Dollar Tree, Inc. Reports Results for the Third Quarter Fiscal 2024

Rhea-AI Summary

Dollar Tree (DLTR) reported Q3 fiscal 2024 results with consolidated net sales increasing 3.5% to $7.56 billion. Same-store sales grew 1.8% across both Dollar Tree and Family Dollar segments. The company posted diluted EPS of $1.08 and adjusted diluted EPS of $1.12.

Key highlights include opening 249 new Dollar Tree and 6 new Family Dollar stores, with approximately 2,300 Dollar Tree stores converted to multi-price format. The company generated $785.6 million in operating cash flow and $359.2 million in free cash flow.

For fiscal 2024, Dollar Tree updated its outlook with net sales expected between $30.7-30.9 billion and adjusted diluted EPS of $5.31-5.51. The company also announced a CFO transition and continues its strategic review of the Family Dollar business.

Positive

• Same-store sales growth of 1.8% across both segments
• Gross profit increased 7.6% to $2.34 billion
• Gross margin expanded 120 basis points to 30.9%
• Operating income increased 10.5% to $333.4 million
• Generated $785.6 million in operating cash flow

Negative

• SG&A expenses increased to 26.6% of revenue from 25.7%
• Higher depreciation and professional fees impacting expenses
• 670 underperforming Family Dollar stores closed
• Year-to-date operating income decreased 5.2%

Insights

Financial Analyst

The Q3 earnings report reveals mixed performance with some concerning trends. While consolidated net sales grew 3.5% to $7.56B, the modest same-store sales growth of 1.8% across both banners barely outpaces inflation. The gross margin expansion of 120 basis points to 30.9% is positive, driven by lower freight costs and improved shrink management.

Key concerns include rising SG&A expenses at 26.6% of revenue (up from 25.7%), indicating cost control challenges. The ongoing Family Dollar strategic review and closure of 670 underperforming stores signals significant operational issues in that segment. The lowered full-year sales guidance range of $30.7B to $30.9B and adjusted EPS of $5.31 to $5.51 suggests continued headwinds.

The CFO transition adds another layer of uncertainty during a critical restructuring period. While free cash flow generation remains solid at $359.2M, the company faces significant challenges in revitalizing growth and improving operational efficiency.

Market Research Analyst

The multi-price format conversion strategy shows progress with approximately 2,300 Dollar Tree stores now featuring higher price points, though the modest 1.8% same-store sales growth suggests impact on driving meaningful revenue growth. The slight increase in traffic (1.6%) and minimal average ticket growth (0.2%) indicate consumers remain price-sensitive in the current economic environment.

The Family Dollar segment's strategic review and substantial store closures (670 locations) represent a significant restructuring effort to address underperforming assets. Market share competition in the discount retail space remains intense, particularly from competitors like Dollar General. The company's Q4 outlook projecting low-single-digit comparable store growth suggests continued challenging market conditions ahead.

• 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

CHESAPEAKE, Va.--(BUSINESS WIRE)-- 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 2024 Key Operating Results (unaudited)
(Compared to same period fiscal 2023)			Q3 Fiscal 2024		Change
Consolidated Net Sales			$7.56B		3.5%
Same-Store Net Sales Growth:
Dollar Tree Segment			1.8%
Family Dollar Segment			1.9%
Enterprise			1.8%
Operating Income			$333.4M		10.5%
Diluted EPS			$1.08		11.3%
Adjusted Operating Income1			$343.2M		13.8%
Adjusted Diluted EPS1			$1.12		15.5%
1	Adjustments are for costs related to store closures and Family Dollar Strategic Review professional fees. See “Reconciliation of Non-GAAP Financial Measures” below for detailed schedules of these charges.

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.

