Dollar Tree, Inc. Reports Results for the First Quarter Fiscal 2023
-
Same-Store Sales: Dollar Tree +
3.4% ; FamilyDollar +6 .6% ; Enterprise +4.8% -
Comparable Transaction Count: Dollar Tree +
5.5% ; FamilyDollar +4 .3% -
GAAP Diluted Earnings per Share (EPS)
$1.35 -
Adjusted EPS of
$1.47 $30 Million $0.12 -
Tightens Fiscal 2023 Sales Outlook Range to
$30.0 Billion $30.5 Billion -
Revises Fiscal 2023 EPS Outlook:
$5.73 $6.13 $0.12 -
Strong Free Cash Flow Generation of
$402 million 41% from last year)
“Our initiatives to drive customer traffic and increase store productivity are having the desired impact. The Dollar Tree segment delivered a
“While we are seeing early results from our initiatives, we are not immune to the external pressures affecting all of retail, notably, the margin impact of elevated shrink and the product mix shift to consumables.”
“While we are maintaining our full-year 2023 sales outlook, we are adjusting our EPS outlook as we expect the elevated shrink and unfavorable sales mix to persist through the balance of the year. We still expect earnings to be more back-end loaded this year as the benefits of lower ocean freight rates flow through. We are eager to share more details on the current operating environment and our longer-term strategic growth plans at our upcoming investor conference on June 21st.”
Other Business Highlights
First Quarter Fiscal 2023
- Opened 107 new stores, relocated 33 stores, and closed 29 stores.
- Expanded multi-price Plus offering to an additional 408 Dollar Tree stores.
- Completed 252 Family Dollar store renovation projects.
First Quarter 2023 Key Operating Results
(Compared to same period fiscal 2022)
|
Fiscal Q1 2023 |
|
$ |
% Change |
|
Consolidated Net Sales |
|
|
Same-Store Sales Growth: |
|
|
Dollar Tree Segment |
|
|
Family Dollar Segment |
|
|
Enterprise |
|
|
Operating Income |
|
( |
Diluted EPS |
|
( |
Adjusted Operating Income (1) |
|
( |
Adjusted Diluted EPS (1) |
|
( |
(1) |
Adjustment is due to a |
First Quarter Results
Unless noted, all comparisons are to the prior year’s first quarter, ended April 30, 2022.
Consolidated net sales increased
Gross profit decreased
Selling, general and administrative expenses were
Operating income was
The Company’s effective tax rate was
Net income was
The Company repurchased 1,025,000 shares for
Updated Fiscal 2023 Outlook
“We are rapidly executing on a multi-faceted plan to fundamentally transform and improve the operating performance of Dollar Tree and Family Dollar for the long-term. I am encouraged by our early progress and traction on initiatives to improve our shoppers’ experience and drive store productivity. We are very confident in our plan and feel we are in control of our Company’s destiny,” Dreiling added.
“We believe both Dollar Tree and Family Dollar have a clear path to accelerated sales growth and margin expansion over the next three to five years. Our distinctive and proven initiatives are being led by a world-class retail management team and are being executed by more than 200,000 associates that are eager to succeed. At our investor conference in June, you will hear more details about our Company’s exciting growth plans and the transformational changes we are making.”
Fiscal 2023 Outlook
Consolidated net sales for full-year fiscal 2023 are now expected to range from
Second Quarter 2023 Outlook
The Company expects consolidated net sales for the second quarter will range from
While share repurchases are not included in the outlook, the Company had
Conference Call Information
On Thursday, May 25, 2023, the Company will host a conference call to discuss its earnings results at 9:00 a.m. Eastern Time. The telephone number for the call is 866-580-3963. A recorded version of the call will be available until midnight Wednesday, May 31, 2023, and may be accessed by dialing 866-583-1035. The access code is 1435784. A webcast of the call is accessible through Dollar Tree's website and will remain online through Wednesday, May 31, 2023.
Supplemental financial information for the first quarter is available on the Investor Relations portion of the Company’s website, at Corporate.DollarTree.com/Investors.
