• Same-Store Net Sales: Dollar Tree +1.8%; Family Dollar +1.9%; Enterprise +1.8%
• Diluted Earnings per Share (EPS) of $1.08 and Adjusted Diluted EPS of $1.12
• Fourth Quarter Fiscal 2024 Net Sales Outlook Range of $8.1 Billion to $8.3 Billion
• Fourth Quarter Fiscal 2024 Adjusted Diluted EPS Outlook Range of $2.10 to $2.30
• Full-Year Fiscal 2024 Net Sales Outlook Range of $30.7 Billion to $30.9 Billion
• Full-Year Fiscal 2024 Adjusted Diluted EPS Outlook Range of $5.31 to $5.51
• Family Dollar Review of Strategic Alternatives Remains on Track
• Announces Chief Financial Officer Transition

Dollar Tree, Inc. (NASDAQ: DLTR) today reported financial results for its third quarter ended November 2, 2024.

“Our Dollar Tree and Family Dollar merchandising efforts produced tangible results, and our third quarter sales came in at the high-end of our expected range,” said Mike Creedon, Interim Chief Executive Officer. “As an organization, our top priorities remain accelerating the growth of the Dollar Tree segment, completing the Family Dollar strategic review process, and unlocking value for Dollar Tree shareholders.”

Dollar Tree, Inc. and Jeff Davis have agreed that he will step down from his role as the Company’s Chief Financial Officer. The company has launched an external search and to ensure a smooth transition, Mr. Davis has agreed to remain with the company through the filing of its fiscal 2024 Form 10-K.

“We thank Jeff for his service and appreciate the contributions he made to the business during his time with Dollar Tree and Family Dollar. We remain committed to our business strategy and are focused on driving lasting value for our customers and shareholders,” Creedon added.

Additional Business Highlights

• Opened 249 new Dollar Tree and 6 new Family Dollar stores
• Approximately 2,300 Dollar Tree stores have been converted to in-line multi-price format
• Generated $785.6 million of net cash provided by operating activities
• Generated $359.2 million of free cash flow

Third Quarter Results

Unless otherwise noted, all comparisons are to the prior year’s third quarter, ended October 28, 2023.

Consolidated net sales increased 3.5% to $7.56 billion. Enterprise same-store net sales increased 1.8%, driven by a 1.6% increase in traffic and a 0.2% increase in average ticket. Dollar Tree same-store net sales increased 1.8%, driven by a 1.5% increase in traffic and a 0.3% increase in average ticket. Family Dollar’s same-store net sales increased 1.9%, driven by a 1.8% increase in traffic and a flat average ticket. Same-store net sales results for the Family Dollar segment do not include any stores that were closed during the third quarter as part of our previously announced portfolio optimization.

Gross profit increased 7.6% to $2.34 billion and gross margin expanded 120 basis points to 30.9%. Gross margin expansion was driven primarily by lower freight costs and improved shrink results in relation to accruals, partially offset by increased distribution costs.

Selling, general and administrative expenses were 26.6% of total revenue, compared to 25.7%. The increase was driven primarily by higher depreciation expense from store investments, higher professional fees related to the review of Family Dollar strategic alternatives, temporary labor in the Dollar Tree segment to support our multi-price rollout, higher utilities costs, and loss of leverage from the low single-digit comparable store net sales increase.

On a non-GAAP basis, which excludes costs associated with store closings and costs associated with the strategic review, selling, general and administrative expenses were 26.5% of total revenue, compared to 25.7%.

Operating income increased 10.5% to $333.4 million and operating margin expanded 30 basis points to 4.4%. Adjusted operating income increased 13.8% to $343.2 million and adjusted operating margin expanded 40 basis points to 4.5%.

The Company’s effective tax rate was 23.7% compared to 21.8%. Adjusted effective tax rate was 23.8% compared to 21.8%.

Net income was $233.3 million and diluted earnings per share was $1.08. Adjusted net income was $240.6 million and adjusted diluted EPS was $1.12.

Year-to-Date Results

Unless otherwise noted, all comparisons are between the 39 weeks ended November 2, 2024, and the 39 weeks ended October 28, 2023.

Consolidated net sales increased 2.8% to $22.6 billion. Enterprise same-store sales increased 1.2%. Dollar Tree same-store sales increased 1.6%, driven by a 1.9% increase in traffic, partially offset by a 0.3% decline in average ticket. Family Dollar’s same-store sales increased 0.6%, driven by a 1.2% increase in traffic, partially offset by a 0.5% decline in average ticket.

Gross profit increased 5.5% to $6.9 billion and gross margin expanded 80 basis points to 30.6%.

Selling, general and administrative expenses were 26.4% of total revenue, compared to 25.2%. On a non-GAAP basis, selling, general and administrative expenses were 26.2% of total revenue, compared to 25.1%.

Operating income decreased 5.2% to $957.1 million and operating income margin decreased 40 basis points to 4.2%. Adjusted operating income decreased 4.1% to $996.9 million and adjusted operating income margin decreased 30 basis points to 4.4%.

The Company’s effective tax rate was 24.0% compared to 23.4%. Adjusted effective tax rate was 24.1% compared to 23.1%.

Net income was $665.8 million and diluted EPS was $3.08. Adjusted net income was $695.5 million and adjusted diluted EPS was $3.22.