DOLLAR TREE, INC.
Condensed Consolidated Income Statements
(In millions, except per share data)
(Unaudited)
		13 Weeks Ended								39 Weeks Ended
		November 2, 2024				October 28, 2023				November 2, 2024				October 28, 2023
Revenues
Net sales		$	7,561.7			$	7,309.1			$	22,560.8			$	21,948.7
Other revenue			6.5				5.7				19.0				15.2
Total revenue			7,568.2				7,314.8				22,579.8				21,963.9
Expenses
Cost of sales			5,224.3				5,136.1				15,661.2				15,410.6
Selling, general and administrative expenses			2,010.5				1,877.0				5,961.5				5,544.1
Operating income			333.4				301.7				957.1				1,009.2
Interest expense, net			27.5				30.4				80.8				80.5
Other expense, net			0.1				0.2				0.2				0.2
Income before income taxes			305.8				271.1				876.1				928.5
Provision for income taxes			72.5				59.1				210.3				217.1
Net income		$	233.3			$	212.0			$	665.8			$	711.4
Net earnings per share:
Basic		$	1.09			$	0.97			$	3.08			$	3.23
Weighted average number of shares			215.0				218.9				215.9				220.0
Diluted		$	1.08			$	0.97			$	3.08			$	3.23
Weighted average number of shares			215.2				219.2				216.1				220.5
Selling, general and administrative expense rate			26.6	%			25.7	%			26.4	%			25.2	%
Operating income margin			4.4	%			4.1	%			4.2	%			4.6	%
Income before income taxes as percentage of total revenue			4.0	%			3.7	%			3.9	%			4.2	%
Effective tax rate			23.7	%			21.8	%			24.0	%			23.4	%
Net income margin			3.1	%			2.9	%			2.9	%			3.2	%
The selling, general and administrative expense rate, operating income margin and net income margin are calculated by dividing the applicable amount by total revenue.

DOLLAR TREE, INC.
Segment Information
(In millions)
(Unaudited)
		13 Weeks Ended														39 Weeks Ended
		November 2, 2024							October 28, 2023							November 2, 2024							October 28, 2023
Net sales:
Dollar Tree		$	4,338.0						$	4,003.8						$	12,569.1						$	11,808.9
Family Dollar			3,223.7							3,305.3							9,991.7							10,139.8
Total net sales		$	7,561.7						$	7,309.1						$	22,560.8						$	21,948.7
Gross profit:
Dollar Tree		$	1,534.1			35.4	%		$	1,393.8			34.8	%		$	4,401.9			35.0	%		$	4,075.7			34.5	%
Family Dollar			803.3			24.9	%			779.2			23.6	%			2,497.7			25.0	%			2,462.4			24.3	%
Total gross profit		$	2,337.4			30.9	%		$	2,173.0			29.7	%		$	6,899.6			30.6	%		$	6,538.1			29.8	%
Operating income (loss):
Dollar Tree		$	465.2			10.7	%		$	482.7			12.1	%		$	1,329.5			10.6	%		$	1,416.2			12.0	%
Family Dollar			1.6			-				(66.3	)		(2.0	%)			23.9			0.2	%			(45.7	)		(0.5	%)
Corporate, support and other			(133.4	)		(1.8	%)			(114.7	)		(1.6	%)			(396.3	)		(1.8	%)			(361.3	)		(1.6	%)
Total operating income		$	333.4			4.4	%		$	301.7			4.1	%		$	957.1			4.2	%		$	1,009.2			4.6	%

