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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Dollar Tree Inc | NASDAQ:DLTR | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.12 | -0.17% | 69.34 | 69.48 | 69.69 | 70.59 | 68.785 | 69.35 | 2,464,458 | 23:45:01 |
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Virginia
|
|
26-2018846
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
500 Volvo Parkway
|
|
|
|
Chesapeake,
|
Virginia
|
|
23320
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
Trading symbol(s)
|
Name of each exchange on which registered
|
Common Stock, par value $.01 per share
|
DLTR
|
NASDAQ Global Select Market
|
Yes
|
☒
|
No
|
☐
|
Yes
|
☒
|
No
|
☐
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
Emerging growth company
|
☐
|
☐
|
Yes
|
☐
|
No
|
☒
|
|
|
Page
|
|
PART I - FINANCIAL INFORMATION
|
|
|
|
|
Item 1.
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
PART II - OTHER INFORMATION
|
|
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
|
13 Weeks Ended
|
|
39 Weeks Ended
|
||||||||||||
|
|
October 31,
|
|
November 2,
|
|
October 31,
|
|
November 2,
|
||||||||
(in millions, except per share data)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net sales
|
|
$
|
6,177.0
|
|
|
$
|
5,746.2
|
|
|
$
|
18,741.4
|
|
|
$
|
17,295.5
|
|
Cost of sales
|
|
4,252.6
|
|
|
4,041.7
|
|
|
13,105.9
|
|
|
12,215.3
|
|
||||
Gross profit
|
|
1,924.4
|
|
|
1,704.5
|
|
|
5,635.5
|
|
|
5,080.2
|
|
||||
Selling, general and administrative expenses
|
|
1,458.9
|
|
|
1,346.1
|
|
|
4,429.2
|
|
|
4,067.4
|
|
||||
Operating income
|
|
465.5
|
|
|
358.4
|
|
|
1,206.3
|
|
|
1,012.8
|
|
||||
Interest expense, net
|
|
38.1
|
|
|
41.4
|
|
|
113.1
|
|
|
122.9
|
|
||||
Other expense, net
|
|
0.1
|
|
|
0.1
|
|
|
0.8
|
|
|
0.7
|
|
||||
Income before income taxes
|
|
427.3
|
|
|
316.9
|
|
|
1,092.4
|
|
|
889.2
|
|
||||
Provision for income taxes
|
|
97.3
|
|
|
61.1
|
|
|
253.3
|
|
|
185.2
|
|
||||
Net income
|
|
$
|
330.0
|
|
|
$
|
255.8
|
|
|
$
|
839.1
|
|
|
$
|
704.0
|
|
Basic net income per share
|
|
$
|
1.39
|
|
|
$
|
1.08
|
|
|
$
|
3.54
|
|
|
$
|
2.97
|
|
Diluted net income per share
|
|
$
|
1.39
|
|
|
$
|
1.08
|
|
|
$
|
3.53
|
|
|
$
|
2.95
|
|
|
|
13 Weeks Ended
|
|
39 Weeks Ended
|
||||||||||||
|
|
October 31,
|
|
November 2,
|
|
October 31,
|
|
November 2,
|
||||||||
(in millions)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Net income
|
|
$
|
330.0
|
|
|
$
|
255.8
|
|
|
$
|
839.1
|
|
|
$
|
704.0
|
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
|
0.6
|
|
|
0.4
|
|
|
(0.8
|
)
|
|
(0.9
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total comprehensive income
|
|
$
|
330.6
|
|
|
$
|
256.2
|
|
|
$
|
838.3
|
|
|
$
|
703.1
|
|
(in millions)
|
|
October 31, 2020
|
|
February 1, 2020
|
|
November 2, 2019
|
||||||
ASSETS
|
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
1,118.3
|
|
|
$
|
539.2
|
|
|
$
|
433.7
|
|
Merchandise inventories
|
|
3,792.3
|
|
|
3,522.0
|
|
|
3,882.9
|
|
|||
Other current assets
|
|
260.4
|
|
|
208.2
|
|
|
255.7
|
|
|||
Total current assets
|
|
5,171.0
|
|
|
4,269.4
|
|
|
4,572.3
|
|
|||
Property, plant and equipment, net of accumulated depreciation
of $4,618.1, $4,194.1 and $4,056.6, respectively
|
|
4,095.6
|
|
|
3,881.8
|
|
|
3,810.7
|
|
|||
Restricted cash
|
|
46.9
|
|
|
46.8
|
|
|
46.6
|
|
|||
Operating lease right-of-use assets
|
|
6,185.1
|
|
|
6,225.0
|
|
|
5,864.6
|
|
|||
Goodwill
|
|
1,983.1
|
|
|
1,983.3
|
|
|
2,296.5
|
|
|||
Trade name intangible asset
|
|
3,100.0
|
|
|
3,100.0
|
|
|
3,100.0
|
|
|||
Deferred tax asset
|
|
23.3
|
|
|
24.4
|
|
|
—
|
|
|||
Other assets
|
|
47.2
|
|
|
43.9
|
|
|
51.4
|
|
|||
Total assets
|
|
$
|
20,652.2
|
|
|
$
|
19,574.6
|
|
|
$
|
19,742.1
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|||
Current portion of long-term debt
|
|
$
|
300.0
|
|
|
$
|
250.0
|
|
|
$
|
750.0
|
|
Current portion of operating lease liabilities
|
|
1,296.5
|
|
|
1,279.3
|
|
|
1,202.6
|
|
|||
Accounts payable
|
|
1,587.2
|
|
|
1,336.5
|
|
|
1,473.1
|
|
|||
Income taxes payable
|
|
—
|
|
|
62.7
|
|
|
—
|
|
|||
Other current liabilities
|
|
858.6
|
|
|
618.0
|
|
|
754.0
|
|
|||
Total current liabilities
|
|
4,042.3
|
|
|
3,546.5
|
|
|
4,179.7
|
|
|||
Long-term debt, net, excluding current portion
|
|
3,225.3
|
|
|
3,522.2
|
|
|
3,520.2
|
|
|||
Operating lease liabilities, long-term
|
|
4,962.1
|
|
|
4,979.5
|
|
|
4,636.0
|
|
|||
Deferred income taxes, net
|
|
1,043.1
|
|
|
984.7
|
|
|
1,001.5
|
|
|||
Income taxes payable, long-term
|
|
31.0
|
|
|
28.9
|
|
|
29.7
|
|
|||
Other liabilities
|
|
387.3
|
|
|
258.0
|
|
|
253.7
|
|
|||
Total liabilities
|
|
13,691.1
|
|
|
13,319.8
|
|
|
13,620.8
|
|
|||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|||
Shareholders’ equity
|
|
6,961.1
|
|
|
6,254.8
|
|
|
6,121.3
|
|
|||
Total liabilities and shareholders’ equity
|
|
$
|
20,652.2
|
|
|
$
|
19,574.6
|
|
|
$
|
19,742.1
|
|
|
|
|
|
|
|
|
||||||
Common shares outstanding
|
|
235.2
|
|
|
236.7
|
|
|
236.7
|
|
|
|
13 Weeks Ended October 31, 2020
|
|||||||||||||||||||||
(in millions)
|
|
Common
Stock
Shares
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
Shareholders'
Equity
|
|||||||||||
Balance at August 1, 2020
|
|
237.3
|
|
|
$
|
2.4
|
|
|
$
|
2,505.5
|
|
|
$
|
(41.2
|
)
|
|
$
|
4,346.9
|
|
|
$
|
6,813.6
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
330.0
|
|
|
330.0
|
|
|||||
Total other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
|||||
Issuance of stock under Employee Stock
Purchase Plan
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|||||
Stock-based compensation, net
|
|
—
|
|
|
—
|
|
|
14.4
|
|
|
—
|
|
|
—
|
|
|
14.4
|
|
|||||
Repurchase of stock
|
|
(2.1
|
)
|
|
—
|
|
|
(200.0
|
)
|
|
—
|
|
|
—
|
|
|
(200.0
|
)
|
|||||
Balance at October 31, 2020
|
|
235.2
|
|
|
$
|
2.4
|
|
|
$
|
2,322.4
|
|
|
$
|
(40.6
|
)
|
|
$
|
4,676.9
|
|
|
$
|
6,961.1
|
|
|
|
39 Weeks Ended October 31, 2020
