Dollar Tree, Inc. Reports Results for the Fourth Quarter Fiscal 2023
-
Same-Store
Net Sales : +6.3%; FamilyDollar Tree Dollar -1 .2%; Enterprise +3.0% -
Comparable Transaction Count:
Dollar Tree +7.1%; FamilyDollar +0 .7% -
Diluted Loss per Share of
$7.85 -
Results Include a
$594.4 Million Charge for Portfolio Optimization Review, a$1.07 Billion Goodwill Impairment Charge, and a$950 Million Trade Name Intangible Asset Impairment Charge. -
Adjusted Earnings per Share (EPS) of
$2.55 , Including$0.17 of Costs Primarily Related to General Liability Claims. -
Quarter and Annual Results Reflect
Extra Week as Fiscal 2023 was a 53-Week Year. -
Portfolio Optimization Review Identifies Approximately 600
Family Dollar Stores for Closure in First Half of Fiscal 2024 and Approximately 370 Additional Stores as Their Leases Expire. -
Fiscal 2024
Net Sales Outlook Range of$31.0 Billion to$32.0 Billion -
Fiscal 2024
Diluted EPS Outlook Range of$6.70 to$7.30
“We finished the year strong, with fourth quarter results reflecting positive traffic trends, market share gains, and adjusted margin improvement across both segments,” said
Chief Financial Officer
Additional Business Highlights
- Opened 219 new stores in the fourth quarter, bringing full-year new store openings to 641
-
$3 and$5 center-store merchandise available at approximately5,000 Dollar Tree stores -
$3 ,$4 , and$5 frozen and refrigerated items available at more than6,500 Dollar Tree stores -
Net cash provided by operating activities increased
$1.07 billion in FY 2023 -
Increased free cash flow by
$217.2 million compared to FY 2022
Fourth Quarter and Fiscal 2023 Key Operating Results (unaudited) |
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(Compared to same period fiscal 2022) |
|
Q4 Fiscal 2023 |
|
Change |
|
Fiscal 2023 |
|
Change |
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|
|
|
|
|
|
|
|
|
||||
Consolidated |
|
|
|
11.9 |
% |
|
|
|
8.0 |
% |
||
|
|
|
|
|
|
|
|
|
||||
Same-Store Net Sales Growth: |
|
|
|
|
|
|
|
|
||||
Dollar Tree Segment |
|
6.3 |
% |
|
|
|
5.8 |
% |
|
|
||
Family Dollar Segment |
|
(1.2 |
%) |
|
|
|
3.2 |
% |
|
|
||
Enterprise |
|
3.0 |
% |
|
|
|
4.6 |
% |
|
|
||
|
|
|
|
|
|
|
|
|
||||
Operating Income |
|
( |
) |
|
NM |
|
|
( |
) |
|
NM |
|
Diluted EPS |
|
( |
) |
|
NM |
|
|
( |
) |
|
NM |
|
|
|
|
|
|
|
|
|
|
||||
Adjusted Operating Income1 |
|
|
|
21.2 |
% |
|
|
|
(20.0 |
%) |
||
Adjusted Diluted EPS1 |
|
|
|
|
25.0 |
% |
|
|
|
|
(18.3 |
%) |
1 Adjustments are due to charges related to legal reserves, store optimization review, and annual impairment testing of goodwill and non-amortizing intangible assets. See “Reconciliation of Non-GAAP Financial Measures” below for detailed schedules of these charges. |
Fourth Quarter Results
Unless otherwise noted, all comparisons are between the 14 weeks ended
Consolidated net sales increased 11.9% to
Gross profit increased 16.2% to
Selling, general and administrative expenses were 54.0% of total revenue, compared to 22.9%. The increase was due to a non-cash goodwill impairment charge, a non-cash trade name impairment charge, a non-cash store asset impairment charge, a litigation charge, unfavorable development of general liability claims, labor investments in store and field payroll, investments in repairs and maintenance, and higher depreciation and amortization, partially offset by sales leverage, the impact of the 53rd week in fiscal 2023, and lower utility costs. On a non-GAAP basis, which excludes the impairment and litigation charges, adjusted selling, general and administrative costs were 24.4% of total revenue.
