Dollar Tree Segment

Family Dollar Segment

5bbc17b6a956f9571b8c427fe0a2fa5af8232d280cbfd74a095be309ee280bd7

Dollar Tree, Inc. operates over 16,700 retail discount stores across the United States and Canada, focusing on providing value through a variety of merchandise at competitive price points **[0000935703-24-000011_dltr-20240203.htm:5]** **[0000935703-24-000011_dltr-20240203.htm:6]**. The company operates under two main segments: Dollar Tree and Family Dollar, each offering a diverse range of products **[0000935703-24-000011_dltr-20240203.htm:97]**. Dollar Tree stores are known for their fixed price offerings, while Family Dollar stores provide a mix of consumable and discretionary merchandise in convenient neighborhood locations **[0000935703-24-000011_dltr-20240203.htm:8]**.

1. **Dollar Tree** - Offers a variety of merchandise predominantly at the $1.25 price point, with additional offerings at $3, $4, and $5. Includes operations under the "Dollar Tree" and "Dollar Tree Canada" brands, focusing on consumables, discretionary items, and seasonal goods **[0000935703-24-000011_dltr-20240203.htm:5]** **[0000935703-24-000011_dltr-20240203.htm:6]** **[0000935703-24-000011_dltr-20240203.htm:97]**.
2. **Family Dollar** - Operates general merchandise retail discount stores providing competitively-priced consumable merchandise such as food, beverages, health and personal care products, along with discretionary items like home products, apparel, and seasonal goods **[0000935703-24-000011_dltr-20240203.htm:8]** **[0000935703-24-000011_dltr-20240203.htm:6]**.

a01dbaa6acb9203bb4e65d0e4abd96392ed990f975553e478ab14042f44b9e7d

| Metric (USD) | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 |
|--------------|---------|---------|---------|---------|---------|
| Dollar Tree Segment | **$235**  **[0000935703-24-000041_dltr-20240803.htm:19]**  | **$235**  **[0000935703-24-000029_dltr-20240504.htm:18]**  | **$227**  **[0000935703-23-000063_dltr-20231028.htm:20]**  | **$227**  **[0000935703-23-000063_dltr-20231028.htm:20]**  | **$225**  **[0000935703-23-000050_dltr-20230729.htm:16]**  |
| Family Dollar Segment | **$225**  **[0000935703-24-000041_dltr-20240803.htm:19]**  | **$227**  **[0000935703-24-000029_dltr-20240504.htm:18]**  | **$218**  **[0000935703-23-000063_dltr-20231028.htm:20]**  | **$218**  **[0000935703-23-000063_dltr-20231028.htm:20]**  | **$218**  **[0000935703-23-000050_dltr-20230729.htm:16]**  |
| Total (Consolidated) | **$231**  **[0000935703-24-000041_dltr-20240803.htm:19]**  | **$231**  **[0000935703-24-000029_dltr-20240504.htm:18]**  | **$222**  **[0000935703-23-000063_dltr-20231028.htm:20]**  | **$222**  **[0000935703-23-000063_dltr-20231028.htm:20]**  | **$222**  **[0000935703-23-000050_dltr-20230729.htm:16]**  |

aa1fcaf018ea5abb96a77614c5ac627fbd5797c4e3ecc81e56c9cdcad9375e3f

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

cab51e2b0e06cf108af31d2214f8a873c5fe1e7a66e11b752d62de5966311d3e

801fd3f756d6e6421bf3ded492d3eb34a4800ce444a3ec138208e4ee6bed3a2a

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

Selling, General, and Administrative Expenses (SG&A) [USD, Millions]

Research and Development (R&D) [USD, Millions]

Depreciation and Amortization (D&A) [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

Earnings Per Share (EPS) - Basic [USD]

Earnings Per Share (EPS) - Diluted [USD]

74c4af6a95506fc9f630f269b0d298b42d6dd85cbbe81a3279b6489cbb4c9e91

| Metric (Million USD) | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Dollar Tree Segment  | **$3,756.1**  **[0000935703-22-000072_ex991q3-22earningspressrel.htm:5]**  | **$4,296.7**  **[0000935703-23-000011_ex991q4-22earningsannounce.htm:6]**  | **$3,931.7**  **[0000935703-23-000031_dltr-20230429.htm:9]**  | **$3,873.4**  **[0000935703-23-000050_dltr-20230729.htm:9]**  | **$4,003.8**  **[0000935703-23-000062_ex991q3-23earningspressrel.htm:4]**  | **$4,961.4**  **[0000935703-24-000007_ex991q4-23earningspressrel.htm:5]**  | **$4,165.6**  **[0000935703-24-000029_dltr-20240504.htm:10]**  | **$4,065.5**  **[0000935703-24-000039_ex991q2-24earningspr.htm:5]**  |
| Family Dollar Segment| **$3,180.5**  **[0000935703-22-000072_ex991q3-22earningspressrel.htm:5]**  | **$3,419.5**  **[0000935703-23-000011_ex991q4-22earningsannounce.htm:6]**  | **$3,387.8**  **[0000935703-23-000031_dltr-20230429.htm:9]**  | **$3,446.7**  **[0000935703-23-000050_dltr-20230729.htm:9]**  | **$3,305.3**  **[0000935703-23-000062_ex991q3-23earningspressrel.htm:4]**  | **$3,671.5**  **[0000935703-24-000007_ex991q4-23earningspressrel.htm:5]**  | **$3,460.8**  **[0000935703-24-000029_dltr-20240504.htm:10]**  | **$3,307.2**  **[0000935703-24-000039_ex991q2-24earningspr.htm:5]**  |
| Total Net Sales      | **$6,936.6**  **[0000935703-22-000072_ex991q3-22earningspressrel.htm:5]**  | **$7,716.2**  **[0000935703-23-000011_ex991q4-22earningsannounce.htm:6]**  | **$7,319.5**  **[0000935703-23-000031_dltr-20230429.htm:9]**  | **$7,320.1**  **[0000935703-23-000050_dltr-20230729.htm:9]**  | **$7,309.1**  **[0000935703-23-000062_ex991q3-23earningspressrel.htm:4]**  | **$8,632.9**  **[0000935703-24-000007_ex991q4-23earningspressrel.htm:5]**  | **$7,626.4**  **[0000935703-24-000029_dltr-20240504.htm:10]**  | **$7,372.7**  **[0000935703-24-000039_ex991q2-24earningspr.htm:5]**  |