|
|||||||||||||||||||||
(in millions)
|
|
Common
Stock
Shares
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
Shareholders'
Equity
|
|||||||||||
Balance at February 1, 2020
|
|
236.7
|
|
|
$
|
2.4
|
|
|
$
|
2,454.4
|
|
|
$
|
(39.8
|
)
|
|
$
|
3,837.8
|
|
|
$
|
6,254.8
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
839.1
|
|
|
839.1
|
|
|||||
Total other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
|
—
|
|
|
(0.8
|
)
|
|||||
Issuance of stock under Employee Stock
Purchase Plan
|
|
0.1
|
|
|
—
|
|
|
7.6
|
|
|
—
|
|
|
—
|
|
|
7.6
|
|
|||||
Exercise of stock options
|
|
0.1
|
|
|
—
|
|
|
6.7
|
|
|
—
|
|
|
—
|
|
|
6.7
|
|
|||||
Stock-based compensation, net
|
|
0.4
|
|
|
—
|
|
|
53.7
|
|
|
—
|
|
|
—
|
|
|
53.7
|
|
|||||
Repurchase of stock
|
|
(2.1
|
)
|
|
—
|
|
|
(200.0
|
)
|
|
—
|
|
|
—
|
|
|
(200.0
|
)
|
|||||
Balance at October 31, 2020
|
|
235.2
|
|
|
$
|
2.4
|
|
|
$
|
2,322.4
|
|
|
$
|
(40.6
|
)
|
|
$
|
4,676.9
|
|
|
$
|
6,961.1
|
|
|
|
13 Weeks Ended November 2, 2019
|
|||||||||||||||||||||
(in millions)
|
|
Common
Stock
Shares
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
Shareholders'
Equity
|
|||||||||||
Balance at August 3, 2019
|
|
236.8
|
|
|
$
|
2.4
|
|
|
$
|
2,443.9
|
|
|
$
|
(39.6
|
)
|
|
$
|
3,459.0
|
|
|
$
|
5,865.7
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
255.8
|
|
|
255.8
|
|
|||||
Total other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
|||||
Issuance of stock under Employee Stock
Purchase Plan
|
|
—
|
|
|
—
|
|
|
2.3
|
|
|
—
|
|
|
—
|
|
|
2.3
|
|
|||||
Exercise of stock options
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|||||
Stock-based compensation, net
|
|
—
|
|
|
—
|
|
|
7.9
|
|
|
—
|
|
|
—
|
|
|
7.9
|
|
|||||
Repurchase of stock
|
|
(0.1
|
)
|
|
—
|
|
|
(11.6
|
)
|
|
—
|
|
|
—
|
|
|
(11.6
|
)
|
|||||
Balance at November 2, 2019
|
|
236.7
|
|
|
$
|
2.4
|
|
|
$
|
2,443.3
|
|
|
$
|
(39.2
|
)
|
|
$
|
3,714.8
|
|
|
$
|
6,121.3
|
|
|
|
39 Weeks Ended November 2, 2019
|
|||||||||||||||||||||
(in millions)
|
|
Common
Stock
Shares
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
Shareholders'
Equity
|
|||||||||||
Balance at February 2, 2019
|
|
238.1
|
|
|
$
|
2.4
|
|
|
$
|
2,602.7
|
|
|
$
|
(38.3
|
)
|
|
$
|
3,076.1
|
|
|
$
|
5,642.9
|
|
Cumulative effect of adopted accounting
standards, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(65.3
|
)
|
|
(65.3
|
)
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
704.0
|
|
|
704.0
|
|
|||||
Total other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
—
|
|
|
(0.9
|
)
|
|||||
Issuance of stock under Employee Stock
Purchase Plan
|
|
0.1
|
|
|
—
|
|
|
7.5
|
|
|
—
|
|
|
—
|
|
|
7.5
|
|
|||||
Exercise of stock options
|
|
—
|
|
|
—
|
|
|
4.9
|
|
|
—
|
|
|
—
|
|
|
4.9
|
|
|||||
Stock-based compensation, net
|
|
0.4
|
|
|
—
|
|
|
28.2
|
|
|
—
|
|
|
—
|
|
|
28.2
|
|
|||||
Repurchase of stock
|
|
(1.9
|
)
|
|
—
|
|
|
(200.0
|
)
|
|
—
|
|
|
—
|
|
|
(200.0
|
)
|
|||||
Balance at November 2, 2019
|
|
236.7
|
|
|
$
|
2.4
|
|
|
$
|
2,443.3
|
|
|
$
|
(39.2
|
)
|
|
$
|
3,714.8
|
|
|
$
|
6,121.3
|
|
|
|
39 Weeks Ended
|
||||||
|
|
October 31,
|
|
November 2,
|
||||
(in millions)
|
|
2020
|
|
2019
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
839.1
|
|
|
$
|
704.0
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||
Depreciation and amortization
|
|
503.7
|
|
|
466.3
|
|
||
Provision for deferred income taxes
|
|
59.4
|
|
|
50.3
|
|
||
Stock-based compensation expense
|
|
70.5
|
|
|
52.5
|
|
||
Amortization of debt discount and debt-issuance costs
|
|
3.1
|
|
|
4.9
|
|
||
Other non-cash adjustments to net income
|
|
7.4
|
|
|
24.2
|
|
||
Changes in operating assets and liabilities
|
|
250.5
|
|
|
(287.7
|
)
|
||
Net cash provided by operating activities
|
|
1,733.7
|
|
|
1,014.5
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
|
||
Capital expenditures
|
|
(707.0
|
)
|
|
(782.3
|
)
|
||
Proceeds from governmental grant
|
|
—
|
|
|
16.5
|
|
||
Payments for fixed asset disposition
|
|
(0.5
|
)
|
|
(2.9
|
)
|
||
Net cash used in investing activities
|
|
(707.5
|
)
|
|
(768.7
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
|
||
Principal payments for long-term debt
|
|
(250.0
|
)
|
|
—
|
|
||
Proceeds from revolving credit facility
|
|
750.0
|
|
|
—
|
|
||
Repayments of revolving credit facility
|
|
(750.0
|
)
|
|
—
|
|
||
Proceeds from stock issued pursuant to stock-based compensation plans
|
|
14.3
|
|
|
12.3
|
|
||
Cash paid for taxes on exercises/vesting of stock-based compensation
|
|
(16.8
|
)
|
|
(24.3
|
)
|
||
Payments for repurchase of stock
|
|
(194.2
|
)
|
|
(200.0
|
)
|
||
Net cash used in financing activities
|
|
(446.7
|
)
|
|
(212.0
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
|
(0.3
|
)
|
|
(0.2
|
)
|
||
Net increase in cash, cash equivalents and restricted cash
|
|
579.2
|
|
|
33.6
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
|
586.0
|
|
|
446.7
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
1,165.2
|
|
|
$
|
480.3
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
||
Cash paid for:
|
|
|
|
|
|
|
||
Interest, net of amounts capitalized
|
|
$
|
80.4
|
|
|
$
|
89.7
|
|
Income taxes
|
|
$
|
300.5
|
|
|
$
|
248.9
|
|
Non-cash transactions:
|
|
|
|
|
||||
Accrued capital expenditures
|
|
$
|
41.3
|
|
|
$
|
73.8
|
|
|
|
October 31, 2020
|
|
February 1, 2020
|
|
November 2, 2019
|
||||||||||||||||||
(in millions)
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
||||||||||||
Level 1
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Senior Notes
|
|
$
|
3,966.3
|
|
|
$
|
3,531.2
|
|
|
$
|
4,064.5
|
|
|
$
|
3,779.9
|
|
|
$
|
4,530.3
|
|
|
$
|
4,278.6
|
|
|
|
13 Weeks Ended
|
|
39 Weeks Ended
|
||||||||||||
|
|
October 31,
|
|
November 2,
|
|
October 31,
|
|
November 2,
|
||||||||
(in millions, except per share data)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Basic net income per share:
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
330.0
|
|
|
$
|
255.8
|
|
|
$
|
839.1
|
|
|
$
|
704.0
|
|
Weighted average number of shares outstanding
|
|
236.8
|
|
|
236.7
|
|
|
237.0
|
|
|
237.4
|
|
||||
Basic net income per share
|
|
$
|
1.39
|
|
|
$
|
1.08
|
|
|
$
|
3.54
|
|
|
$
|
2.97
|
|
Diluted net income per share:
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
330.0
|
|
|
$
|
255.8
|
|
|
$
|
839.1
|
|
|
$
|
704.0
|
|
Weighted average number of shares outstanding
|
|
236.8
|
|
|
236.7
|
|
|
237.0
|
|
|
237.4
|
|
||||
Dilutive effect of stock options and restricted stock (as
determined by applying the treasury stock method) |
|
1.1
|
|
|
0.8
|
|
|
0.8
|
|
|
0.9
|
|
||||
Weighted average number of shares and dilutive potential
shares outstanding |
|
237.9
|
|
|
237.5
|
|
|
237.8
|
|
|
238.3
|
|
||||
Diluted net income per share
|
|
$
|
1.39
|
|
|
$
|
1.08
|
|
|
$
|
3.53
|
|
|
$
|
2.95
|
|
|
|
Number of Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|||
Nonvested at February 1, 2020
|
|
1,049,081
|
|
|
$
|
95.17
|
|
Granted
|
|
845,394
|
|
|
73.08
|
|
|
Vested
|
|
(528,710
|
)
|
|
91.06
|
|
|
Forfeited
|
|
(80,457
|
)
|
|
83.36
|
|
|
Nonvested at October 31, 2020
|
|
1,285,308
|
|
|
$
|
83.07
|
|
|
|
Number of Shares
|
|
Weighted Average
Grant Date
Fair Value
|
|||
Nonvested at February 1, 2020
|
|
320,500
|
|
|
$
|
99.29
|
|
Granted
|
|
428,377
|
|
|
74.46
|
|
|
Vested
|
|
(221,876
|
)
|
|
88.12
|
|
|
Forfeited
|
|
(89,390
|
)
|
|
89.44
|
|
|
Nonvested at October 31, 2020
|
|
437,611
|
|
|
$
|
82.66
|
|
|
|
13 Weeks Ended
|
|
39 Weeks Ended
|
||||||||||||
(in millions)
|
|
October 31, 2020
|
|
November 2, 2019
|
|
October 31, 2020
|
|
November 2, 2019
|
||||||||
Operating lease cost
|
|
$
|
389.7
|
|
|
$
|
378.2
|
|
|
$
|
1,158.5
|
|
|
$
|
1,139.8
|
|
Variable lease cost
|
|
95.3
|
|
|
94.7
|
|
|
288.0
|
|
|
272.2
|
|
||||
Total lease cost*
|
|
$
|
485.0
|
|
|
$
|
472.9
|
|
|
$
|
1,446.5
|
|
|
$
|
1,412.0
|
|
|
|
|
|
|
|
|
|
|
||||||||
*Excludes short-term lease cost and sublease income, which are immaterial
|
|
|
October 31, 2020
|
|
November 2, 2019
|
||
Weighted-average remaining lease term (years)
|
|
6.2
|
|
|
6.5
|
|
Weighted-average discount rate
|
|
4.0
|
%
|
|
4.4
|
%
|
|
|
13 Weeks Ended
|
|
39 Weeks Ended
|
||||||||||||
(in millions)
|
|
October 31, 2020
|
|
November 2, 2019
|
|
October 31, 2020
|
|
November 2, 2019
|
||||||||
Cash paid for amounts included in the measurement
of lease liabilities: |
|
|
|
|
|
|
|
|
||||||||
Operating cash flows from operating leases
|
|
$
|
383.3
|
|
|
$
|
367.5
|
|
|
$
|
1,132.7
|
|
|
$
|
1,099.1
|
|
Right-of-use assets obtained in exchange for new
operating lease liabilities |
|
314.0
|
|
|
163.9
|
|
|
959.6
|
|
|
593.2
|
|
|
|
13 Weeks Ended
|
|
39 Weeks Ended
|
||||||||||||
|
|
October 31,
|
|
November 2,
|
|
October 31,
|
|
November 2,
|
||||||||
(in millions)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Condensed Consolidated Income Statement Data:
|
|
|
|
|
|
|
|
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
|
||||||||
Dollar Tree
|
|
$
|
3,303.2
|
|
|
$
|
3,074.3
|
|
|
$
|
9,557.6
|
|
|
$
|
8,991.4
|
|
Family Dollar
|
|
2,873.5
|
|
|
2,671.9
|
|
|
9,183.5
|
|
|
8,304.1
|
|
||||
Corporate, support and Other
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
||||
Consolidated Net sales
|
|
$
|
6,177.0
|
|
|
$
|
5,746.2
|
|
|
$
|
18,741.4
|
|
|
$
|
17,295.5
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gross profit:
|
|
|
|
|
|
|
|
|
||||||||
Dollar Tree
|
|
$
|
1,154.2
|
|
|
$
|
1,050.5
|
|
|
$
|
3,206.8
|
|
|
$
|
3,070.8
|
|
Family Dollar
|
|
769.9
|
|
|
654.0
|
|
|
2,428.4
|
|
|
2,009.4
|
|
||||
Corporate, support and Other
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
||||
Consolidated Gross profit
|
|
$
|
1,924.4
|
|
|
$
|
1,704.5
|
|
|
$
|
5,635.5
|
|
|
$
|
5,080.2
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Dollar Tree
|
|
$
|
417.9
|
|
|
$
|
374.6
|
|
|
$
|
1,006.5
|
|
|
$
|
1,105.9
|
|
Family Dollar
|
|
131.4
|
|
|
55.2
|
|
|
472.0
|
|
|
163.9
|
|
||||
Corporate, support and Other
|
|
(83.8
|
)
|
|
(71.4
|
)
|
|
(272.2
|
)
|
|
(257.0
|
)
|
||||
Consolidated Operating income
|
|
465.5
|
|
|
358.4
|
|
|
1,206.3
|
|
|
1,012.8
|
|
||||
Interest expense, net
|
|
38.1
|
|
|
41.4
|
|
|
113.1
|
|
|
122.9
|
|
||||
Other expense, net
|
|
0.1
|
|
|
0.1
|
|
|
0.8
|
|
|
0.7
|
|
||||
Income before income taxes
|
|
$
|
427.3
|
|
|
$
|
316.9
|
|
|
$
|
1,092.4
|
|
|
$
|
889.2
|
|
|
|
As of
|
||||||||||
|
|
October 31,
|
|
February 1,
|
|
November 2,
|
||||||
(in millions)
|
|
2020
|
|
2020
|
|
2019
|
||||||
Condensed Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
||||||
Goodwill:
|
|
|
|
|
|
|
||||||
Dollar Tree
|
|
$
|
423.6
|
|
|
$
|
423.8
|
|
|
$
|
421.6
|
|
Family Dollar
|
|
1,559.5
|
|
|
1,559.5
|
|
|
1,874.9
|
|
|||
Consolidated Goodwill
|
|
$
|
1,983.1
|
|
|
$
|
1,983.3
|
|
|
$
|
2,296.5
|
|
|
|
|
|
|
|
|
||||||
Total assets:
|
|
|
|
|
|
|
||||||
Dollar Tree
|
|
$
|
8,467.4
|
|
|
$
|
7,694.0
|
|
|
$
|
7,531.0
|
|
Family Dollar
|
|
11,703.0
|
|
|
11,484.9
|
|
|
11,858.3
|
|
|||
Corporate, support and Other
|
|
481.8
|
|
|
395.7
|
|
|
352.8
|
|
|||
Consolidated Total assets
|
|
$
|
20,652.2
|
|
|
$
|
19,574.6
|
|
|
$
|
19,742.1
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended
|
|
39 Weeks Ended
|
||||||||||||||||||||||||
|
|
October 31,
|
|
November 2,
|
|
October 31,
|
|
November 2,
|
||||||||||||||||||||
(in millions)
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||||||||||||||
Dollar Tree segment net sales by
merchandise category:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consumable
|
|
$
|
1,564.1
|
|
|
47.4
|
%
|
|
$
|
1,555.8
|
|
|
50.6
|
%
|
|
$
|
4,778.8
|
|
|
50.0
|
%
|
|
$
|
4,567.6
|
|
|
50.8
|
%
|
Variety
|
|
1,520.9
|
|
|
46.0
|
%
|
|
1,328.3
|
|
|
43.2
|
%
|
|
4,473.0
|
|
|
46.8
|
%
|
|
4,127.1
|
|
|
45.9
|
%
|
||||
Seasonal
|
|
218.2
|
|
|
6.6
|
%
|