The Company repurchased 3.28 million shares for $403.6 million, including applicable excise tax.

Strategic Alternatives Review Update

The Company continues to reiterate its commitment to completing its formal review of strategic alternatives for the Family Dollar business segment, which could include among others, a potential sale, spin-off, or other disposition of the business. The process is moving forward as planned. There is no set deadline or definitive timeline for the completion of the strategic alternatives review process, and there can be no assurance that this process will result in any transaction or particular outcome.

Portfolio Optimization Review

During the fourth quarter of fiscal 2023, we announced that we had initiated a comprehensive store portfolio optimization review which involved identifying stores for closure, relocation, or re-bannering based on an evaluation of current market conditions and individual store performance, among other factors. As a result of the portfolio optimization review, we identified approximately 970 underperforming Family Dollar stores, including approximately 600 stores to be closed in the first half of fiscal 2024, and approximately 370 stores to be closed at the end of each store's current lease term. As of November 2, 2024, we have closed approximately 670 stores identified under the portfolio optimization review and expect to close an additional 25 during the remainder of fiscal 2024.

Fiscal 2024 Outlook

The Company is updating its full-year fiscal 2024 consolidated net sales outlook range to $30.7 billion to $30.9 billion. The Company still expects to deliver comparable store net sales growth in the low-single-digits for the enterprise and both the Dollar Tree and Family Dollar segments.

Adjusted diluted EPS is expected to range from $5.31 to $5.51.

Fourth Quarter 2024 Outlook

The Company expects consolidated net sales for the fourth quarter will range from $8.1 billion to $8.3 billion, based on comparable store net sales growth in the low-single-digits for the enterprise and both the Dollar Tree and Family Dollar segments.

Adjusted diluted EPS for the fourth quarter 2024 is estimated to be in the range of $2.10 to $2.30.

While share repurchases are not included in the outlook, the Company has approximately $952 million remaining under its $2.5 billion share repurchase authorization as of November 2, 2024.

Conference Call Information

On Wednesday, December 4, 2024, the Company will host a conference call to discuss its earnings results at 8:00 a.m. Eastern Time. The telephone number for the call is (877) 407-3943 or (201) 689-8855. A recorded version of the call will be available for seven days after the call and may be accessed by dialing (877) 660-6853 or (201) 612-7415. The access code is 13750113. A webcast of the call is also accessible through the Investor Relations portion of the Company’s website.

Supplemental financial information for the third quarter is available on the Investor Relations portion of the Company’s website, at https://corporate.dollartree.com/investors.

Dollar Tree, a Fortune 200 Company, operated 16,590 stores across 48 states and five Canadian provinces as of November 2, 2024. Stores operate under the brands of Dollar Tree, Family Dollar, and Dollar Tree Canada. To learn more about the Company, visit www.DollarTree.com.

Use of Non-GAAP Financial Measures

The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). From time-to-time, the Company supplements the reporting of its financial information determined under GAAP with certain non-GAAP financial information. The non-GAAP financial measures we have disclosed include adjusted selling, general and administrative expenses; adjusted selling, general and administrative expense rate; adjusted operating income (loss); adjusted operating income (loss) margin; adjusted net income; adjusted diluted earnings per share; adjusted effective tax rate; and free cash flow.

Reconciliations of the non-GAAP financial measures to the corresponding amounts prepared in accordance with GAAP appears in the tables under the heading “Reconciliation of Non-GAAP Financial Measures” below. These tables provide additional information regarding the adjusted measures.

A WARNING ABOUT FORWARD-LOOKING STATEMENTS: Our press release contains "forward-looking statements" as that term is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they address future events, developments or results and do not relate strictly to historical facts. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements include, without limitation, statements preceded by, followed by or including words such as: “believe”, “anticipate”, “expect”, “intend”, “plan”, “view”, “target” or “estimate”, “may”, “will”, “should”, “predict”, “possible”, “potential”, “continue”, “strategy”, and similar expressions. For example, our forward-looking statements include statements relating to our business and financial outlook for fiscal 2024, including without limitation our expectations regarding net sales, comparable store sales and adjusted diluted earnings per share for the fourth fiscal quarter and full fiscal year 2024, and various factors that are expected to impact our quarterly and annual results of operations for fiscal 2024; our plans and expectations regarding our leadership team and our business, including the impact of various initiatives, investments, and reviews on the company’s performance and prospects for long-term growth; our plans to close, relocate or re-banner stores as a result of our store portfolio optimization review; the impacts of tornado damage to our Dollar Tree distribution center in Marietta, Oklahoma, including expectations regarding inventory and property damage, related losses, the availability of insurance coverage and expected insurance recoveries, changes within our supply chain network and our customer shopping experience; and our other plans, objectives, expectations (financial and otherwise) and intentions, including our review of strategic alternatives at our Family Dollar segment. These statements are subject to risks and uncertainties. For a discussion of the risks, uncertainties and assumptions that could affect our future events, developments or results, you should carefully review the "Risk Factors," "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections in our Annual Report on Form 10-K filed March 20, 2024, our Form 10-Q for the most recently ended fiscal quarter and other filings we make from time to time with the Securities and Exchange Commission. We are not obligated to release publicly any revisions to any forward-looking statements contained in this press release to reflect events or circumstances occurring after the date of this report and you should not expect us to do so.

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