DOLLAR TREE, INC.
Condensed Consolidated Balance Sheets
(In millions)
(Unaudited)
		November 2, 2024			February 3, 2024			October 28, 2023
ASSETS
Current Assets:
Cash and cash equivalents		$	697.6		$	684.9		$	444.6
Merchandise inventories			5,535.1			5,112.8			5,515.1
Other current assets			398.8			335.0			342.4
Total current assets			6,631.5			6,132.7			6,302.1
Restricted cash			75.1			72.3			71.0
Property, plant and equipment, net			6,675.7			6,144.1			5,714.6
Operating lease right-of-use assets			6,721.3			6,488.3			6,767.9
Goodwill			912.8			913.8			1,981.9
Trade name intangible asset			2,150.0			2,150.0			3,100.0
Deferred tax asset			5.3			9.0			11.1
Other assets			161.1			113.3			82.6
Total assets		$	23,332.8		$	22,023.5		$	24,031.2
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings		$	-		$	-		$	229.6
Current portion of long-term debt			1,000.0			-			-
Current portion of operating lease liabilities			1,539.5			1,513.0			1,493.7
Accounts payable			2,945.1			2,063.8			1,857.0
Income taxes payable			8.0			52.7			-
Other current liabilities			920.7			1,067.2			1,067.6
Total current liabilities			6,413.3			4,696.7			4,647.9
Long-term debt, net, excluding current portion			2,430.0			3,426.3			3,425.1
Operating lease liabilities, long-term			5,580.2			5,447.6			5,539.9
Deferred income taxes, net			964.5			841.1			1,165.3
Income taxes payable, long-term			21.3			22.0			19.7
Other liabilities			287.4			276.7			235.1
Total liabilities			15,696.7			14,710.4			15,033.0
Shareholders' equity			7,636.1			7,313.1			8,998.2
Total liabilities and shareholders' equity		$	23,332.8		$	22,023.5		$	24,031.2
The February 3, 2024 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)
		39 Weeks Ended
		November 2, 2024				October 28, 2023
Cash flows from operating activities:
Net income		$	665.8			$	711.4
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			736.7				614.8
Provision for deferred income taxes			126.8				63.1
Stock-based compensation expense			84.3				76.4
Impairments			1.2				2.4
Other non-cash adjustments to net income			8.3				44.7
Changes in operating assets and liabilities			165.1				(83.2	)
Total adjustments			1,122.4				718.2
Net cash provided by operating activities			1,788.2				1,429.6
Cash flows from investing activities:
Capital expenditures			(1,399.3	)			(1,317.2	)
Proceeds from insurance recoveries			45.0				-
Payments for fixed asset disposition			(4.8	)			(5.1	)
Net cash used in investing activities			(1,359.1	)			(1,322.3	)
Cash flows from financing activities:
Proceeds from commercial paper notes			3,206.1				948.0
Repayments of commercial paper notes			(3,206.1	)			(718.9	)
Proceeds from stock issued pursuant to stock-based compensation plans			7.7				7.6
Cash paid for taxes on exercises/vesting of stock-based compensation			(20.6	)			(38.6	)
Payments for repurchase of stock			(400.0	)			(500.0	)
Net cash used in financing activities			(412.9	)			(301.9	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash			(0.7	)			(1.1	)
Net increase (decrease) in cash, cash equivalents and restricted cash			15.5				(195.7	)
Cash, cash equivalents and restricted cash at beginning of period			757.2				711.3
Cash, cash equivalents and restricted cash at end of period		$	772.7			$	515.6

DOLLAR TREE, INC.
Segment Information
(Unaudited)
			13 Weeks Ended
			November 2, 2024												October 28, 2023
			Dollar				Family								Dollar				Family
			Tree				Dollar				Total				Tree				Dollar				Total
Store Count:
Beginning				8,627				7,761				16,388				8,177				8,299				16,476
New stores				249				6				255				107				90				197
Re-bannered stores (a)				-				(4	)			(4	)			1				(9	)			(8	)
Closings				(8	)			(41	)			(49	)			(13	)			(30	)			(43	)
Ending				8,868				7,722				16,590				8,272				8,350				16,622
Selling Square Footage (in millions)				78.3				59.0				137.3				71.9				63.4				135.3
Growth Rate (Square Footage)				8.9	%			(6.9	%)			1.5	%			2.3	%			3.8	%			3.0	%
			39 Weeks Ended
			November 2, 2024												October 28, 2023
			Dollar				Family								Dollar				Family
			Tree				Dollar				Total				Tree				Dollar				Total
Store Count:
Beginning				8,415				8,359				16,774				8,134				8,206				16,340
New stores				492				75				567				187				235				422
Re-bannered stores (a)				8				(14	)			(6	)			5				(10	)			(5	)
Closings				(47	)			(698	)			(745	)			(54	)			(81	)			(135	)
Ending				8,868				7,722				16,590				8,272				8,350				16,622
Selling Square Footage (in millions)				78.3				59.0				137.3				71.9				63.4				135.3
Growth Rate (Square Footage)				8.9	%			(6.9	%)			1.5	%			2.3	%			3.8	%			3.0	%
(a)	Stores are included as re-banners when they close or open, respectively.
			52 Weeks Ended
			November 2, 2024												October 28, 2023
			Dollar				Family								Dollar				Family
			Tree				Dollar				Total				Tree				Dollar				Total
Sales per Square Foot (b)			$	233			$	223			$	229			$	227			$	218			$	222
(b)	Sales per square foot is calculated based on total net sales for the reporting period divided by the average selling square footage during the period.