5cb15857b9f6afbc402636ba8e43953aba40f1b711e789cb37a147d58d44b67c

24e9a811c5be8eecc8054dd5e653280806792edd2eb32cbf5ad04f9c1025572a

1. Given the **deceleration in comp sales lift** in Q3 due to the majority of store conversions shifting from 2.0 to 3.0 formats, how do you plan to balance the conversion cadence to maintain strong comp growth as you proceed with the multi-price rollout?  **[DLTR_3410732_13]** **[DLTR_3410732_2]** 

2. With the **ongoing strategic review of Family Dollar**, and no guidance provided on its potential impact for FY2025, how are you preparing for possible outcomes, and what steps are you taking to mitigate uncertainty in your earnings outlook?  **[DLTR_3410732_9]** **[DLTR_3410732_4]** 

3. Considering the **potential impact of new tariffs** under the new administration and your past experience in mitigating tariff effects, can you provide details on your contingency plans and how they might influence your **supply chain and pricing strategies**?  **[DLTR_3410732_9]** **[DLTR_3410732_4]** 

4. Given the recurrence of **general liability claims** impacting your financials and your reliance on adjustments made this year, what proactive measures are you implementing to reduce future claims, and how confident are you that current reserves are adequate?  **[DLTR_3410732_17]** 

5. With **reduced SNAP benefits** contributing to a **30 basis point comp headwind** and evidence of **belt-tightening among lower-income customers**, how are you adjusting your strategies at Family Dollar to sustain traffic and sales momentum amid these challenging consumer trends?  **[DLTR_3410732_4]** **[DLTR_3410732_12]** **[DLTR_3410732_2]** 

9b4f03837baf4139521f9d04e0661146fbe4c5a5ab04f327bd61f88a863170fb

- Dollar stores
- Mass merchandisers
- Online retailers
- Discount retailers
- Drug stores
- Convenience stores
- Independently-operated discount stores
- Grocery stores
- A wide variety of other retailers  **[0000935703-24-000011_dltr-20240203.htm:9]** 

16344437c3315a20f2e848645549905f6b9e81ffe2e9b85c32768e36850e4058

**Quarterly guidance for Q4 2025:**
- **Net Sales**: $8.1B – $8.3B  **[DLTR_3410732_7]**  (raised from $7.4B – $7.6B  **[DLTR_3400513_8]** **[DLTR_3400513_7]** )  
- **Adjusted EPS**: $2.10 – $2.30  **[DLTR_3410732_7]**  (raised from $1.05 – $1.15  **[DLTR_3400513_8]** **[DLTR_3400513_7]** )  
- **Family Dollar Net Sales**: Decline by 10% – 12% year-over-year  **[DLTR_3410732_7]**  (lowered from decline by 1% – 3% year-over-year  **[DLTR_3400513_8]** **[DLTR_3400513_7]** )  

**Annual guidance for FY 2025:**
- **Net Sales**: $30.7B – $30.9B  **[DLTR_3410732_7]**  (raised from $30.6B – $30.9B  **[DLTR_3400513_8]** **[DLTR_3400513_7]** )  
- **Adjusted EPS**: $5.31 – $5.51  **[DLTR_3410732_7]**  (no change from prior guidance  **[DLTR_3400513_8]** **[DLTR_3400513_7]** )  
- **Family Dollar Net Sales**: Decline by 3.5% – 4.5% year-over-year  **[DLTR_3410732_7]**  (no change from prior guidance  **[DLTR_3400513_8]** **[DLTR_3400513_7]** )  

a0596544a4a347ecca934eaa0a412bebdf6a0fa0200047c7cd3808814dac7093

cba41ddb66c598b625f5312424892038d0119a07a02401b477001021cfd7b79f

### Q3 2025 Earnings Call
- **Issued Period:** Q3 2025
- **Guided Period:** Q4 2025 and FY 2025
- **Guidance:**
  - **Q4 2025:**
    - **Net Sales:** $8.1 billion to $8.3 billion
    - **Adjusted EPS:** $2.10 to $2.30
    - **Family Dollar Net Sales:** Decline by 10% to 12% year-over-year
  - **FY 2025:**
    - **Net Sales:** $30.7 billion to $30.9 billion
    - **Adjusted EPS:** $5.31 to $5.51
    - **Family Dollar Net Sales:** Decline by 3.5% to 4.5% year-over-year  **[DLTR_3410732_7]** .

### Q2 2025 Earnings Call
- **Issued Period:** Q2 2025
- **Guided Period:** Q3 2025 and FY 2025
- **Guidance:**
  - **Q3 2025:**
    - **Net Sales:** $7.4 billion to $7.6 billion
    - **Comp Sales Growth:** Low single-digit growth
    - **Adjusted EPS:** $1.05 to $1.15
    - **Family Dollar Segment Sales:** Decline by 1% to 3% year-over-year
  - **FY 2025:**
    - **Net Sales:** $30.6 billion to $30.9 billion
    - **Comp Sales Growth:** Low single-digit growth
    - **Adjusted EPS:** $5.20 to $5.60
    - **Family Dollar Segment Sales:** Decline by 3% to 5% year-over-year
  - **Additional Factors:**
    - **Incremental Upfront Costs:** Impact Q3 EPS by $0.07 and Q4 EPS by $0.05
    - **Higher D&A Expense:** EPS headwind of $0.12, split evenly between Q3 and Q4  **[DLTR_3400513_8]** **[DLTR_3400513_7]** .