Operating loss was
The Company’s effective tax rate was 10.8%. On a non-GAAP basis, the adjusted effective tax rate was 23.1% compared to 23.4%.
Net loss was
Given the portfolio review process, the Company did not repurchase any shares during the quarter.
Year-to-Date Results
Unless otherwise noted, all comparisons are between the 53 weeks ended
Consolidated net sales increased 8.0% to
Gross profit increased 4.3% to
Selling, general and administrative expenses were 33.4% of total revenue, compared to 23.6%. The increase was due to a non-cash goodwill impairment charge, a non-cash trade name impairment charge, a non-cash store asset impairment charge, a litigation charge, labor investments in store and field payroll, unfavorable development of general liability claims, investments in repairs and maintenance, and higher depreciation and amortization, partially offset by sales leverage and the impact of the 53rd week in fiscal 2023. On a non-GAAP basis, which excludes the impairment and litigation charges, adjusted selling, general and administrative costs were 24.9% of total revenue.
Operating loss was
The Company’s effective tax rate was -1.0%. On a non-GAAP basis, the adjusted effective tax rate was 23.1% compared to 23.5%.
Net loss was
The Company repurchased 3,905,599 shares for
Portfolio Optimization Review and Impairments
During the fourth quarter of fiscal 2023, the Company announced that it 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 this review, we plan on closing approximately 600 Family Dollar stores in the first half of fiscal 2024. Additionally, approximately 370 Family Dollar and 30
First Quarter and Fiscal 2024 Outlook
“We are introducing an initial fiscal 2024 EPS outlook of
Consolidated net sales for full-year fiscal 2024 are expected to range from
Our fiscal 2024 outlook reflects approximately
The Company expects consolidated net sales for the first quarter will range from
While share repurchases are not included in the outlook, the Company has
Conference Call Information
On
Supplemental financial information for the Fourth Quarter is available on the Investor Relations portion of the Company’s website, at https://corporate.dollartree.com/investors.
Use of Non-GAAP Financial Measures
The Company reports its financial results in accordance with accounting principles generally accepted in
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 diluted earnings per share for the first 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 selling square footage for fiscal 2024; our plans and expectations regarding our business, including the impact of various initiatives, investments, and reviews 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
|
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Condensed Consolidated Statements of Operations | ||||||||||||||||
(In millions, except per share data) | ||||||||||||||||
14 Weeks Ended |
13 Weeks Ended |
53 Weeks Ended |
52 Weeks Ended |