DOLLAR TREE, INC.
Reconciliation of Non-GAAP Financial Measures
(In millions, except per share data)
(Unaudited)
From time-to-time, the Company discloses certain financial measures not derived in accordance with GAAP. These non-GAAP financial measures should not be used as a substitute for GAAP financial measures, or considered in isolation, for the purposes of analyzing operating performance, financial position, liquidity, or cash flows. The non-GAAP financial measures we have disclosed include adjusted 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. The Company believes providing additional information in these non-GAAP measures that exclude the unusual expenses described below is beneficial to the users of its financial statements in evaluating the Company's current operating results in relation to past periods. In addition, the Company's debt covenants exclude the impact of certain unusual expenses. The Company has included a reconciliation of these non-GAAP financial measures to the most comparable GAAP measures in the following tables.
1.)	In the first quarter of fiscal 2023, the Company recorded a $30.0 million charge to its legal reserve for West Memphis-related matters. In the fourth quarter of fiscal 2023, an additional $26.7 million charge was recorded to the legal reserve for these matters. In the first quarter of fiscal 2024, the existing reserve was reduced by $2.5 million based on updated information.
2.)	During the fourth quarter of fiscal 2023, we announced that we had initiated a comprehensive store portfolio optimization review which involved identifying stores for closure, relocation or re-bannering based on an evaluation of current market conditions and individual store performance, among other factors. In connection with this portfolio optimization review, we closed approximately 630 Family Dollar stores in the first three quarters of fiscal 2024 and incurred more than $25 million of costs including severance and retention expenses for impacted associates and other related closure costs. This included the closure of approximately 30 Family Dollar stores during the third quarter of fiscal 2024 and more than $1 million of costs incurred.
3.)	During the first quarter of fiscal 2024, a tornado destroyed our Dollar Tree distribution center in Marietta, Oklahoma ("DC 8"). We incurred losses for damaged inventory and property and equipment, which are fully insured and therefore not contemplated in the non-GAAP adjustments below. In the second quarter of fiscal 2024, we incurred $2.2 million of severance-related costs for employees at DC 8.
4.)	During the second quarter of fiscal 2024, we announced that we had initiated a formal review of strategic alternatives for the Family Dollar segment, which could include among others, a potential sale, spin-off or other disposition of the business. Since the second quarter of fiscal 2024, we incurred consulting and other expenses totaling $14.5 million related to the strategic review, including $8.3 million during the third quarter of fiscal 2024.
In addition, the Company discloses free cash flow, a non-GAAP financial measure that we calculate as net cash provided by operating activities less capital expenditures. The Company believes free cash flow is an important indicator of our liquidity as it measures the amount of cash we generate from our business operations. Free cash flow may not represent the amount of cash flow available for general discretionary use, because it excludes non-discretionary expenditures, such as mandatory debt repayments and required settlements of recorded and/or contingent liabilities not reflected in cash flow from operations. The Company has included a reconciliation of free cash flow to the most comparable GAAP measures in the following tables.
A reconciliation of the projected adjusted diluted EPS, which is a forward-looking non-GAAP financial measure, to the most directly comparable GAAP financial measure, is not provided because the company is unable to provide such reconciliation without unreasonable effort. The inability to provide a reconciliation is due to the uncertainty and inherent difficulty predicting the occurrence, the financial impact and the periods in which the non-GAAP adjustments may be recognized. GAAP measures may include the impact of such items as litigation reserves; restructuring charges; goodwill and intangible asset impairments; natural disasters; our store portfolio optimization review and strategic review of Family Dollar, and the tax effect of all such items. Historically, the company has excluded these items from non-GAAP financial measures. The company currently expects to continue to exclude these items in future disclosures of non-GAAP financial measures and may also exclude other items that may arise (collectively, “non-GAAP adjustments”). The decisions and events that typically lead to the recognition of non-GAAP adjustments, such as a decision to exit part of the business or reaching settlement of a legal dispute, are inherently unpredictable as to if or when they may occur. For the same reasons, the company is unable to address the probable significance of the unavailable information, which could be material to future results.
Reconciliation of Adjusted Selling, General and Administrative Expenses			13 Weeks Ended													39 Weeks Ended
			November 2, 2024							October 28, 2023						November 2, 2024							October 28, 2023
Selling, general and administrative expenses (GAAP)			$	2,010.5			26.6	%		$	1,877.0		25.7	%		$	5,961.5			26.4	%		$	5,544.1			25.2	%
Deduct: Store Closure Costs				(1.5	)		-				-		-				(25.6	)		(0.1	%)			-			-
Add/Deduct: Legal Reserve				-			-				-		-				2.5			-				(30.0	)		(0.1	%)
Deduct: Strategic Review Costs				(8.3	)		(0.1	%)			-		-				(14.5	)		(0.1	%)			-			-
Deduct: Severance				-			-				-		-				(2.2	)		-				-			-
Total adjustments				(9.8	)		(0.1	%)			-		-				(39.8	)		(0.2	%)			(30.0	)		(0.1	%)
Adjusted selling, general and administrative expenses (Non-GAAP)			$	2,000.7			26.5	%		$	1,877.0		25.7	%		$	5,921.7			26.2	%		$	5,514.1			25.1	%