### Q1 2025 Earnings Call
- **Issued Period:** Q1 2025
- **Guided Period:** Q2 2025 and FY 2025
- **Guidance:**
  - **Q2 2025:**
    - **Net Sales:** $7.3 billion to $7.6 billion
    - **Adjusted EPS:** $1 to $1.10
  - **FY 2025:**
    - **Net Sales:** $31 billion to $32 billion
    - **Comparable Net Sales Growth:** Low to mid-single digits
    - **Adjusted EPS:** $6.50 to $7
  - **Additional Notes:**
    - **EPS Impact:** Incremental transportation and other costs due to the loss of the Marietta DC estimated at $0.10 in Q2 and $0.20 to $0.30 on a full-year basis  **[DLTR_3391694_6]** .

### Q4 2024 Earnings Call
- **Issued Period:** Q4 2024
- **Guided Period:** FY 2024 and Q1 2024
- **Guidance:**
  - **SG&A Expenses:** Approximately 25% of total revenue
  - **EPS:** 38% in the first half, 62% in the second half; Family Dollar store closures accretive by $0.15
  - **Depreciation:** Approximately $1 billion
  - **Net Interest Expense:** $95 million for the year, $26 million for Q1
  - **Effective Tax Rate:** Approximately 24%
  - **Capital Expenditures:** $2.1 billion to $2.3 billion
  - **Share Repurchases:** No repurchases assumed, $1.35 billion capacity remaining
  - **Gross Margin:** 36% to 36.5% for Dollar Tree
  - **Family Dollar Closures:** 600 stores in the first half, additional closures at lease end
  - **Sales Loss from Store Closures:** Approximately $730 million annually
  - **Comp Outlook:** Strong year for Dollar Tree, challenges for Family Dollar  **[DLTR_3377913_11]** **[DLTR_3377913_1]** **[DLTR_3377913_16]** **[DLTR_3377913_14]** .

d94168506387429fe449728e29e6abde427bcb57b936c59ea6404ad093689f64

| Name                  | Position                                      | Start Date          | Short Bio                                                                                                                                                                                                 |
|-----------------------|-----------------------------------------------|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Richard W. Dreiling   | Chairman and Chief Executive Officer          | February 2023       | Richard W. Dreiling has served as the Chairman and CEO of Dollar Tree, Inc. since February 2023. He was previously Executive Chairman from March 2022 to February 2023 and held leadership roles at Dollar General  **[0001104659-24-057684_tm242970d2_def14a.htm:8]** **[0001104659-24-057684_tm242970d2_def14a.htm:88]** .                      |
| Robert Aflatooni      | Chief Information Officer                     | July 2022           | Robert Aflatooni has been the CIO of Dollar Tree since July 2022, with over 20 years of IT leadership experience, including roles at The Howard Hughes Corporation and Dollar General  **[0001104659-24-057684_tm242970d2_def14a.htm:88]** **[0001104659-23-054765_tm2311462d2_def14a.htm:44]** .                                                   |
| Michael Creedon, Jr.  | Chief Operating Officer                       | October 2022        | Michael Creedon, Jr. has been the COO of Dollar Tree since October 2022. He previously held executive roles at Advance Auto Parts, Inc.  **[0001104659-24-057684_tm242970d2_def14a.htm:88]** **[0001104659-23-054765_tm2311462d2_def14a.htm:45]** .                                                                                                 |
| Jeffrey Davis         | Chief Financial Officer                       | October 2022        | Jeffrey Davis has been the CFO of Dollar Tree since October 2022. He was previously CFO at Qurate Retail Group, Inc. and J.C. Penney Company, Inc. He will step down after the Annual Report filing in March 2025  **[0001104659-24-057684_tm242970d2_def14a.htm:88]** **[0001104659-23-054765_tm2311462d2_def14a.htm:45]** **[0000935703-24-000057_dltr-20241204.htm:2]** .                    |
| Lawrence Gatta, Jr.   | Chief Merchandising Officer—Family Dollar     | May 2022            | Lawrence Gatta, Jr. has been the Chief Merchandising Officer—Family Dollar since May 2022, with over 35 years of retail experience, including at Dollar General  **[0001104659-24-057684_tm242970d2_def14a.htm:88]** **[0001104659-23-054765_tm2311462d2_def14a.htm:45]** .                                                                        |
| Jennifer Hulett       | Chief People and Communications Officer       | January 2022        | Jennifer Hulett has served as the Chief People and Communications Officer at Dollar Tree since January 2022. She previously held HR leadership roles at Core-Mark International and Ericsson North America  **[0001104659-24-057684_tm242970d2_def14a.htm:88]** **[0001104659-23-054765_tm2311462d2_def14a.htm:45]** .                              |
| Michael Kindy         | Chief Supply Chain Officer                    | May 2023            | Michael Kindy has been the Chief Supply Chain Officer at Dollar Tree since May 2023. He previously held executive roles in supply chain at Dollar General Corporation  **[0001104659-24-057684_tm242970d2_def14a.htm:88]** .                                                                      |
| Jonathan Leiken       | Chief Legal Officer and Corporate Secretary   | August 2023         | Jonathan Leiken has been the Chief Legal Officer and Corporate Secretary at Dollar Tree since August 2023. He was previously EVP, Chief Legal Officer, and Secretary at Diebold Nixdorf, Inc.  **[0001104659-24-057684_tm242970d2_def14a.htm:88]** .                                              |
| Richard McNeely       | Chief Merchandising Officer for Dollar Tree   | May 2017            | Richard McNeely has been the Chief Merchandising Officer for Dollar Tree stores since May 2017. He has extensive experience in merchandising and marketing, including roles at Dollar General and Fred's, Inc.  **[0001104659-24-057684_tm242970d2_def14a.htm:88]** **[0001104659-23-054765_tm2311462d2_def14a.htm:45]** .                          |
| Michael C. Creedon Jr.| Interim Chief Executive Officer               | November 3, 2024    | Michael C. Creedon Jr. was appointed as the Interim CEO of Dollar Tree on November 3, 2024. He has been the COO since October 2022 and previously held leadership roles at Advance Auto Parts, Inc.  **[0000935703-24-000044_dltr-20241103.htm:1]** **[0000935703-24-000044_ex99111-4x24transitionanno.htm:0]** .                                      |
| Edward J. Kelly, III  | Chairman                                      | November 4, 2024    | Edward J. Kelly, III was elected as Chairman of Dollar Tree on November 4, 2024. He has extensive experience in business and finance, having served as Chairman of the Institutional Clients Group of Citigroup, Inc.  **[0000935703-24-000044_ex99111-4x24transitionanno.htm:0]** **[0001104659-23-054765_tm2311462d2_def14a.htm:19]** **[0001104659-23-054765_tm2311462d2_def14a.htm:29]** .                |