|||||||||||||
2024 |
2023 |
2024 |
2023 |
|||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
Revenues | ||||||||||||||||
Net sales |
$ |
8,632.9 |
|
$ |
7,716.2 |
|
$ |
30,581.6 |
|
$ |
28,318.2 |
|
||||
Other revenue |
|
7.0 |
|
|
4.5 |
|
|
22.2 |
|
|
13.5 |
|
||||
Total revenue |
|
8,639.9 |
|
|
7,720.7 |
|
|
30,603.8 |
|
|
28,331.7 |
|
||||
Expenses | ||||||||||||||||
Cost of sales |
|
5,861.4 |
|
|
5,330.7 |
|
|
21,272.0 |
|
|
19,396.3 |
|
||||
Selling, general and administrative expenses, excluding |
|
3,600.5 |
|
|
1,771.9 |
|
|
9,144.6 |
|
|
6,699.1 |
|
||||
|
|
1,069.0 |
|
|
- |
|
|
1,069.0 |
|
|
- |
|
||||
Selling, general and administrative expenses |
|
4,669.5 |
|
|
1,771.9 |
|
|
10,213.6 |
|
|
6,699.1 |
|
||||
Operating income (loss) |
|
(1,891.0 |
) |
|
618.1 |
|
|
(881.8 |
) |
|
2,236.3 |
|
||||
Interest expense, net |
|
26.3 |
|
|
28.0 |
|
|
106.8 |
|
|
125.3 |
|
||||
Other (income) expense, net |
|
(0.1 |
) |
|
0.1 |
|
|
0.1 |
|
|
0.4 |
|
||||
Income (loss) before income taxes |
|
(1,917.2 |
) |
|
590.0 |
|
|
(988.7 |
) |
|
2,110.6 |
|
||||
Provision for income taxes |
|
(207.4 |
) |
|
137.8 |
|
|
9.7 |
|
|
495.2 |
|
||||
Net income (loss) |
$ |
(1,709.8 |
) |
$ |
452.2 |
|
$ |
(998.4 |
) |
$ |
1,615.4 |
|
||||
Net earnings (loss) per share: | ||||||||||||||||
Basic |
$ |
(7.85 |
) |
$ |
2.05 |
|
$ |
(4.55 |
) |
$ |
7.24 |
|
||||
Weighted average number of shares |
|
217.9 |
|
|
221.1 |
|
|
219.5 |
|
|
223.2 |
|
||||
Diluted |
$ |
(7.85 |
) |
$ |
2.04 |
|
$ |
(4.55 |
) |
$ |
7.21 |
|
||||
Weighted average number of shares |
|
217.9 |
|
|
221.9 |
|
|
219.5 |
|
|
224.1 |
|
||||
Selling, general and administrative expense rate |
|
54.0 |
% |
|
22.9 |
% |
|
33.4 |
% |
|
23.6 |
% |
||||
Operating income (loss) margin |
|
(21.9 |
%) |
|
8.0 |
% |
|
(2.9 |
%) |
|
7.9 |
% |
||||
Income (loss) before income taxes as percentage of total revenue |
|
(22.2 |
%) |
|
7.6 |
% |
|
(3.2 |
%) |
|
7.4 |
% |
||||
Effective tax rate |
|
10.8 |
% |
|
23.4 |
% |
|
(1.0 |
%) |
|
23.5 |
% |
||||
Net income (loss) margin |
|
(19.8 |
%) |
|
5.9 |
% |
|
(3.3 |
%) |
|
5.7 |
% |
||||
The information for the year ended |
||||||||||||||||
The selling, general and administrative expense rate, operating income (loss) margin and net income (loss) margin are calculated by dividing the applicable amount by total revenue. |
|
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Segment Information | ||||||||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
14 Weeks Ended |
13 Weeks Ended |
53 Weeks Ended |
52 Weeks Ended |
|||||||||||||||||||||||||
2024 |
2023 |
2024 |
2023 |
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(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||||||
Net sales: | ||||||||||||||||||||||||||||
|
$ |
4,961.4 |
|
$ |
4,296.7 |
|
$ |
16,770.3 |
|
$ |
15,405.7 |
|
||||||||||||||||
Family Dollar |
|
3,671.5 |
|
|
3,419.5 |
|
|
13,811.3 |
|
|
12,912.5 |
|
||||||||||||||||
Total net sales |
$ |
8,632.9 |
|