DOLLAR TREE, INC.
Reconciliation of Non-GAAP Financial Measures
(In millions, except per share data)
(Unaudited)
Reconciliation of Adjusted Selling, General and Administrative Expenses - Dollar Tree Segment			13 Weeks Ended													39 Weeks Ended
			November 2, 2024							October 28, 2023						November 2, 2024							October 28, 2023
Selling, general and administrative expenses (GAAP)			$	1,069.0			24.6	%		$	911.1		22.8	%		$	3,072.5			24.4	%		$	2,659.5			22.5	%
Deduct: Severance				-			-				-		-				(2.2	)		-				-			-
Deduct: Strategic Review Costs				(1.2	)		-				-		-				(1.2	)		-				-			-
Total adjustments				(1.2	)		-				-		-				(3.4	)		-				-			-
Adjusted selling, general and administrative expenses (Non-GAAP)			$	1,067.8			24.6	%		$	911.1		22.8	%		$	3,069.1			24.4	%		$	2,659.5			22.5	%
Reconciliation of Adjusted Selling, General and Administrative Expenses - Family Dollar Segment			13 Weeks Ended													39 Weeks Ended
			November 2, 2024							October 28, 2023						November 2, 2024							October 28, 2023
Selling, general and administrative expenses (GAAP)			$	805.0			24.9	%		$	848.3		25.6	%		$	2,483.2			24.8	%		$	2,515.5			24.8	%
Deduct: Store Closure Costs				(1.6	)		-				-		-				(23.2	)		(0.2	%)			-			-
Add/Deduct: Legal Reserve				-			-				-		-				2.5			-				(30.0	)		(0.3	%)
Deduct: Strategic Review Costs				(7.1	)		(0.2	%)			-		-				(13.3	)		(0.1	%)			-			-
Total adjustments				(8.7	)		(0.2	%)			-		-				(34.0	)		(0.3	%)			(30.0	)		(0.3	%)
Adjusted selling, general and administrative expenses (Non-GAAP)			$	796.3			24.7	%		$	848.3		25.6	%		$	2,449.2			24.5	%		$	2,485.5			24.5	%