9ea333cf7d69c4209316ae8d29a0145736495953455c413cd422cc17d47cf3c4

| Program Details           | Program 1       |
|---------------------------|-----------------|
| Approval Date             | N/A             |
| End Date/Duration         | N/A             |
| Total additional amount   | **$2.5 billion**  **[0000935703-24-000059_dltr-20241102.htm:37]** **[0000935703-24-000059_dltr-20241102.htm:9]** **[0000935703-24-000059_dltr-20241102.htm:31]**  |
| Remaining authorization   | **$952.4 million**  **[0000935703-24-000059_dltr-20241102.htm:37]** **[0000935703-24-000059_dltr-20241102.htm:9]** **[0000935703-24-000059_dltr-20241102.htm:31]**  |
| Details                   | The program is part of a strategy to manage capital allocation effectively, aiming to return capital to shareholders and potentially improve earnings per share by reducing the number of shares outstanding.  **[0000935703-24-000011_dltr-20240203.htm:91]** **[0000935703-24-000011_dltr-20240203.htm:42]**  |

cf516241de68a5eec48d66c2017c6c071b573e702d4447ad262a1574cef6c3a5

- Consumable

- Variety

- Seasonal

- Home Products

- Apparel and Accessories

- Seasonal and Electronics

Other Revenue

Total Revenue

5791ea214a64faa286ad58713d64b048744201d3bba9aa6a9eaec5670052bf79

| Name       | Start Date | End Date | Reason for Change |
|------------|------------|----------|-------------------|
| KPMG LLP   | 1987  **[0000935703-24-000011_dltr-20240203.htm:69]**    | Present  | Current auditor   |

ba938fd2c6cd0639b6f0d58d72915abd1d2664b5d75ea744613db1e8a019e375

5292f63fb07b0686690d58fd9ae5fee39070e19c675098ca0efa67ead0b2161d

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $7,568.2 million (+3% YoY)  **[0000935703-24-000059_dltr-20241102.htm:1]** **[0000935703-23-000063_dltr-20231028.htm:2]**   
- Dollar Tree Segment Revenue: $4,338.0 million (**+8% YoY**)  **[0000935703-24-000059_dltr-20241102.htm:11]** **[0000935703-23-000063_dltr-20231028.htm:13]**   
- Family Dollar Segment Revenue: $3,223.7 million (-2% YoY)  **[0000935703-24-000059_dltr-20241102.htm:11]** **[0000935703-23-000063_dltr-20231028.htm:13]**   
- Selling, General & Administrative Expenses: $2,010.5 million (+7% YoY)  **[0000935703-24-000059_dltr-20241102.htm:1]** **[0000935703-23-000063_dltr-20231028.htm:2]**   
- Operating Income (EBIT): $333.4 million (**+10% YoY**)  **[0000935703-24-000059_dltr-20241102.htm:1]** **[0000935703-23-000063_dltr-20231028.htm:2]**   
- Net Income: $233.3 million (**+10% YoY**)  **[0000935703-24-000059_dltr-20241102.htm:1]** **[0000935703-23-000063_dltr-20231028.htm:2]**   
- Diluted EPS: $1.08 (**+11% YoY**)  **[0000935703-24-000059_dltr-20241102.htm:1]** **[0000935703-23-000063_dltr-20231028.htm:11]**   

85241832fd6c9b29227838d82096819ce62b1bb00d04fffb24f2d7b80b0aa6a3

231da80aa7a2507d4cf63da74180fc074127cca2502689b9192c96823bda4507

- **Unexpected one-time items, such as general liability claims adjustments, are consistently dragging down earnings at Dollar Tree**  **[DLTR_3400513_10]** . The company had to take a significant adjustment, impacting EPS by **$0.30**, which was not anticipated in their outlook  **[DLTR_3400513_9]** **[DLTR_3400513_1]** .
- **Pullback in higher-income customers at Dollar Tree is impacting sales**, with consumers tightening their belts and contracting spend  **[DLTR_3400513_18]** **[DLTR_3400513_16]** **[DLTR_3400513_2]** . This resulted in lower-than-expected comp store performance and a revision of the full-year outlook  **[DLTR_3400513_1]** **[DLTR_3400513_2]** .
- **Dollar Tree continues to face additional issues and expenses quarter after quarter**, leading to concerns about the need for a harder reset of the business  **[DLTR_3400513_18]** . This includes higher-than-expected upfront costs from the acquisition of 99 Cents Only stores  **[DLTR_3400513_18]** **[DLTR_3400513_11]** .