Dollar Tree, a Fortune 200 Company, operated 16,419 stores across 48 states and five Canadian provinces as of April 29, 2023. 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
A reconciliation of the non-GAAP financial measures to the corresponding amounts prepared in accordance with GAAP appears in the table “Reconciliation of Non-GAAP Financial Measures” below. The table provides 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 2023, including without limitation our expectations regarding net sales, comparable store sales and diluted earnings per share for the second fiscal quarter and full fiscal year 2023, and various factors that are expected to impact our quarterly and annual results of operations for fiscal 2023; our selling square footage and new store growth; our plans and expectations regarding our business, including the impact of various initiatives and investments on the company’s performance and prospects for long-term growth; and our other plans, objectives, expectations (financial and otherwise) and intentions. These statements are subject to risks and uncertainties. For a discussion of the risks, uncertainties and assumptions that could affect our future events, developments or results, you should carefully review the "Risk Factors," "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections in our Annual Report on Form 10-K filed March 10, 2023, our Form 10-Q for the most recently ended fiscal quarter and other filings we make from time to time with the Securities and Exchange Commission. In addition, we can provide no assurances that we will not be required to accrue additional amounts in future periods with respect to legal proceedings related to our
| DOLLAR TREE, INC. | ||||||||
| Condensed Consolidated Income Statements | ||||||||
| (In millions, except per share data) | ||||||||
| (Unaudited) | ||||||||
| 13 Weeks Ended | ||||||||
| April 29, 2023 | April 30, 2022 | |||||||
| Net sales | $ |
7,319.5 |
|
$ |
6,900.1 |
|
||
| Other revenue |
|
4.3 |
|
|
2.5 |
|
||
| Total revenue |
|
7,323.8 |
|
|
6,902.6 |
|
||
| Cost of sales |
|
5,089.1 |
|
|
4,559.6 |
|
||
| Selling, general and administrative expenses |
|
1,815.0 |
|
|
1,611.5 |
|
||
|
24.8 |
% |
|
23.3 |
% |
|||
| Operating income |
|
419.7 |
|
|
731.5 |
|
||
|
5.7 |
% |
|
10.6 |
% |
|||
| Interest expense, net |
|
25.9 |
|
|
34.0 |
|
||
| Other expense, net |
|
0.1 |
|
|
- |
|
||
| Income before income taxes |
|
393.7 |
|
|
697.5 |
|
||
|
5.4 |
% |
|
10.1 |
% |
|||
| Provision for income taxes |
|
94.7 |
|
|
161.1 |
|
||
| Income tax rate |
|
24.1 |
% |
|
23.1 |
% |
||
| Net income | $ |
299.0 |
|
$ |
536.4 |
|
||
|
4.1 |
% |
|
7.8 |
% |
|||
| Net earnings per share: | ||||||||
| Basic | $ |
1.35 |
|
$ |
2.38 |
|
||
| Weighted average number of shares |
|
221.1 |
|
|
225.3 |
|
||
| Diluted | $ |
1.35 |
|
$ |
2.37 |
|
||
| Weighted average number of shares |
|
221.7 |
|
|
226.4 |
|
||
| DOLLAR TREE, INC. | ||||||||||||||||||||
| Segment Information | ||||||||||||||||||||
| (In millions, except store count) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| 13 Weeks Ended | ||||||||||||||||||||
| April 29, 2023 | April 30, 2022 | |||||||||||||||||||
| Net sales: | ||||||||||||||||||||
| Dollar Tree | $ |
3,931.7 |
|
$ |
3,781.8 |
|
||||||||||||||
| Family Dollar |
|
3,387.8 |
|
|
3,118.3 |
|
||||||||||||||
| Total net sales | $ |
7,319.5 |
|
$ |
6,900.1 |
|
||||||||||||||
| Gross profit: | ||||||||||||||||||||
| Dollar Tree | $ |
1,388.6 |
|
35.3 |
% |
$ |
1,534.7 |
|
40.6 |
% |
||||||||||
| Family Dollar |
|
841.8 |
|
24.8 |
% |
|
805.8 |
|
25.8 |
% |
||||||||||
| Total gross profit | $ |
2,230.4 |
|
30.5 |
% |
$ |
2,340.5 |
|
33.9 |
% |
||||||||||
| Operating income (loss): | ||||||||||||||||||||
| Dollar Tree | $ |
535.7 |
|
13.6 |
% |
$ |
764.2 |
|
20.2 |
% |
||||||||||
| Family Dollar |
|
8.8 |
|
0.3 |
% |