|
190.2
|
|
|
6.2
|
%
|
|
305.8
|
|
|
3.2
|
%
|
|
296.7
|
|
|
3.3
|
%
|
||||
Total Dollar Tree segment net sales
|
|
$
|
3,303.2
|
|
|
100.0
|
%
|
|
$
|
3,074.3
|
|
|
100.0
|
%
|
|
$
|
9,557.6
|
|
|
100.0
|
%
|
|
$
|
8,991.4
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Family Dollar segment net sales by
merchandise category:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consumable
|
|
$
|
2,255.7
|
|
|
78.5
|
%
|
|
$
|
2,133.9
|
|
|
79.9
|
%
|
|
$
|
7,077.5
|
|
|
77.1
|
%
|
|
$
|
6,481.1
|
|
|
78.0
|
%
|
Home products
|
|
240.1
|
|
|
8.3
|
%
|
|
196.3
|
|
|
7.3
|
%
|
|
802.7
|
|
|
8.7
|
%
|
|
642.6
|
|
|
7.7
|
%
|
||||
Apparel and accessories
|
|
157.4
|
|
|
5.5
|
%
|
|
144.0
|
|
|
5.4
|
%
|
|
517.8
|
|
|
5.6
|
%
|
|
494.3
|
|
|
6.0
|
%
|
||||
Seasonal and electronics
|
|
220.3
|
|
|
7.7
|
%
|
|
197.7
|
|
|
7.4
|
%
|
|
785.5
|
|
|
8.6
|
%
|
|
686.1
|
|
|
8.3
|
%
|
||||
Total Family Dollar segment net sales
|
|
$
|
2,873.5
|
|
|
100.0
|
%
|
|
$
|
2,671.9
|
|
|
100.0
|
%
|
|
$
|
9,183.5
|
|
|
100.0
|
%
|
|
$
|
8,304.1
|
|
|
100.0
|
%
|
•
|
The potential effect of general business or economic conditions on our business, including the COVID-19 pandemic-related recession, consumer spending levels, unemployment and the cost of COVID-19 initiatives;
|
•
|
The uncertainty of the future impact of the COVID-19 pandemic and public health measures on our business and results of operations, including uncertainties surrounding possible disruptions in our supply chain or sources of supply, the physical and financial health of our customers, the effectiveness and duration of government assistance programs to individuals, households and businesses to support consumer spending, levels of foot traffic in our stores, and changes in customer demand for our consumable and essential products as well as our discretionary products;
|
•
|
Our plans and expectations in response to the COVID-19 pandemic, including increased expenses for higher wages and bonuses paid to associates and the cost of personal protective equipment and additional cleaning supplies and protocols for the safety of our associates, and expected delays in new store openings;
|
•
|
Our costs could increase in the future. Certain states and local governments have passed laws to increase the minimum wage beginning in 2021 and it is likely that the federal government will consider whether to pass similar legislation next year;
|
•
|
Our plans relating to new store openings, the renovation of Family Dollar stores to the H2 format, and new store concepts such as Dollar Tree Plus!;
|
•
|
The expected and possible outcome, costs, and impact of pending or potential litigation, arbitrations, other legal proceedings or governmental actions, including the proceeding by the FDA;
|
•
|
The effect of our initiatives to renovate Family Dollar stores to the H2 store format and the performance of that format and the roll-out of adult beverages at Family Dollar and Snack Zone and Crafter’s Square at Dollar Tree, on our results of operations;
|
•
|
Our seasonal sales patterns and customer demand including those relating to the important holiday selling seasons and party merchandise;
|
•
|
The impact of trade relations and the ongoing trade dispute between the United States and China, including the actual and potential effect of Section 301 tariffs on Chinese goods imposed by the United States Trade Representative, and other potential impediments to imports;
|
•
|
The reliability of, and cost associated with, our sources of supply, particularly imported goods such as those sourced from China and domestic goods which are in higher demand as a result of the COVID-19 pandemic; and
|
•
|
Our expectations regarding compliance with debt covenants and stock repurchases.
|
•
|
The continuing COVID-19 pandemic and related public health measures have caused economic disruptions that have adversely affected, and are expected to continue to adversely affect, elements of our business. If the COVID-19 pandemic worsens and new, more restrictive public health measures are implemented, there could be a material adverse impact on our business and results of operations.
|
•
|
Our business and results of operations could be materially harmed if we experience a decline in consumer confidence and spending as a result of unfavorable economic conditions or political uncertainties, for example because government stabilization efforts terminate or are reduced prematurely.
|
•
|
Our profitability is vulnerable to cost increases such as wages. For example, this year we have incurred increased costs associated with responding to the COVID-19 pandemic; and this year and over the last several years we have incurred increased distribution costs. Next year the minimum wage will increase in certain States and localities and may increase nationally depending on the outcome of future legislation proposed in Congress.
|
•
|
Our profitability is affected by the mix of products we sell. For example, in the first quarter of this fiscal year, sales of higher margin Easter merchandise at the Dollar Tree segment suffered as a result of the COVID-19 crisis, and profitability in the Dollar Tree segment was materially adversely affected.
|
•
|
We could continue to encounter higher costs and disruptions in our distribution network. COVID-19 and other factors have slowed the flow of imported and other merchandise and could impact our profitability if product flow is not improved.
|
•
|
Our financial performance could be adversely affected if our supply chain is affected or disrupted by changes in United States trade policy with China, including tariffs or restrictions on trade affecting our foreign suppliers, or by disruptions arising from the outbreak of the COVID-19 pandemic.
|
•
|
Our growth is dependent on our ability to increase sales in existing stores and to expand our square footage profitably.