14cb7a9e2d5cf68597f57e677912b94f1b0903c88688c240ba175b1f29f8f86e

1. **$10 EPS Target Update**  
   **Q:** Is the $10 EPS target still achievable?  
   **A:** Management reaffirmed belief in the **$10 EPS target**, but noted that the macro environment, including high shrink numbers and mix shifts, has made it difficult to pinpoint the exact timing. They are now focusing on achieving **$7 EPS in 2024** as a step toward the $10 goal.  **[DLTR_3377913_13]** 

2. **Margin Guidance by Banner**  
   **Q:** Can you detail the margin outlook for each banner?  
   **A:** Dollar Tree expects a **gross margin of 36% to 36.5%**, influenced by the multi-price rollout, which pressures margin rate but drives unit growth, and a **$0.80 to $0.90 freight benefit**, with 60% realized in the first half. Family Dollar's margin is impacted by shrink and mix but is offset by private label growth and opportunities in OTC and HBA categories.  **[DLTR_3377913_16]** 

3. **Store Closures and Sales Recapture**  
   **Q:** Will closing 600 stores impact revenue, and can sales be recaptured?  
   **A:** The company is optimistic about recapturing sales, as many closing stores are near existing locations, offering opportunities to regain cannibalized sales. The closures are expected to be **cash neutral to accretive**, with potential sales transferring to nearby stores.  **[DLTR_3377913_18]** **[DLTR_3377913_20]** 

4. **Comp Outlook and Traffic Progression**  
   **Q:** What is the comp outlook for 2024?  
   **A:** Management anticipates a strong year, especially for Dollar Tree, with positive comps driven by initiatives and a robust Q4. Family Dollar faces challenges due to mix shifts and pressure on low-income consumers from reduced SNAP benefits but expects improvement toward year's end.  **[DLTR_3377913_14]** 

5. **Multi-Price Point Penetration Goal**  
   **Q:** When will multi-price point penetration reach 10%?  
   **A:** Multi-price point penetration was **8.8% in Q4**. Management is aiming for the **10%** milestone and plans to stagger the rollout to maximize its impact over time, viewing it as a "gift that keeps on giving."  **[DLTR_3377913_17]** 

6. **Accelerated Dollar Tree Expansion**  
   **Q:** Will you accelerate Dollar Tree unit growth?  
   **A:** Yes, the company is shifting focus to opening more Dollar Trees than before, driven by success with coolers and multi-price points, enhancing the store model's viability. Optimizing the portfolio allows better focus on profitable locations.  **[DLTR_3377913_15]** 

7. **SNAP Benefits Reduction Impact**  
   **Q:** How significant is the SNAP headwind for Family Dollar?  
   **A:** The reduction in SNAP benefits poses an estimated **5% headwind** for Family Dollar, based on customer penetration and its year-over-year impact.  **[DLTR_3377913_21]** 

8. **Supply Chain Improvements**  
   **Q:** How are supply chain changes affecting inventory?  
   **A:** Unload times have been reduced to **approximately 1 hour**, improving store standards and in-stock positions. Better coordination with suppliers has enhanced inventory levels at distribution centers and stores, leading to improved sell-through.  **[DLTR_3377913_19]** 

9. **Leveraging Lower Input Costs**  
   **Q:** How are lower input costs adding value at the $1.25 price point?  
   **A:** Fixed price points enable Dollar Tree to re-engineer products when input costs decrease, delivering greater value to customers while maintaining the **$1.25 price point**.  **[DLTR_3377913_16]** 

10. **Average Ticket Trends**  
    **Q:** Why is the average ticket down despite higher price points?  
    **A:** Average ticket is lower due to increased shopping frequency with smaller baskets. However, baskets including multi-price items can be **2x the average**, indicating strong adoption of higher-priced items.  **[DLTR_3377913_20]** 

11. **Family Dollar Consumables Performance**  
    **Q:** How is Family Dollar performing in consumables amid competition?  
    **A:** The consumables mix is the best it's been, with a focus on private brands offering national brand equivalents. Pricing remains stable, and their competitive position is strong.  **[DLTR_3377913_23]** 

12. **Handling Inventory from Closures**  
    **Q:** What happens to inventory from closing stores?  
    **A:** The company will offer discounts to sell through inventory, with expected impacts already included in guidance. Inventory impairments have been accounted for to reflect the sales.   

56c078d45267e3e58199669c715b896daf7fe71aa65aa89cfed31033ad0e10e7

1. **Family Dollar Strategic Review**  
   **Q:** If you can't sell Family Dollar, what's Plan B?  
   **A:** Management says it's too soon to discuss alternatives but emphasizes they haven't lost faith in Family Dollar's progress. Approximately **50%** of corporate overhead is allocated to Family Dollar, and operational functions like supply chain and merchandising are mostly separate.  **[DLTR_3391694_9]** **[DLTR_3391694_12]** 

2. **Multi-Price Strategy Impact**  
   **Q:** How is the multi-price rollout impacting performance?  
   **A:** Multi-price stores are outperforming others, with traffic increasing by about **3%** and ticket size up **55 basis points**. Baskets with multi-price items are **2x larger**, and the strategy is attracting higher-income consumers. Challenges include keeping products on shelves and training staff for new disciplines.  **[DLTR_3391694_8]** **[DLTR_3391694_13]** **[DLTR_3391694_14]** **[DLTR_3391694_15]** 

3. **Confidence in Comp Guidance**  
   **Q:** What underpins confidence in mid-single-digit comp guidance?  
   **A:** Confidence stems from the multi-price point strategy driving trade-down customers and larger baskets. Converted stores are performing well, and they plan to convert another **2,000** stores this year. Despite softer comps in the back half, they remain bullish on growth.  **[DLTR_3391694_8]** **[DLTR_3391694_10]** 

4. **99 Cents Only Acquisition**  
   **Q:** Elaborate on the acceleration strategy and acquisitions.  
   **A:** The acquisition of **99 Cents Only Stores** in California reflects a commitment to the Dollar Tree franchise. It's expected to generate above-average returns and offers opportunities for higher growth, with no ceiling on annual unit expansion indicated.  **[DLTR_3391694_10]** 