$ |
7,716.2 |
|
$ |
30,581.6 |
|
$ |
28,318.2 |
|
||||||||||||||||
Gross profit: | ||||||||||||||||||||||||||||
|
$ |
1,933.2 |
|
39.0 |
% |
$ |
1,577.6 |
|
36.7 |
% |
$ |
6,008.9 |
|
35.8 |
% |
$ |
5,775.5 |
|
37.5 |
% |
||||||||
Family Dollar |
|
838.3 |
|
22.8 |
% |
|
807.9 |
|
23.6 |
% |
|
3,300.7 |
|
23.9 |
% |
|
3,146.4 |
|
24.4 |
% |
||||||||
Total gross profit |
$ |
2,771.5 |
|
32.1 |
% |
$ |
2,385.5 |
|
30.9 |
% |
$ |
9,309.6 |
|
30.4 |
% |
$ |
8,921.9 |
|
31.5 |
% |
||||||||
Operating income (loss): | ||||||||||||||||||||||||||||
|
$ |
862.6 |
|
17.4 |
% |
$ |
721.3 |
|
16.8 |
% |
$ |
2,278.8 |
|
13.6 |
% |
$ |
2,536.0 |
|
16.5 |
% |
||||||||
Family Dollar |
|
(2,617.8 |
) |
(71.2 |
%) |
|
1.4 |
|
0.0 |
% |
|
(2,663.5 |
) |
(19.3 |
%) |
|
127.5 |
|
1.0 |
% |
||||||||
Corporate, support and other |
|
(135.8 |
) |
(1.6 |
%) |
|
(104.6 |
) |
(1.4 |
%) |
|
(497.1 |
) |
(1.6 |
%) |
|
(427.2 |
) |
(1.5 |
%) |
||||||||
Total operating income (loss) |
$ |
(1,891.0 |
) |
(21.9 |
%) |
$ |
618.1 |
|
8.0 |
% |
$ |
(881.8 |
) |
(2.9 |
%) |
$ |
2,236.3 |
|
7.9 |
% |
||||||||
The information for the year ended |
||||||||||||||||||||||||||||
|
||||||
Condensed Consolidated Balance Sheets | ||||||
(In millions) | ||||||
|
|
|||||
(Unaudited) | ||||||
ASSETS | ||||||
Current Assets: | ||||||
Cash and cash equivalents |
$ |
684.9 |
$ |
642.8 |
||
Merchandise inventories |
|
5,112.8 |
|
5,449.3 |
||
Other current assets |
|
335.0 |
|
275.0 |
||
Total current assets |
|
6,132.7 |
|
6,367.1 |
||
Restricted cash |
|
72.3 |
|
68.5 |
||
Property, plant and equipment, net |
|
6,144.1 |
|
4,972.2 |
||
Operating lease right-of-use assets |
|
6,488.3 |
|
6,458.0 |
||
|
|
913.8 |
|
1,983.1 |
||
Trade name intangible asset |
|
2,150.0 |
|
3,100.0 |
||
Deferred tax asset |
|
9.0 |
|
15.0 |
||
Other assets |
|
113.3 |
|
58.2 |
||
Total assets |
$ |
22,023.5 |
$ |
23,022.1 |
||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Current portion of operating lease liabilities |
$ |
1,513.0 |
$ |
1,449.6 |
||
Accounts payable |
|
2,063.8 |
|
1,899.8 |
||
Income taxes payable |
|
52.7 |
|
58.1 |
||
Other current liabilities |
|
1,067.2 |
|
817.7 |
||
Total current liabilities |
|
4,696.7 |
|
4,225.2 |
||
Long-term debt, net |
|
3,426.3 |
|
3,421.6 |
||
Operating lease liabilities, long-term |
|
5,447.6 |
|
5,255.3 |
||
Deferred income taxes, net |
|
841.1 |
|
1,105.7 |
||
Income taxes payable, long-term |
|
22.0 |
|
17.4 |
||
Other liabilities |
|
276.7 |
|
245.4 |
||
Total liabilities |
|
14,710.4 |
|
14,270.6 |
||
Shareholders' equity |
|
7,313.1 |
|
8,751.5 |
||
Total liabilities and shareholders' equity |
$ |
22,023.5 |
$ |
23,022.1 |
||
The |
|
||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
(In millions) | ||||||||
53 Weeks Ended | 52 Weeks Ended | |||||||
|
|
|||||||
(Unaudited) | ||||||||
Cash flows from operating activities: | ||||||||
Net income (loss) |
$ |
(998.4 |
) |
$ |
1,615.4 |
|
||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