|
•
|
We rely on computer and technology systems in our operations, and any material failure, inadequacy, interruption or security failure of those systems, including because of a cyber-attack, could harm our ability to effectively operate and grow our business and could adversely affect our financial results.
|
•
|
If we suffer a data breach and are unable to protect our customers’ credit card and confidential information, or other private data relating to our associates, suppliers or our business, we could be subject to negative publicity, costly government enforcement actions or private litigation and increased costs, which could damage our business reputation and adversely affect our results of operations or business.
|
•
|
We could incur losses due to impairment of long-lived assets, goodwill and intangible assets.
|
•
|
Litigation, arbitration, and regulatory actions may adversely affect our business, financial condition and results of operations.
|
•
|
The terms of the agreements governing our indebtedness may restrict our current and future operations, particularly our ability to respond to changes or to pursue our business strategies, and could adversely affect our capital resources, financial condition and liquidity.
|
•
|
Activated our Business Response Team to communicate, assess and address potential exposure throughout the organization;
|
•
|
Provided personal protective equipment including masks, gloves and sanitizers for our store and distribution center associates;
|
•
|
Deployed plexiglass sneeze guards for all registers at all stores;
|
•
|
Deployed hand sanitizer stands in each of our stores;
|
•
|
Equipped stores, distribution centers and the store support center with necessary supplies for enhanced cleaning protocol;
|
•
|
Provided wage premiums for all store and distribution center hourly associates, excluding hourly-paid store managers;
|
•
|
Provided minimum guaranteed sales bonuses for each store manager as well as Thank You bonuses and bonuses for certain salaried associates in our field operations and distribution centers;
|
•
|
Provided pay continuation for associates who test positive or who are Group 1 associates who have to self-quarantine;
|
•
|
Created a “store” within each distribution center to allow our associates to shop for needed supplies at work when supplies were scarce in retail locations;
|
•
|
Eliminated all non-essential air travel;
|
•
|
Utilized technology options for all large group meetings;
|
•
|
Prohibited external visitors’ access to the store support center;
|
•
|
Enabled the majority of our store support center teams to work remotely;
|
•
|
Enabled contactless payments to our POS systems for our customers;
|
•
|
Followed local municipality, county, and state guidelines and regulations needed to be open as an essential business;
|
•
|
Encouraged safe social distancing protocols for our customers with signing, graphics and communications;
|
•
|
Enabled health prescreening questionnaire for all store and distribution associates before entering work; and
|
•
|
Established temperature check protocols for our associates at all distribution centers and the store support center.
|
|
39 Weeks Ended
|
||||||||||||||||
|
October 31, 2020
|
|
November 2, 2019
|
||||||||||||||
|
Dollar Tree
|
|
Family Dollar
|
|
Total
|
|
Dollar Tree
|
|
Family Dollar
|
|
Total
|
||||||
Store Count:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning
|
7,505
|
|
|
7,783
|
|
|
15,288
|
|
|
7,001
|
|
|
8,236
|
|
|
15,237
|
|
New stores
|
262
|
|
|
111
|
|
|
373
|
|
|
286
|
|
|
120
|
|
|
406
|
|
Re-bannered stores
|
(3
|
)
|
|
4
|
|
|
1
|
|
|
190
|
|
|
(199
|
)
|
|
(9
|
)
|
Closings
|
(23
|
)
|
|
(33
|
)
|
|
(56
|
)
|
|
(30
|
)
|
|
(342
|
)
|
|
(372
|
)
|
Ending
|
7,741
|
|
|
7,865
|
|
|
15,606
|
|
|
7,447
|
|
|
7,815
|
|
|
15,262
|
|
Relocations
|
46
|
|
|
31
|
|
|
77
|
|
|
35
|
|
|
10
|
|
|
45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Selling Square Feet (in millions):
|
|
|
|
|
|
|
|
|
|
|
|||||||
Beginning
|
64.6
|
|
|
56.7
|
|
|
121.3
|
|
|
60.3
|
|
|
59.8
|
|
|
120.1
|
|
New stores
|
2.3
|
|
|
0.9
|
|
|
3.2
|
|
|
2.5
|
|
|
0.9
|
|
|
3.4
|
|
Re-bannered stores
|
(0.1
|
)
|
|
0.1
|
|
|
—
|
|
|
1.4
|
|
|
(1.4
|
)
|
|
—
|
|
Closings
|
(0.2
|
)
|
|
(0.2
|
)
|
|
(0.4
|
)
|
|
(0.2
|
)
|
|
(2.4
|
)
|
|
(2.6
|
)
|
Relocations
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
Ending
|
66.7
|
|
|
57.6
|
|
|
124.3
|
|
|
64.1
|
|
|
56.9
|
|
|
121.0
|
|
|
|
13 Weeks Ended October 31, 2020
|
|
39 Weeks Ended October 31, 2020
|
||||||||||||||
|
|
Sales Growth
|
|
Change in
Customer Traffic
|
|
Change in
Average Ticket
|
|
Sales Growth
|
|
Change in
Customer Traffic
|
|
Change in
Average Ticket
|
||||||
Consolidated
|
|
5.1
|
%
|
|
(12.5
|
)%
|
|
20.1
|
%
|
|
6.5
|
%
|
|
(11.3
|
)%
|
|
20.1
|
%
|
Dollar Tree Segment
|
|
4.0
|
%
|
|
(12.6
|
)%
|
|
19.0
|
%
|
|
2.1
|
%
|
|
(13.4
|
)%
|
|
17.9
|
%
|
Family Dollar Segment
|
|
6.4
|
%
|
|
(12.3
|
)%
|
|
21.3
|
%
|
|
11.2
|
%
|
|
(8.4
|
)%
|
|
21.4
|
%
|
|
|
13 Weeks Ended
|
|
|
|
39 Weeks Ended
|
|
|
||||||||||||||
|
|
October 31,
|
|
November 2,
|
|
Percentage
Change
|
|
October 31,
|
|
November 2,
|
|
Percentage
Change
|
||||||||||
(dollars in millions)
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
||||||||||||
Net sales
|
|
$
|
6,177.0
|
|
|
$
|
5,746.2
|
|
|
7.5
|
%
|
|
$
|
18,741.4
|
|
|
$
|
17,295.5
|
|
|
8.4
|
%
|
Comparable store net sales change,
on a constant currency basis
|
|
5.1
|
%
|
|
2.5
|
%
|
|
|
|
6.5
|
%
|
|
2.4
|
%
|
|
|
|
|
13 Weeks Ended
|
|
|
|
39 Weeks Ended
|
|
|
||||||||||||||
|
|
October 31,
|
|
November 2,
|
|
Percentage
Change
|
|
October 31,
|
|
November 2,
|
|
Percentage
Change
|
||||||||||
(dollars in millions)
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
||||||||||||
Gross profit
|
|
$
|
1,924.4
|
|
|
$
|
1,704.5
|
|
|
12.9
|
%
|
|
$
|
5,635.5
|
|
|
$
|
5,080.2
|
|
|
10.9
|
%
|
Gross profit margin
|
|
31.2
|
%
|
|
29.7
|
%
|
|
1.5
|
%
|
|
30.1
|
%
|
|
29.4
|
%
|
|
0.7
|
%
|
•
|
Merchandise cost, including freight, decreased 80 basis points resulting from higher sales of higher margin discretionary merchandise, improved initial mark-on for the Family Dollar segment and lower freight costs.
|
•
|
Occupancy costs decreased 35 basis points as a result of the leverage from the increase in comparable store net sales.
|
•
|
Shrink costs decreased 35 basis points resulting primarily from favorable inventory reconciliations on the Family Dollar segment in the current quarter.