5. **Shrink Stabilization Efforts**  
   **Q:** How is shrink impacting margins and mitigation efforts?  
   **A:** Shrink remains a problem but is stabilizing and not worsening like last year. Investments are yielding positive trends, with an expected **$0.30 to $0.35** EPS headwind from shrink and mix in the first half, mainly due to mix.  **[DLTR_3391694_16]** 

6. **SG&A Deleveraging from Rollouts**  
   **Q:** How did multi-price resets affect SG&A deleverage?  
   **A:** SG&A deleverage was mainly due to temporary labor costs from third-party specialists conducting in-line conversions, impacting approximately **$0.23** of EPS for the year. Initial headwinds are expected to moderate over time as processes improve.  **[DLTR_3391694_15]** 

7. **Supply Chain Investment Benefits**  
   **Q:** What benefits are seen from supply chain investments?  
   **A:** Early benefits include improved delivery and unload times, reduced damages, and higher associate satisfaction. In-store stock levels are improving along with distribution center service, as seen in facilities like Matthews, NC, and Chesapeake.  **[DLTR_3391694_17]** 

8. **Second-Half EBIT Margin Improvement**  
   **Q:** What drives expected EBIT margin improvement in H2?  
   **A:** Drivers include accelerated multi-pricing rollout, neutralizing shrink and mix impacts, potential SNAP tailwinds from the October COLA adjustment, and lapsing last year's one-time costs like an OTC recall (**$0.05** EPS) and liability accruals (**$0.17** EPS). They also anticipate a **$0.15** EPS improvement from portfolio optimization.  **[DLTR_3391694_18]** 

9. **Credit Rating Considerations**  
   **Q:** How will Family Dollar plans affect your credit rating?  
   **A:** Maintaining an investment-grade rating is important. While it's early to detail outcomes, they believe the company's cash flows and capital allocation support staying investment grade amid strategic considerations for Family Dollar.  **[DLTR_3391694_19]** 

10. **Consumer Behavior with Multi-Price**  
    **Q:** Any surprises in consumer behavior with multi-price?  
    **A:** The main challenge is keeping products stocked due to strong consumer response. Multi-price is boosting consumable sales and attracting higher-income customers. The mix of discretionary and consumables is balancing as desired.  **[DLTR_3391694_13]** **[DLTR_3391694_8]** 

11. **Promotional Landscape Insights**  
    **Q:** What's observed in the current promotional landscape?  
    **A:** No irrational promotions are noted. Customers are buying more promotional items, especially in categories like carbonated soft drinks, but overall, the promotional environment remains stable and rational.  **[DLTR_3391694_14]** 

12. **Cooler Resets Progress**  
    **Q:** How are cooler resets progressing and impacting sales?  
    **A:** Cooler resets are driving incremental sales across both banners. Family Dollar increased cooler doors to approximately **30**, aligning with consumer shifts toward refrigerated and frozen products. Dollar Tree expanded multi-price frozen foods to **5,700** stores, offering value items like **$4-$5** pizzas that feed a family of four.  **[DLTR_3391694_11]** 

b4faf46eec3963ef765828499cd4edee0b33595bd471e14bada9311cad0a5fba

1. **Multi-Price Rollout Impact**  
   **Q:** How is the multi-price rollout affecting sales and margins?  
   **A:** The multi-price rollout at Dollar Tree is yielding positive results, with converted stores showing a **4.6% comp lift**, primarily driven by increased traffic.  **[DLTR_3400513_15]**  Customers are responding well to the multi-price offerings, especially in consumables, and the company expects discretionary products to boost sales further in the second half.  **[DLTR_3400513_11]** 

2. **Consumer Belt-Tightening Effects**  
   **Q:** How is the challenging macro environment impacting sales trends?  
   **A:** Due to macroeconomic pressures, customers across income levels are tightening their belts, shifting from discretionary to consumable purchases.  **[DLTR_3400513_13]**  This has led to softening same-store sales in the second quarter, but the company anticipates improvement in the third and fourth quarters with upcoming holidays driving traffic.  **[DLTR_3400513_13]** 

3. **Family Dollar Strategic Review**  
   **Q:** Are there any updates on the strategic review of Family Dollar?  
   **A:** The company continues to explore strategic options for Family Dollar, including those involving outside parties, and is pleased with the progress of the review.  **[DLTR_3400513_16]**  They remain focused on maximizing shareholder value while operating both businesses.  **[DLTR_3400513_16]** 

4. **Operating Margins Outlook**  
   **Q:** What is the outlook for Dollar Tree's operating margins?  
   **A:** The company expects the Dollar Tree segment to achieve a gross margin of approximately **36%** in 2024.  **[DLTR_3400513_10]**  Consolidated SG&A expenses are anticipated to be around **26%**, reflecting additional costs from multi-price conversions and investments in IT and supply chain.  **[DLTR_3400513_10]** 

5. **SG&A Expenses and Profitability**  
   **Q:** How are SG&A costs affecting profitability with the multi-price rollout?  
   **A:** SG&A expenses have increased due to higher third-party labor costs for multi-price store conversions and increased depreciation from investments.  **[DLTR_3400513_15]**  These costs are expected to continue this year and next, impacting overall EPS by over **$0.20**.  **[DLTR_3400513_15]** 

6. **Speed of Multi-Price Rollout**  
   **Q:** Can the multi-price rollout be accelerated?  
   **A:** The rollout pace is limited by internal bandwidth and distribution capabilities.  **[DLTR_3400513_12]**  The company ensures each store is ready before conversion to maximize performance, resulting in a slight delay of about **200 stores** this year.  **[DLTR_3400513_12]** 

7. **Customer Response to Multi-Price Strategy**  
   **Q:** Are customers pushing back on the multi-price strategy?  
   **A:** Customers are responding positively, with converted stores experiencing increased traffic and sales.  **[DLTR_3400513_11]**  Surveys indicate that customers appreciate the new products and value provided by the multi-price offerings.  **[DLTR_3400513_11]** 