DOLLAR TREE, INC.
Reconciliation of Non-GAAP Financial Measures
(In millions, except per share data)
(Unaudited)
Reconciliation of Adjusted Operating Income			13 Weeks Ended													39 Weeks Ended
			November 2, 2024						October 28, 2023							November 2, 2024							October 28, 2023
Operating income (GAAP)			$	333.4		4.4	%		$	301.7			4.1	%		$	957.1			4.2	%		$	1,009.2			4.6	%
SG&A adjustments:
Add: Store Closure Costs				1.5		-				-			-				25.6			0.1	%			-			-
Add/Deduct: Legal Reserve				-		-				-			-				(2.5	)		-				30.0			0.1	%
Add: Strategic Review Costs				8.3		0.1	%			-			-				14.5			0.1	%			-			-
Add: Severance				-		-				-			-				2.2			-				-			-
Total adjustments				9.8		0.1	%			-			-				39.8			0.2	%			30.0			0.1	%
Adjusted operating income (Non-GAAP)			$	343.2		4.5	%		$	301.7			4.1	%		$	996.9			4.4	%		$	1,039.2			4.7	%
Reconciliation of Adjusted Operating Income - Dollar Tree Segment			13 Weeks Ended													39 Weeks Ended
			November 2, 2024						October 28, 2023							November 2, 2024							October 28, 2023
Operating income (GAAP)			$	465.2		10.7	%		$	482.7			12.1	%		$	1,329.5			10.6	%		$	1,416.2			12.0	%
SG&A adjustments:
Add: Severance				-		-				-			-				2.2			-				-			-
Add: Strategic Review Costs				1.2		-				-			-				1.2			-				-			-
Total adjustments				1.2		-				-			-				3.4			-				-			-
Adjusted operating income (Non-GAAP)			$	466.4		10.7	%		$	482.7			12.1	%		$	1,332.9			10.6	%		$	1,416.2			12.0	%
Reconciliation of Adjusted Operating Income (Loss) - Family Dollar Segment			13 Weeks Ended													39 Weeks Ended
			November 2, 2024						October 28, 2023							November 2, 2024							October 28, 2023
Operating income (loss) (GAAP)			$	1.6		-			$	(66.3	)		(2.0	%)		$	23.9			0.2	%		$	(45.7	)		(0.5	%)
SG&A adjustments:
Add: Store Closure Costs				1.6		-				-			-				23.2			0.2	%			-			-
Add/Deduct: Legal Reserve				-		-				-			-				(2.5	)		-				30.0			0.3	%
Add: Strategic Review Costs				7.1		0.2	%			-			-				13.3			0.1	%			-			-
Total adjustments				8.7		0.2	%			-			-				34.0			0.3	%			30.0			0.3	%
Adjusted operating income (loss) (Non-GAAP)			$	10.3		0.2	%		$	(66.3	)		(2.0	%)		$	57.9			0.5	%		$	(15.7	)		(0.2	%)