|
•
|
Markdown costs decreased 25 basis points resulting primarily from lower promotional activity in the current year on the Family Dollar segment as a result of the increase in sales and lower seasonal markdowns in both segments resulting from the higher Halloween sell-through in the current quarter. Partially offsetting this decrease was increased uninsured markdown costs for natural disasters.
|
•
|
Distribution costs increased 30 basis points resulting primarily from higher distribution center payroll and depreciation costs. We paid our hourly distribution center associates a premium for all hours worked during the 13 weeks ended October 31, 2020. Total distribution center COVID-19-related expenses were $10.9 million, or 20 basis points of this increase.
|
•
|
Occupancy costs decreased 45 basis points as a result of the leverage from the increase in comparable store net sales.
|
•
|
Merchandise cost, including freight, decreased 30 basis points in the 39 weeks ended October 31, 2020 compared to the same period last year resulting from higher sales of higher margin discretionary merchandise, improved initial mark-on and lower freight costs, partially offset by incremental tariff costs of $34.7 million.
|
•
|
Markdown costs decreased 15 basis points resulting primarily from the prior year including markdowns related to Family Dollar store closures and clearance sales as well as lower promotional activity in the current year on the Family Dollar segment as a result of the increase in sales. This decrease was partially offset by $10.4 million of uninsured markdown costs for stores affected by civil unrest and higher seasonal markdowns in the Dollar Tree segment in the first quarter 2020 due to the lower than planned sell-through on Easter merchandise as a result of the COVID-19 pandemic.
|
•
|
Shrink costs decreased 15 basis points resulting from favorable inventory reconciliations on the Family Dollar segment in the current year, partially offset by unfavorable inventory reconciliations on the Dollar Tree segment.
|
•
|
Distribution costs increased 35 basis points resulting primarily from higher distribution center payroll and depreciation costs. We paid our hourly distribution center associates a per hour premium for all hours worked since March 8, 2020. Total distribution center COVID-19-related expenses were $28.7 million, or 15 basis points of this increase.
|
|
|
13 Weeks Ended
|
|
|
|
39 Weeks Ended
|
|
|
||||||||||||||
|
|
October 31,
|
|
November 2,
|
|
Percentage
Change
|
|
October 31,
|
|
November 2,
|
|
Percentage
Change
|
||||||||||
(dollars in millions)
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
||||||||||||
Selling, general and administrative
expenses |
|
$
|
1,458.9
|
|
|
$
|
1,346.1
|
|
|
8.4
|
%
|
|
$
|
4,429.2
|
|
|
$
|
4,067.4
|
|
|
8.9
|
%
|
As a percentage of Net sales
|
|
23.7
|
%
|
|
23.5
|
%
|
|
0.2
|
%
|
|
23.7
|
%
|
|
23.5
|
%
|
|
0.2
|
%
|
•
|
Payroll expenses increased 70 basis points primarily due to incremental costs associated with the COVID-19 pandemic and an increase in incentive compensation, stock compensation costs and store sales bonuses resulting from the improved operating performance in the quarter. These increases were partially offset by leverage from the comparable store net sales increase. Incremental payroll costs associated with the COVID-19 pandemic, including a $1 per hour premium paid to all store hourly associates for all hours worked during the quarter through September 26, 2020, bonuses for certain field management associates, quarantine pay and sick pay as well as the related payroll taxes, totaled $28.9 million, or 45 basis points.
|
•
|
Other selling, general and administrative expenses decreased 25 basis points as a result of the leverage from the comparable store net sales increase, higher costs in the prior year related to the disposal of fixed assets in connection with the store optimization program on the Family Dollar segment, decreases in promotional advertising on the Family Dollar segment and in travel due to the COVID-19 pandemic. The 13 weeks ended October 31, 2020 included $6.3 million, or 10 basis points, of costs for masks, gloves and cleaning supplies due to the COVID-19 pandemic.
|
•
|
Store facility costs decreased 20 basis points due to leverage from the comparable store net sales increase and lower electricity costs.
|
•
|
Payroll expenses increased 75 basis points primarily due to incremental costs associated with the COVID-19 pandemic and an increase in incentive compensation, stock compensation costs and store sales bonuses resulting from improved operating performance in the Family Dollar segment. These increases were partially offset by leverage from the comparable store net sales increase, lower benefits costs and lower temporary help expenses as a result of the prior year including higher expenses to support store-level initiatives. Office payroll costs also decreased resulting from the store support center consolidation in the prior year and other leadership changes made in the fourth quarter of fiscal 2019. Incremental payroll costs associated with the COVID-19 pandemic, including a per hour premium paid to all store hourly associates for all hours worked March 8, 2020 through September 26, 2020, bonuses for certain field management associates, guaranteed bonus payouts and Thank You bonuses for store managers, quarantine pay and sick pay as well as the related payroll taxes, totaled $201.0 million, or 105 basis points.
|
•
|
Other selling, general and administrative expenses decreased 35 basis points as a result of the leverage from the comparable store net sales increase, higher costs in the prior year related to the disposal of fixed assets in connection with the store optimization program on the Family Dollar segment, decreases in promotional advertising on the Family Dollar segment and in travel due to the COVID-19 pandemic and higher costs in the prior year for the store support center consolidation. These improvements were partially offset by an increase in insurance costs related to unfavorable development of general liability claims. The 39 weeks ended October 31, 2020 included $23.5 million, or 15 basis points, of costs for the installation of plexiglass sneeze guards at all registers in our stores and incremental costs for masks, gloves and cleaning supplies due to the COVID-19 pandemic, and $1.8 million of expenses, primarily for fixed asset disposals, related to stores damaged in civil unrest.
|
•
|
Store facility costs decreased 25 basis points due to leverage from the comparable store net sales increase and lower electricity costs. The 39 weeks ended October 31, 2020 included $3.9 million primarily for uninsured repairs related to stores damaged in civil unrest and $1.1 million of COVID-19-related expenses.
|
|
|
13 Weeks Ended
|
|
|
|
39 Weeks Ended
|
|
|
||||||||||||||
|
|
October 31,
|
|
November 2,
|
|
Percentage
Change
|
|
October 31,
|
|
November 2,
|
|
Percentage
Change
|
||||||||||
(dollars in millions)
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
||||||||||||
Operating income
|
|
$
|
465.5
|
|
|
$
|
358.4
|
|
|
29.9
|
%
|
|
$
|
1,206.3
|
|
|
$
|
1,012.8
|
|
|
19.1
|
%
|
Operating income margin
|
|
7.5
|
%
|
|
6.2
|
%
|
|
1.3
|
%
|
|
6.4
|
%
|
|
5.9
|
%
|
|
0.5
|
%
|
|
|
13 Weeks Ended
|
|
|
|
39 Weeks Ended
|
|
|
||||||||||||||
|
|
October 31,
|
|
November 2,
|
|
Percentage
Change
|
|
October 31,
|
|
November 2,
|
|
Percentage
Change
|
||||||||||
(dollars in millions)
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
||||||||||||
Interest expense, net
|
|
$
|
38.1
|
|
|
$
|
41.4
|
|
|
(8.0
|
)%
|
|
$
|
113.1
|
|
|
$
|
122.9
|
|
|
(8.0
|
)%
|
|
|
13 Weeks Ended
|
|
|
|
39 Weeks Ended
|
|
|
||||||||||||||
|
|
October 31,
|
|
November 2,
|
|
Percentage
Change
|
|
October 31,
|
|
November 2,
|
|
Percentage
Change
|
||||||||||
(dollars in millions)
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
||||||||||||
Provision for income taxes
|
|
$
|
97.3
|
|
|
$
|
61.1
|
|
|
59.2
|
%
|
|
$
|
253.3
|
|
|
$
|
185.2
|
|
|
36.8
|
%
|
Effective tax rate
|
|
22.8
|
%
|
|
19.3
|
%
|
|
3.5
|
%
|
|
23.2
|
%
|
|
20.8
|
%
|
|
2.4
|
%
|
|
|
13 Weeks Ended
|
|
39 Weeks Ended
|
||||||||||||||||||||||||
|
|
October 31, 2020
|
|
November 2, 2019
|
|
October 31, 2020
|
|
November 2, 2019
|
||||||||||||||||||||
(in millions)
|
|
$
|
|
% of
Net Sales
|
|
$
|
|
% of
Net Sales
|
|
$
|
|
% of
Net Sales
|
|
$
|
|
% of
Net Sales
|
||||||||||||
Net sales
|
|
$
|
3,303.2
|
|
|
|
|
$
|
3,074.3
|
|
|
|
|
$
|
9,557.6
|
|
|
|
|
$
|
8,991.4
|
|
|
|
||||
Gross profit
|
|
1,154.2
|
|
|
34.9
|
%
|
|
1,050.5
|
|
|
34.2
|
%
|
|
3,206.8
|
|
|
33.6
|
%
|
|
3,070.8
|
|
|
34.2
|
%
|
||||
Operating income
|
|
417.9
|
|
|
12.7
|
%
|
|
374.6
|
|
|
12.2
|
%
|
|
1,006.5
|
|
|
10.5
|
%
|
|
1,105.9
|
|
|
12.3
|
%
|
•
|
Merchandise cost, including freight, decreased 95 basis points primarily due to increased sales of higher margin discretionary merchandise and lower freight costs, partially offset by lower initial mark-on.