8. **Core Dollar Tree Performance**  
   **Q:** How are the non-converted Dollar Tree stores performing?  
   **A:** Core Dollar Tree stores have flattish comps but show strong multi-year performance.  **[DLTR_3400513_13]**  The company expects the multi-price rollout to enhance overall performance by attracting more customers and increasing wallet share.  **[DLTR_3400513_13]** 

9. **Potential Harder Reset at Dollar Tree**  
   **Q:** Would it make sense to do a harder reset at Dollar Tree to address issues?  
   **A:** Management believes they are positioned appropriately and are investing in store standards and the multi-price rollout for long-term success.  **[DLTR_3400513_18]**  They see customers needing their value proposition more than ever and are committed to meeting those needs.  **[DLTR_3400513_18]** 

10. **Incremental Investments Amid Consumer Pressure**  
    **Q:** Is the consumer backdrop changing your view on needed investments?  
    **A:** The company remains committed to investments in store standards and transformation initiatives, aiming to deliver value over the long term despite current macroeconomic pressures.  **[DLTR_3400513_17]** 

ddb57ff00a8fe893ca4a2eb5e5358d3e044e464c03f1043acfcf99285fa52991

1. **Earnings Outlook and One-time Items**  
   **Q:** Can we add one-time items impact to next year's earnings?  
   **A:** Management stated that one-time items from this year would be added back to the base level for fiscal year 2025. However, regarding the impact of the Family Dollar strategic review, they are not providing guidance at this time due to various factors that need to be considered.  **[DLTR_3410732_9]** 

2. **Tariffs Impact on Earnings**  
   **Q:** What’s the downside to earnings next year from tariffs?  
   **A:** It's unclear what tariff policies will materialize, but management has managed similar situations before. They plan to mitigate impacts by changing product specifications, negotiating with suppliers, eliminating certain products, sourcing from alternative countries (China plus one strategy), and leveraging their multi-price strategy to stay competitive.  **[DLTR_3410732_9]** 

3. **Margins and SG&A Leverage**  
   **Q:** When will temporary labor costs normalize, and what's SG&A leverage opportunity?  
   **A:** Temporary labor costs associated with the multi-price rollout are expected to decline over the next **18 to 24 months**. Depreciation from recent investments is anticipated to moderate as asset investments peak. Management aims to be disciplined in spending and increase productivity, so as higher-margin sales grow, more will flow to the bottom line.  **[DLTR_3410732_18]** 

4. **Multi-Price Rollout Performance**  
   **Q:** Is the multi-price comp lift decelerating in Q3 conversions?  
   **A:** Customer response to multi-price remains highly positive, with baskets containing **five more units** and nearly double the value of traditional baskets. The comp lift varies based on store conversions; Q1 stores converting from $1.25 (1.0) to multi-price (3.0) show the strongest performance. In Q3, **75%** of conversions were from stores already at Dollar Tree Plus (2.0) to multi-price, resulting in a lower incremental lift. Management continues refining assortments based on customer feedback.  **[DLTR_3410732_13]** 

5. **Accelerating Multi-Price Rollout**  
   **Q:** How can you accelerate the multi-price rollout without hurting execution?  
   **A:** Management believes doing it right is better than doing it fast. They've implemented milestones requiring district managers to sign off **four weeks** before conversion and regional directors **two weeks** prior to ensure readiness. While this may slow the process, it ensures quality execution. They're also refreshing existing Dollar Tree Plus stores with successful products. Resource allocation, including converting acquired stores, impacts rollout pace, but they focus on prioritizing effectively.  **[DLTR_3410732_14]** 

6. **Customer Demand Trends**  
   **Q:** What are the demand trends across income cohorts?  
   **A:** The low-end customer is under pressure, focusing on consumables and increasing at-home eating, which boosts consumables comps. Middle and higher-income customers also feel pressure, cutting back on big purchases, dining out, and reducing the size of gatherings. Dollar Tree and Family Dollar are gaining share as customers prioritize needs and shop closer to when they require items.  **[DLTR_3410732_11]** 

7. **Softness in November and Q4 Outlook**  
   **Q:** Can you elaborate on November softness and Q4 expectations?  
   **A:** Customers are focusing on immediate needs and buying closer to when they need items, evidenced by strong growth in consumables and late surges in seasonal products like Halloween and Thanksgiving items. The company anticipates this pattern to continue into Q4. Despite **five fewer days** in the quarter, they expect low single-digit comps in both Family Dollar and Dollar Tree, balancing calendar shifts with customer buying behaviors.  **[DLTR_3410732_10]** 

8. **Sustaining Family Dollar Momentum**  
   **Q:** Can you sustain momentum in traffic and discretionary sales at Family Dollar?  
   **A:** Management is confident due to actions taken to enhance discretionary offerings, particularly in consumable discretionary items bought regularly. Store resets and targeted merchandising are having lasting impacts. Over **1,500 renovations** and new formats like the **2.5** and **XSB** stores are delivering fantastic comps and resonating well with customers, supporting sustained momentum.  **[DLTR_3410732_12]** 

9. **General Liability Claims Outlook**  
   **Q:** Will general liability claims impact FY '25, and how will they progress?  
   **A:** Management believes adjustments made this year address the current portfolio and progression of claims. Future impact depends on the number and severity of claims. They are enhancing safety and security measures and training associates to mitigate challenges. While it's premature to discuss 2025 specifics, current reserves adequately reflect anticipated liabilities.  **[DLTR_3410732_17]** 