|
89.5 |
|
2.9 |
% |
||||||||||
| Corporate, support and Other |
|
(124.8 |
) |
(1.7 |
%) |
|
(122.2 |
) |
(1.8 |
%) |
||||||||||
| Total operating income | $ |
419.7 |
|
5.7 |
% |
$ |
731.5 |
|
10.6 |
% |
||||||||||
| 13 Weeks Ended | ||||||||||||||||||||
| April 29, 2023 | April 30, 2022 | |||||||||||||||||||
| Dollar Tree |
Family Dollar |
Total | Dollar Tree |
Family Dollar |
Total | |||||||||||||||
| Store Count: | ||||||||||||||||||||
| Beginning |
|
8,134 |
|
8,206 |
|
|
16,340 |
|
8,061 |
|
8,016 |
|
16,077 |
|
||||||
| New stores |
|
32 |
|
75 |
|
|
107 |
|
42 |
|
70 |
|
112 |
|
||||||
| Re-bannered stores (a) |
|
2 |
|
(1 |
) |
|
1 |
|
(2 |
) |
5 |
|
3 |
|
||||||
| Closings |
|
(15 |
) |
(14 |
) |
|
(29 |
) |
(13 |
) |
(17 |
) |
(30 |
) |
||||||
| Ending |
|
8,153 |
|
8,266 |
|
|
16,419 |
|
8,088 |
|
8,074 |
|
16,162 |
|
||||||
| Selling Square Footage (in millions) |
|
70.7 |
|
62.3 |
|
|
133.0 |
|
70.0 |
|
59.8 |
|
129.8 |
|
||||||
| Growth Rate (Square Footage) |
|
1.0 |
% |
4.2 |
% |
|
2.5 |
% |
3.1 |
% |
3.1 |
% |
3.1 |
% |
||||||
| (a) Stores are included as re-banners when they close or open, respectively. | ||||||||||||||||||||
| DOLLAR TREE, INC. | ||||||||
| Reconciliation of Non-GAAP Financial Measures | ||||||||
| (In millions, except per share data) | ||||||||
| (Unaudited) | ||||||||
| From time-to-time, the Company discloses certain financial measures not derived in accordance with generally accepted accounting principles ("GAAP"). These non-GAAP financial measures should not be used as a substitute for GAAP financial measures, or considered in isolation, for the purposes of analyzing operating performance, financial position or cash flows. However, the Company believes providing additional information in the form of non-GAAP measures that exclude the unusual expenses described below is beneficial to the users of its financial statements in evaluating the Company's current operating results in relation to past periods. In addition, the Company's debt covenants exclude the impact of certain unusual expenses. The Company has included a reconciliation of these non-GAAP financial measures to the most comparable GAAP measures in the following tables. | ||||||||
| In the first quarter of 2023, the Company recorded a |
||||||||
| Reconciliation of Adjusted Net Income and Adjusted Diluted Earnings per Share (EPS) | ||||||||
| 13 Weeks Ended | ||||||||
| April 29, 2023 | April 30, 2022 | |||||||
| Net income (GAAP) | $ |
299.0 |
|
$ |
536.4 |
|||
| SG&A adjustments: | ||||||||
| Legal reserve |
|
30.0 |
|
|
- |
|||
| Total adjustments |
|
30.0 |
|
|
- |
|||
| Provision for income taxes on adjustments |
|
(3.9 |
) |
|
- |
|||
| Adjusted Net income (Non-GAAP) | $ |
325.1 |
|
$ |
536.4 |
|||
| Diluted earnings per share (GAAP) | $ |
1.35 |
|
$ |
2.37 |
|||
| Adjustments, net of tax |
|
0.12 |
|
|
- |
|||
| Adjusted Diluted EPS (Non-GAAP) | $ |
1.47 |
|
$ |
2.37 |
|||
| Reconciliation of Adjusted Operating Income | ||||||||
| 13 Weeks Ended | ||||||||
| April 29, 2023 | April 30, 2022 | |||||||
| Operating income (GAAP) | $ |
419.7 |
|
$ |
731.5 |
|||
| SG&A adjustments: | ||||||||
| Legal reserve |
|
30.0 |
|
|
- |
|||
| Total adjustments |
|
30.0 |
|
|
- |
|||
| Adjusted Operating income (Non-GAAP) | $ |
449.7 |
|
$ |
731.5 |
|||
| Reconciliation of Adjusted Operating Income - Family Dollar Segment | ||||||||
| 13 Weeks Ended | ||||||||
| April 29, 2023 | April 30, 2022 | |||||||
| Operating income (GAAP) | $ |
8.8 |
|
$ |
89.5 |
|||
| SG&A adjustments: | ||||||||
| Legal reserve |
|
30.0 |
|
|
- |
|||
| Total adjustments |
|
30.0 |
|
|
- |
|||
| Adjusted Operating income (Non-GAAP) | $ |
38.8 |
|
$ |
89.5 |
|||
| DOLLAR TREE, INC. | |||||||||
| Condensed Consolidated Balance Sheets | |||||||||
| (In millions) | |||||||||
| (Unaudited) | |||||||||
| April 29, 2023 | January 28, 2023 | April 30, 2022 | |||||||