|
•
|
Occupancy costs decreased 20 basis points resulting primarily from the leverage due to the comparable store net sales increase in the quarter.
|
•
|
Shrink costs decreased 10 basis points resulting from favorable inventory reconciliations in the current quarter.
|
•
|
Distribution costs increased 50 basis points resulting primarily from higher distribution center payroll and depreciation costs. We paid our hourly distribution center associates a per hour premium for all hours worked during the 13 weeks ended October 31, 2020. Total distribution center COVID-19-related expenses were $6.6 million, or 20 basis points of this increase.
|
•
|
Distribution costs increased 50 basis points resulting primarily from higher distribution center payroll and depreciation costs. We paid our hourly distribution center associates a per hour premium for all hours worked since March 8, 2020. Total distribution center COVID-19-related expenses were $16.9 million, or 20 basis points of this increase.
|
•
|
Shrink costs increased 10 basis points resulting from unfavorable inventory reconciliations in the current year and an increase in the shrink accrual rate.
|
•
|
Markdown costs increased 10 basis points resulting from increased seasonal markdowns from the lower than planned sell-through on Easter merchandise as a result of the COVID-19 pandemic and $2.9 million of uninsured markdown costs for stores affected by civil unrest.
|
•
|
Merchandise cost, including freight, decreased 10 basis points primarily due to increased sales of higher margin discretionary merchandise and lower freight costs, partially offset by incremental tariffs of $26.1 million and lower initial mark-on. Discretionary merchandise sales were a higher proportion of total sales in the second and third quarters of 2020 while they were a lower proportion in the first quarter of 2020 as a result of the lower Easter sales due to the COVID-19 pandemic.
|
•
|
Payroll expenses increased 50 basis points primarily due to incremental costs associated with the COVID-19 pandemic and increased incentive compensation and store sales bonus expenses resulting from improved operating results in the current quarter. These increases were partially offset by leverage from the comparable store net sales increase and lower office payroll costs. Incremental payroll costs associated with the COVID-19 pandemic, including a $1 per hour premium paid to all store hourly associates for all hours worked during the quarter through September 26, 2020, bonuses for certain field management associates, quarantine pay and sick pay as well as the related payroll taxes, totaled $17.3 million, or 50 basis points.
|
•
|
Store facility costs decreased 15 basis points due to leverage from the comparable store net sales increase and lower electricity costs.
|
•
|
Other selling, general and administrative expenses decreased 5 basis points resulting from the leverage from the comparable store net sales increase and lower travel costs due to the COVID-19 pandemic. The 13 weeks ended October 31, 2020 included $4.5 million, or 15 basis points, of costs for masks, gloves and cleaning supplies due to the COVID-19 pandemic.
|
•
|
Payroll expenses increased 125 basis points primarily due to incremental costs associated with the COVID-19 pandemic, including a per hour premium paid to all store hourly associates for all hours worked from March 8, 2020 through September 26, 2020, bonuses for certain field management associates, guaranteed bonus payouts and Thank You bonuses for store managers, quarantine pay and sick pay as well as the related payroll taxes. These costs totaled $117.0 million, or 120 basis points, for the 39 weeks ended October 31, 2020.
|
•
|
Other selling, general and administrative expenses increased 5 basis points as a result of an increase in insurance costs related to unfavorable development of general liability claims, partially offset by lower travel costs due to the COVID-19 pandemic. The 39 weeks ended October 31, 2020 included $12.8 million, or 15 basis points, of costs for the installation of plexiglass sneeze guards at all registers in our stores and incremental costs for masks, gloves and cleaning supplies due to the COVID-19 pandemic.
|
•
|
Store facility costs decreased 10 basis points due to leverage from the comparable store net sales increase. The 39 weeks ended October 31, 2020 included expenses for repairs to stores damaged in civil unrest.
|
|
|
13 Weeks Ended
|
|
39 Weeks Ended
|
||||||||||||||||||||||||
|
|
October 31, 2020
|
|
November 2, 2019
|
|
October 31, 2020
|
|
November 2, 2019
|
||||||||||||||||||||
(in millions)
|
|
$
|
|
% of
Net Sales
|
|
$
|
|
% of
Net Sales
|
|
$
|
|
% of
Net Sales
|
|
$
|
|
% of
Net Sales
|
||||||||||||
Net sales
|
|
$
|
2,873.5
|
|
|
|
|
$
|
2,671.9
|
|
|
|
|
$
|
9,183.5
|
|
|
|
|
$
|
8,304.1
|
|
|
|
||||
Gross profit
|
|
769.9
|
|
|
26.8
|
%
|
|
654.0
|
|
|
24.5
|
%
|
|
2,428.4
|
|
|
26.4
|
%
|
|
2,009.4
|
|
|
24.2
|
%
|
||||
Operating income
|
|
131.4
|
|
|
4.6
|
%
|
|
55.2
|
|
|
2.1
|
%
|
|
472.0
|
|
|
5.1
|
%
|
|
163.9
|
|
|
2.0
|
%
|
•
|
Shrink expense decreased 70 basis points resulting from favorable inventory reconciliations in the current year.
|
•
|
Merchandise cost, including freight, decreased 60 basis points primarily due to increased sales of higher margin discretionary merchandise, improved initial mark-on and lower freight costs.
|
•
|
Occupancy costs decreased 60 basis points as a result of the leverage from the comparable store net sales increase.
|
•
|
Markdowns at cost decreased 40 basis points primarily due to lower promotional activity and lower clearance markdowns in the current year as a result of higher sell-through of seasonal and apparel merchandise.
|
•
|
Distribution costs were flat as higher distribution center payroll costs were offset by lower distribution center asset disposals and leverage from the comparable store net sales increase. We paid our hourly distribution center associates a per hour premium for all hours worked during the 13 weeks ended October 31, 2020. Total distribution center COVID-19-related expenses were $4.3 million, or 15 basis points.
|
•
|
Occupancy costs decreased 90 basis points as a result of the leverage from the comparable store net sales increase and higher expense in the prior year related to the accelerated amortization of the right-of-use assets for stores we closed during 2019.