10. **Leadership Changes and Strategy**  
    **Q:** Any changes in investments or strategy with new leadership?  
    **A:** The focus remains on executing the Family Dollar strategic review and preparing Dollar Tree for its next chapter. Management will continue to test, learn, and enhance the business based on customer needs. Recent leadership changes position the company well, with experienced leaders like **Jocy Konrad** and **Jason Nordin** heading Dollar Tree and Family Dollar stores, respectively, to drive future growth.  **[DLTR_3410732_16]** 

f9a1ee59c2c164eb4cb0bbf122d479a551b41faa0841b6b08ef1920b2b11707f

- **Persistent macroeconomic challenges in the Family Dollar segment** are impacting performance, with lower-income consumers under pressure due to reduced SNAP benefits and inflation, leading to declining comps and weak discretionary demand. Management noted that **Family Dollar's quarter 4 comp declined 1.2%**, and they expect reduced SNAP benefits to remain a headwind through the first half of fiscal 2024.  **[DLTR_3377913_13]**
- **Shrink continues to accelerate**, negatively affecting margins, particularly in the Family Dollar segment. Management stated that they are "dealing with high, high shrink numbers" and that shrink has **not moderated but is continuing to accelerate**, presenting ongoing challenges to profitability.  **[DLTR_3377913_13]**
- The company's previous **$10 EPS target is now difficult to pinpoint** due to macroeconomic headwinds, high shrink, and mix shifts. Management is now focusing on achieving **$7 EPS in 2024**, acknowledging it's "a little difficult for us to pinpoint that $10 target going forward."  **[DLTR_3377913_13]**

bd43028a534bd6b600cbc7a7019291f8e29ae8fb432f7fe657edb9b5619f65a2

- The company's **multi-price point strategy** is driving significant growth, with **multi-price stores outcomping those without multi-price** and **basket sizes doubling** in these stores, indicating strong customer adoption and increased spending.  **[DLTR_3391694_8]**
- **Traffic increases of approximately 3%** and higher average tickets in multi-price converted stores demonstrate the effectiveness of the strategy in attracting customers and boosting sales.  **[DLTR_3391694_14]**
- The acquisition of **$0.99 Only Stores** is expected to generate **returns above the company's average**, enhancing Dollar Tree's growth prospects and expanding its footprint in key markets.  **[DLTR_3391694_10]**

8954daf900414053e5d321a04c04af032857bc5fd584e8aa559f3bf835a2a730

- **SG&A Deleveraging Due to 3.0 Rollout Costs**: Dollar Tree is experiencing SG&A deleverage caused by higher depreciation and temporary labor costs associated with the rollout of the multi-price 3.0 format. These costs are expected to remain a headwind over the next 18 to 24 months, impacting margins and profitability.  **[DLTR_3410732_18]** **[DLTR_3410732_14]**
- **Pressure from Shift in Consumer Spending**: The company's core low-income customers are under financial pressure, focusing on consumables over discretionary items. This shift is leading to lower-than-needed sales growth, with Dollar Tree needing low single-digit comps to leverage the business but achieving just shy of 2% this quarter, resulting in margin pressure.  **[DLTR_3410732_18]** **[DLTR_3410732_11]**
- **Uncertainty from Strategic Review and Tariffs**: The lack of guidance on the potential impact of the strategic review of Family Dollar and possible new tariffs creates uncertainty regarding future earnings. Management has not provided clarity on how these factors may affect the company's financial outlook.  **[DLTR_3410732_9]**

644a394b7fcaa88f6f3c1841011cf1a107d6628871c27ab6828bd504d7a4a55f

- **Dollar Tree's multi-price point strategy is performing significantly better than expected, with customer acceptance "off the charts" and difficulties keeping up with merchandise demand.**  **[DLTR_3377913_13]**
- **The fastest-growing demographic at Dollar Tree is customers earning over $125,000 annually, indicating attraction from higher-income customers and driving sales growth across all markets.**  **[DLTR_3377913_15]**
- **Supply chain improvements, including reduced unload times to approximately 1 hour and better inventory management, are expected to enhance store efficiency and increase transactions.**  **[DLTR_3377913_18]**

da48028a7b6c5278322b7b4e3936b6db2d5883eab8b5e112f162e3e0aaf6024f

- **Dollar Tree has added 2.8 million new customers**, indicating strong customer growth despite macro pressures  **[DLTR_3400513_16]** **[DLTR_3400513_3]** .
- The **multi-price strategy** is well received by customers, leading to higher traffic and expected to drive **higher gross profit per transaction**, supporting long-term margin expansion  **[DLTR_3400513_16]** **[DLTR_3400513_10]** .
- The company is making strategic investments in **store renovations, supply chain modernization, and private brands**, which are expected to enhance efficiency and drive future growth  **[DLTR_3400513_18]** **[DLTR_3400513_3]** .

b8297452c11384c27a08f4cf6a73958da5809d0888ffe1ccd37c33d85f3891d8

- **Dollar Tree is facing increased expenses due to the loss of its Marietta distribution center, with an estimated EPS impact of approximately $0.20 to $0.30 for the full year.**  **[DLTR_3391694_6]**
- **The company continues to experience ongoing issues with inventory shrink, which remains a problem affecting gross margins.**  **[DLTR_3391694_16]**
- **Closure of underperforming Family Dollar stores (approximately 596 stores) indicates challenges within the Family Dollar segment, and the strategic review of Family Dollar introduces uncertainty about its future performance and potential costs associated with separation.**  **[DLTR_3391694_5]** **[DLTR_3391694_1]** **[DLTR_3391694_9]**

871fb8d4a96ebf16e3aebaa2c604ac5890297db037189f23cd19ddeec1734451

- **Family Dollar's renovated stores are delivering strong sales performance**, with over **1,500 renovations completed**, and the new formats are **resonating incredibly well with customers**, fueling sales growth.  **[DLTR_3410732_12]**
- **Dollar Tree is opening new stores at a faster pace than in the past**, which is expected to bring significant benefits in sales and profitability over time.  **[DLTR_3410732_18]**
- **Multi-price 3.0 format stores are performing well, meeting or exceeding expectations**, with **stronger-than-anticipated margins**, driving both consumable and discretionary sales growth.  **[DLTR_3410732_11]**

f8f3c402bd2ac65f3302bc18b29140b2e9b9a1d74c27b98da484ed37c3ad291d

Dollar Tree Inc (DLTR)

Financials