950.0
-
Add: Long-lived asset impairment
503.9
-
503.9
-
Add: Legal reserve
26.7
-
56.7
-
Add: Other consulting fees
4.3
-
4.3
-
Total adjustments
2,640.1
-
2,670.1
-
Provision for income taxes on adjustments
(374.6
)
-
(378.4
)
-
Adjusted net income (Non-GAAP)
$
555.7
$
452.2
$
1,293.3
$
1,615.4
Reconciliation of Adjusted Effective Tax Rate 14
Weeks Ended 13 Weeks Ended 53 Weeks Ended 52
Weeks Ended February 3, 2024 January 28, 2023
February 3, 2024 January 28, 2023 Effective tax rate
(GAAP)
10.8
%
23.4
%
(1.0
%)
23.5
%
Add: Tax impact of non-GAAP adjustments (c)
12.3
%
0.0
%
24.1
%
0.0
%
Adjusted effective tax rate (Non-GAAP)
23.1
%
23.4
%
23.1
%
23.5
%
(c) Adjustments related to the tax effect of non-GAAP adjustments,
which were determined based on the nature of the underlying
non-GAAP adjustments and their relevant tax rates.
DOLLAR TREE,
INC. Reconciliation of Non-GAAP Financial Measures
(In millions, except per share data) (Unaudited)
Reconciliation of Adjusted Diluted Earnings Per Share
14 WeeksEnded 13 WeeksEnded 53 WeeksEnded
52 WeeksEnded February 3,2024 January 28,2023
February 3,2024 January 28,2023 Diluted net income
(loss) per share (GAAP)
$
(7.85
)
$
2.04
$
(4.55
)
$
7.21
Gross profit adjustments: Add: Inventory markdowns - store closures
0.37
-
0.37
-
Add: Distribution costs - store closures
0.03
-
0.02
-
SG&A adjustments: Add: Goodwill impairment
4.91
-
4.87
-
Add: Trade name intangible asset impairment
4.36
-
4.33
-
Add: Long-lived asset impairment
2.31
-
2.29
-
Add: Legal reserve
0.12
-
0.26
-
Add: Other consulting fees
0.02
-
0.02
-
Total adjustments
12.12
-
12.16
-
Provision for income taxes on adjustments
(1.72
)
-
(1.72
)
-
Adjusted diluted net income per share (Non-GAAP)
$
2.55
$
2.04
$
5.89
$
7.21
Reconciliation of Net Cash Provided by Operating
Activities to Free Cash Flow 14 WeeksEnded 13
WeeksEnded 53 WeeksEnded 52 WeeksEnded
February 3,2024 January 28,2023 February
3,2024 January 28,2023 Net cash provided by operating
activities (GAAP)
$
1,254.9
$
880.7
$
2,684.5
$
1,614.8
Deduct: Capital expenditures
(784.1
)
(328.0
)
(2,101.3
)
(1,248.8
)
Free cash flow (Non-GAAP)
$
470.8
$
552.7
$
583.2
$
366.0
Net cash used in investing activities (GAAP) (d)
$
(785.3
)
$
(327.9
)
$
(2,107.6
)
$
(1,253.8
)
Net cash used in financing activities (GAAP)
(228.1
)
(349.0
)
(530.0
)
(686.8
)
(d) Net cash used in investing activities includes capital
expenditures, which is included in our computation of free cash
flow.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240313982700/en/
Dollar Tree, Inc. Robert A. LaFleur, 757-991-5645 Senior Vice
President, Investor Relations www.DollarTree.com DLTR-E
Dollar Tree (NASDAQ:DLTR)
Historical Stock Chart
From Oct 2024 to Nov 2024
Dollar Tree (NASDAQ:DLTR)
Historical Stock Chart
From Nov 2023 to Nov 2024