|
•
|
Merchandise cost, including freight, decreased 65 basis points primarily due to increased sales of higher margin discretionary merchandise and improved initial mark-on, partially offset by incremental tariffs of $8.7 million.
|
•
|
Shrink expense decreased 45 basis points resulting from favorable inventory reconciliations in the current year and the prior year including an increase in the accrual rate.
|
•
|
Markdowns at cost decreased 40 basis points primarily due to store closure and clearance sale markdowns in the prior year and lower promotional activity in the current year, partially offset by $7.5 million of uninsured markdown costs for stores affected by civil unrest.
|
•
|
Distribution costs increased 15 basis points resulting primarily from higher distribution center payroll costs. We paid our hourly distribution center associates a per hour premium for all hours worked since March 8, 2020. Total distribution center COVID-19-related expenses were $11.8 million, or 15 basis points of this increase.
|
•
|
Other selling, general and administrative expenses decreased 20 basis points primarily due to a decrease in promotional advertising and travel during the COVID-19 pandemic, higher costs in the prior year related to the disposal of fixed assets in connection with the store optimization program and leverage associated with the increase in comparable store net sales during the period, partially offset by an increase in supplies expense. The 13 weeks ended October 31, 2020 included $1.7 million or 5 basis points of costs for masks, gloves and cleaning supplies due to the COVID-19 pandemic.
|
•
|
Store facility costs decreased 20 basis points primarily due to leverage from the comparable store net sales increase and lower electricity costs.
|
•
|
Depreciation and amortization expense decreased 10 basis points primarily due to leverage from the comparable store net sales increase.
|
•
|
Payroll expenses increased 35 basis points primarily due to incremental costs associated with the COVID-19 pandemic and increased incentive compensation and store sales bonus expenses resulting from the improved Family Dollar operating performance, partially offset by leverage from the comparable store net sales increase. Incremental costs associated with the COVID-19 pandemic, including a $1 per hour premium paid to all store hourly associates for all hours worked during the current quarter through September 26, 2020, quarantine pay and sick pay as well as the related payroll taxes, totaled $11.4 million or 40 basis points.
|
•
|
Other selling, general and administrative expenses decreased 50 basis points primarily due to a decrease in promotional advertising and travel during the COVID-19 pandemic, higher costs in the prior year related to the disposal of fixed assets in connection with the store optimization program and leverage associated with the increase in comparable store net sales during the period, partially offset by an increase in insurance costs related to unfavorable development of general liability claims. The 39 weeks ended October 31, 2020 included $9.3 million or 10 basis points of costs for masks, gloves and cleaning supplies due to the COVID-19 pandemic and $1.9 million of expenses primarily for fixed asset disposals for stores damaged by civil unrest.
|
•
|
Store facility costs decreased 35 basis points primarily due to leverage from the comparable store net sales increase and lower electricity costs. The 39 weeks ended October 31, 2020 included $2.5 million of incremental repairs and maintenance expenses for stores damaged by civil unrest.
|
•
|
Depreciation and amortization expense decreased 10 basis points primarily due to leverage from the comparable store net sales increase.
|
•
|
Payroll expenses were flat as incremental costs associated with the COVID-19 pandemic and increased incentive compensation and store sales bonus expenses resulting from the improved Family Dollar operating performance were offset by leverage from the comparable store net sales increase and decreases in workers’ compensation expenses and benefits costs, as well as lower temporary help expenses as a result of the prior year including higher expenses to support store-level initiatives. Incremental costs associated with the COVID-19 pandemic, including a per hour premium paid to all store hourly associates for all hours worked from March 8, 2020 to September 26, 2020, bonuses for certain field management associates, guaranteed bonus payouts and Thank You bonuses for store managers, quarantine pay and sick pay as well as the related payroll taxes totaled $83.4 million or 90 basis points.
|
|
|
39 Weeks Ended
|
||||||
|
|
October 31,
|
|
November 2,
|
||||
(in millions)
|
|
2020
|
|
2019
|
||||
Net cash provided by (used in):
|
|
|
|
|
||||
Operating activities
|
|
$
|
1,733.7
|
|
|
$
|
1,014.5
|
|
Investing activities
|
|
(707.5
|
)
|
|
(768.7
|
)
|
||
Financing activities
|
|
(446.7
|
)
|
|
(212.0
|
)
|
•
|
product safety matters, which may include regulatory matters.
|
•
|
Increases in the cost of operating our stores and distribution centers, including temporarily higher wages and bonuses paid to associates, enhanced cleaning protocols and the cost of personal protection equipment.
|
•
|
Disruptions in the patterns of consumer demand, which has led to, among other things, decreased demand for Easter and party merchandise in the Dollar Tree segment, an increase in consumer demand for household cleaning and other essential supplies and corresponding difficulty in our ability to maintain those items in stock, fluctuations in demand for discretionary products, and an increase in demand for online sales (which is an insignificant part of our business) and home or curbside deliveries (which we do not offer).
|
•
|
Decreasing foot traffic in our stores as a result of the promotion of social distancing, the adoption of various governmental restrictions on personal and business activities and changing consumer attitudes with respect to in-person shopping and changes in shopping patterns.
|
•
|
The signing of an Executive Order by President Trump revoking Hong Kong’s preferential trade status with the U.S.;
|
•
|
The closing of the Chinese diplomatic consulate in Houston, Texas and of the U.S. consulate in the city of Chengdu, China and the imposition of sanctions by the U.S. on officials of China and Hong Kong and by the Chinese government on certain U.S. lawmakers; and
|
•
|
Steps by the U.S. government to restrict access by Chinese companies to U.S.-developed semiconductor technology and to require a Chinese digital company to divest operations in the United States.
|
Fiscal Period
|
|
Total number of shares purchased
|
|
Average price paid per share
|
|
Total number of shares purchased as part of publicly announced plans or programs
|
|
Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions)
|
||||||
August 2 - August 29, 2020
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
800.0
|
|
August 30 - October 3, 2020
|
|
580,296
|
|
|
90.46
|
|
|
580,296
|
|
|
747.5
|
|
||
October 4 - October 31, 2020
|
|
1,574,008
|
|
|
93.71
|
|
|
1,574,008
|
|
|
600.0
|
|
||
Total
|
|
2,154,304
|
|
|
$
|
92.84
|
|
|
2,154,304
|
|
|
$
|
600.0
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit
|
|
Exhibit Description
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
|
Filed Herewith
|
3.1
|
|
|
8-K
|
|
3.1
|
|
6/21/2013
|
|
|
|
3.2
|
|
|
8-K
|
|
3.1
|
|
6/12/2020
|
|
|
|
31.1
|
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
|
|
|
|
|
|
|
X
|
|
32.1
|
|
|
|
|
|
|
|
|
X
|
|
32.2
|
|
|
|
|
|
|
|
|
X
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit
|
|
Exhibit Description
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
|
Filed Herewith
|
101
|
|
The following financial statements from our Form 10-Q for the fiscal quarter ended October 31, 2020, formatted in Inline XBRL: (i) Condensed Consolidated Income Statements, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Shareholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows and (vi) Notes to Unaudited Condensed Consolidated Financial Statements
|
|
|
|
|
|
|
|
X
|
104
|
|
The cover page from our Form 10-Q for the fiscal quarter ended October 31, 2020, formatted in Inline XBRL and contained in Exhibit 101
|
|
|
|
|
|
|
|
X
|
|
|
|
DOLLAR TREE, INC.
|
|
|
|
|
Date:
|
November 24, 2020
|
By:
|
/s/ Kevin S. Wampler
|
|
|
|
Kevin S. Wampler
|
|
|
|
Chief Financial Officer
|
|
|
|
(principal financial officer)
|
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