| Cash and cash equivalents | $ |
872.8 |
$ |
642.8 |
$ |
1,218.5 |
|||
| Merchandise inventories |
|
5,112.0 |
|
5,449.3 |
|
4,801.1 |
|||
| Other current assets |
|
282.8 |
|
275.0 |
|
262.7 |
|||
| Total current assets |
|
6,267.6 |
|
6,367.1 |
|
6,282.3 |
|||
| Property, plant and equipment, net |
|
5,111.8 |
|
4,972.2 |
|
4,514.0 |
|||
| Restricted cash |
|
69.2 |
|
68.5 |
|
53.4 |
|||
| Operating lease right-of-use assets |
|
6,503.4 |
|
6,458.0 |
|
6,364.9 |
|||
| Goodwill |
|
1,982.6 |
|
1,983.1 |
|
1,984.3 |
|||
| Trade name intangible asset |
|
3,100.0 |
|
3,100.0 |
|
3,100.0 |
|||
| Deferred tax asset |
|
13.9 |
|
15.0 |
|
19.3 |
|||
| Other assets |
|
60.1 |
|
58.2 |
|
54.1 |
|||
| Total assets | $ |
23,108.6 |
$ |
23,022.1 |
$ |
22,372.3 |
|||
| Current portion of operating lease liabilities | $ |
1,456.9 |
$ |
1,449.6 |
$ |
1,406.7 |
|||
| Accounts payable |
|
1,597.6 |
|
1,899.8 |
|
1,794.1 |
|||
| Income taxes payable |
|
144.1 |
|
58.1 |
|
162.8 |
|||
| Other current liabilities |
|
942.9 |
|
817.7 |
|
926.3 |
|||
| Total current liabilities |
|
4,141.5 |
|
4,225.2 |
|
4,289.9 |
|||
| Long-term debt, net |
|
3,422.7 |
|
3,421.6 |
|
3,418.1 |
|||
| Operating lease liabilities, long-term |
|
5,269.0 |
|
5,255.3 |
|
5,087.9 |
|||
| Deferred income taxes, net |
|
1,107.8 |
|
1,105.7 |
|
1,060.7 |
|||
| Income taxes payable, long-term |
|
17.6 |
|
17.4 |
|
21.2 |
|||
| Other liabilities |
|
250.3 |
|
245.4 |
|
253.0 |
|||
| Total liabilities |
|
14,208.9 |
|
14,270.6 |
|
14,130.8 |
|||
| Shareholders' equity |
|
8,899.7 |
|
8,751.5 |
|
8,241.5 |
|||
| Total liabilities and shareholders' equity | $ |
23,108.6 |
$ |
23,022.1 |
$ |
22,372.3 |
|||
| The January 28, 2023 information was derived from the audited consolidated financial statements as of that date. | |||||||||
| DOLLAR TREE, INC. | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| (In millions) | ||||||||
| (Unaudited) | ||||||||
| 13 Weeks Ended | ||||||||
| April 29, 2023 | April 30, 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ |
299.0 |
|
$ |
536.4 |
|
||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization |
|
196.4 |
|
|
188.9 |
|
||
| Provision for deferred income taxes |
|
3.0 |
|
|
74.3 |
|
||
| Stock-based compensation expense |
|
28.3 |
|
|
35.8 |
|
||
| Amortization of debt discount and debt-issuance costs |
|
1.2 |
|
|
1.1 |
|
||
| Other non-cash adjustments to net income |
|
35.1 |
|
|
15.7 |
|
||
| Changes in operating assets and liabilities |
|
189.0 |
|
|
(313.7 |
) |
||
| Total adjustments |
|
453.0 |
|
|
2.1 |
|
||
| Net cash provided by operating activities |
|
752.0 |
|
|
538.5 |
|
||
| Cash flows from investing activities: | ||||||||
| Capital expenditures |
|
(350.4 |
) |
|
(253.4 |
) |
||
| Payments for fixed asset disposition |
|
(2.3 |
) |
|
(2.9 |
) |
||
| Net cash used in investing activities |
|
(352.7 |
) |
|
(256.3 |
) |
||
| Cash flows from financing activities: | ||||||||
| Proceeds from stock issued pursuant to stock-based compensation plans |
|
2.9 |
|
|
2.9 |
|
||
| Cash paid for taxes on exercises/vesting of stock-based compensation |
|
(27.1 |
) |
|
(37.8 |
) |
||
| Payments for repurchase of stock |
|
(143.4 |
) |
|
(14.2 |
) |
||
| Net cash used in financing activities |
|
(167.6 |
) |
|
(49.1 |
) |
||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
(1.0 |
) |
|
0.5 |
|
||
| Net increase in cash, cash equivalents and restricted cash |
|
230.7 |
|
|
233.6 |
|
||
| Cash, cash equivalents and restricted cash at beginning of period |
|
711.3 |
|
|
1,038.3 |
|
||
| Cash, cash equivalents and restricted cash at end of period | $ |
942.0 |
|
$ |
1,271.9 |
|
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230525005249/en/
Dollar Tree, Inc.
Randy Guiler, 757-321-5284
Vice President, Investor Relations
www.DollarTree.com
DLTR-E
Source: Dollar Tree, Inc.