|
|
1,069.0 |
|
|
- |
|
||
Depreciation and amortization |
|
841.0 |
|
|
767.9 |
|
||
Provision for deferred income taxes |
|
(258.6 |
) |
|
123.0 |
|
||
Stock-based compensation expense |
|
96.7 |
|
|
110.4 |
|
||
Impairments, excluding goodwill |
|
1,461.5 |
|
|
40.0 |
|
||
Other non-cash adjustments to net income (loss) |
|
20.7 |
|
|
23.7 |
|
||
Changes in operating assets and liabilities |
|
452.6 |
|
|
(1,065.6 |
) |
||
Total adjustments |
|
3,682.9 |
|
|
(0.6 |
) |
||
Net cash provided by operating activities |
|
2,684.5 |
|
|
1,614.8 |
|
||
Cash flows from investing activities: | ||||||||
Capital expenditures |
|
(2,101.3 |
) |
|
(1,248.8 |
) |
||
Payments for fixed asset disposition |
|
(6.3 |
) |
|
(5.0 |
) |
||
Net cash used in investing activities |
|
(2,107.6 |
) |
|
(1,253.8 |
) |
||
Cash flows from financing activities: | ||||||||
Proceeds from revolving credit facility |
|
- |
|
|
555.0 |
|
||
Repayments of revolving credit facility |
|
- |
|
|
(555.0 |
) |
||
Proceeds from commercial paper notes |
|
1,067.9 |
|
|
- |
|
||
Repayments of commercial paper notes |
|
(1,067.9 |
) |
|
- |
|
||
Proceeds from stock issued pursuant to stock-based compensation plans |
|
10.0 |
|
|
9.3 |
|
||
Cash paid for taxes on exercises/vesting of stock-based compensation |
|
(40.0 |
) |
|
(48.6 |
) |
||
Payments for repurchase of stock |
|
(500.0 |
) |
|
(647.5 |
) |
||
Net cash used in financing activities |
|
(530.0 |
) |
|
(686.8 |
) |
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
(1.0 |
) |
|
(1.2 |
) |
||
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
45.9 |
|
|
(327.0 |
) |
||
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 |
$ |
757.2 |
|
$ |
711.3 |
|
||
The information for the year ended |
|
|||||||||||||||||||||||||
Segment Information | |||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
14 Weeks Ended | 13 Weeks Ended | ||||||||||||||||||||||||
|
|
||||||||||||||||||||||||
Dollar | Family | Dollar | Family | ||||||||||||||||||||||
Tree | Dollar | Total | Tree | Dollar | Total | ||||||||||||||||||||
Store Count: | |||||||||||||||||||||||||
Beginning |
|
8,272 |
|
|
8,350 |
|
|
16,622 |
|
|
8,114 |
|
|
8,179 |
|
|
16,293 |
|
|||||||
New stores |
|
146 |
|
|
73 |
|
|
219 |
|
|
34 |
|
|
89 |
|
|
123 |
|
|||||||
Re-bannered stores (a) |
|
10 |
|
|
(5 |
) |
|
5 |
|
|
- |
|
|
1 |
|
|
1 |
|
|||||||
Closings |
|
(13 |
) |
|
(59 |
) |
|
(72 |
) |
|
(14 |
) |
|
(63 |
) |
|
(77 |
) |
|||||||
Ending |
|
8,415 |
|
|
8,359 |
|
|
16,774 |
|
|
8,134 |
|
|
8,206 |
|
|
16,340 |
|
|||||||
Selling Square Footage (in millions) |
|
73.1 |
|
|
63.7 |
|
|
136.8 |
|
|
70.5 |
|
|
61.6 |
|
|
132.1 |
|
|||||||
Growth Rate (Square Footage) |
|
3.7 |
% |
|
3.4 |
% |
|
3.6 |
% |
|
1.1 |
% |
|
4.1 |
% |
|
2.5 |
% |
|||||||
53 Weeks Ended | 52 Weeks Ended | ||||||||||||||||||||||||
|
|
||||||||||||||||||||||||
Dollar | Family | Dollar | Family | ||||||||||||||||||||||
Tree | Dollar | Total | Tree | Dollar | Total | ||||||||||||||||||||