DOLLAR TREE, INC.
Reconciliation of Non-GAAP Financial Measures
(In millions, except per share data)
(Unaudited)
Reconciliation of Adjusted Net Income			13 Weeks Ended								39 Weeks Ended
			November 2, 2024				October 28, 2023				November 2, 2024				October 28, 2023
Net income (GAAP)			$	233.3			$	212.0			$	665.8			$	711.4
SG&A adjustments:
Add: Store Closure Costs				1.5				-				25.6				-
Add/Deduct: Legal Reserve				-				-				(2.5	)			30.0
Add: Strategic Review Costs				8.3				-				14.5				-
Add: Severance				-				-				2.2				-
Total adjustments				9.8				-				39.8				30.0
Provision for income taxes on adjustments				(2.5	)			-				(10.1	)			(3.9	)
Adjusted net income (Non-GAAP)			$	240.6			$	212.0			$	695.5			$	737.5
Reconciliation of Adjusted Diluted Earnings Per Share			13 Weeks Ended								39 Weeks Ended
			November 2, 2024				October 28, 2023				November 2, 2024				October 28, 2023
Diluted net income per share (GAAP)			$	1.08			$	0.97			$	3.08			$	3.23
SG&A adjustments:
Add: Store Closure Costs				0.01				-				0.12				-
Add/Deduct: Legal Reserve				-				-				(0.01	)			0.14
Add: Strategic Review Costs				0.04				-				0.07				-
Add: Severance				-				-				0.01				-
Total adjustments				0.05				-				0.19				0.14
Provision for income taxes on adjustments				(0.01	)			-				(0.05	)			(0.02	)
Adjusted diluted net income per share (Non-GAAP)			$	1.12			$	0.97			$	3.22			$	3.35
Reconciliation of Adjusted Effective Tax Rate			13 Weeks Ended								39 Weeks Ended
			November 2, 2024				October 28, 2023				November 2, 2024				October 28, 2023
Effective tax rate (GAAP)				23.7	%			21.8	%			24.0	%			23.4	%
Add/Deduct: Tax impact of non-GAAP adjustments (c)				0.1	%			-				0.1	%			(0.3	%)
Adjusted effective tax rate (Non-GAAP)				23.8	%			21.8	%			24.1	%			23.1	%
(c)	Adjustments related to the tax effect of non-GAAP adjustments, which were determined based on the nature of the underlying non-GAAP adjustments and their relevant tax rates.

DOLLAR TREE, INC.
Reconciliation of Non-GAAP Financial Measures
(In millions, except per share data)
(Unaudited)
Reconciliation of Net Cash Provided by (Used in) Operating Activities to Free Cash Flow			13 Weeks Ended								39 Weeks Ended
			November 2, 2024				October 28, 2023				November 2, 2024				October 28, 2023
Net cash provided by (used in) operating activities (GAAP)			$	785.6			$	505.8			$	1,788.2			$	1,429.6
Deduct:
Capital expenditures				(426.4	)			(541.4	)			(1,399.3	)			(1,317.2	)
Free cash flow (Non-GAAP)			$	359.2			$	(35.6	)		$	388.9			$	112.4
Net cash provided by (used in) investing activities (GAAP) (d)			$	(409.1	)		$	(541.3	)		$	(1,359.1	)		$	(1,322.3	)
Net cash provided by (used in) financing activities (GAAP)			$	(248.0	)		$	(29.7	)		$	(412.9	)		$	(301.9	)
(d)	Net cash provided by (used in) investing activities includes capital expenditures, which is included in our computation of free cash flow.

 

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Dollar Tree, Inc.

Robert A. LaFleur, 757-991-5645

Senior Vice President, Investor Relations

www.DollarTree.com

DLTR-E

Source: Dollar Tree, Inc.

FAQ

What was Dollar Tree's (DLTR) same-store sales growth in Q3 2024?

Dollar Tree reported same-store sales growth of 1.8% across both Dollar Tree and Family Dollar segments in Q3 2024.

How many stores did Dollar Tree (DLTR) close in 2024 as part of its optimization?

As of November 2, 2024, Dollar Tree has closed approximately 670 underperforming Family Dollar stores, with plans to close an additional 25 stores during the remainder of fiscal 2024.

What is Dollar Tree's (DLTR) earnings guidance for fiscal 2024?

Dollar Tree expects adjusted diluted EPS of $5.31 to $5.51 and net sales between $30.7 billion to $30.9 billion for fiscal 2024.