Store Count: | |||||||||||||||||||||||||
Beginning |
|
8,134 |
|
|
8,206 |
|
|
16,340 |
|
|
8,061 |
|
|
8,016 |
|
|
16,077 |
|
|||||||
New stores |
|
333 |
|
|
308 |
|
|
641 |
|
|
131 |
|
|
333 |
|
|
464 |
|
|||||||
Re-bannered stores (a) |
|
15 |
|
|
(15 |
) |
|
- |
|
|
(5 |
) |
|
9 |
|
|
4 |
|
|||||||
Closings |
|
(67 |
) |
|
(140 |
) |
|
(207 |
) |
|
(53 |
) |
|
(152 |
) |
|
(205 |
) |
|||||||
Ending |
|
8,415 |
|
|
8,359 |
|
|
16,774 |
|
|
8,134 |
|
|
8,206 |
|
|
16,340 |
|
|||||||
Selling Square Footage (in millions) |
|
73.1 |
|
|
63.7 |
|
|
136.8 |
|
|
70.5 |
|
|
61.6 |
|
|
132.1 |
|
|||||||
Growth Rate (Square Footage) |
|
3.7 |
% |
|
3.4 |
% |
|
3.6 |
% |
|
1.1 |
% |
|
4.1 |
% |
|
2.5 |
% |
|||||||
(a) | Stores are included as re-banners when they close or open, respectively. | ||||||||||||||||||||||||
53 Weeks Ended | 52 Weeks Ended | ||||||||||||||||||||||||
|
|
||||||||||||||||||||||||
Dollar | Family | Dollar | Family | ||||||||||||||||||||||
Tree | Dollar | Total | Tree | Dollar | Total | ||||||||||||||||||||
Sales per Square Foot (b) |
$ |
234 |
|
$ |
220 |
|
$ |
227 |
|
$ |
220 |
|
$ |
214 |
|
$ |
217 |
|
|||||||
(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. |
|
|||||||||||||||||||||||||
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 gross profit; adjusted gross margin; 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 effective tax rate; adjusted diluted earnings per share; 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 |
||||||||||||||||||||||||
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. As a result of this portfolio optimization review, we plan to close 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. Additionally, we identified approximately 30 underperforming |
||||||||||||||||||||||||
3.) | In the fourth quarter of fiscal 2023, the Company performed its annual impairment testing of goodwill and nonamortizing intangible assets. The impairment test of nonamortizing intangible assets indicated that the carrying value of the Family Dollar trade name exceeded its estimated fair value resulting in the recognition of a |
||||||||||||||||||||||||
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. | |||||||||||||||||||||||||
Reconciliation of Adjusted Gross Profit | 14 Weeks Ended | 13 Weeks Ended | 53 Weeks Ended | 52 Weeks Ended | |||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||
Gross profit (GAAP) |
$ |
2,771.5 |
32.1 |
% |
$ |
2,385.5 |
30.9 |
% |
$ |
9,309.6 |
30.4 |
% |
$ |
8,921.9 |
31.5 |
% |
|||||||||
Add: Inventory markdowns - store closures |
|
80.6 |
0.9 |
% |
|
- |
0.0 |
% |
|
80.6 |
0.3 |
% |
|
- |
0.0 |
% |
|||||||||
Add: Distribution costs - store closures |
|
5.6 |
0.1 |
% |
|
- |
0.0 |
% |
|
5.6 |
0.0 |
% |
|
- |
0.0 |
% |
|||||||||
Adjusted gross profit (Non-GAAP) |
$ |
2,857.7 |
33.1 |
% |
$ |
2,385.5 |
30.9 |
% |
$ |
9,395.8 |
30.7 |
% |
$ |
8,921.9 |
31.5 |
% |
|||||||||
Reconciliation of Adjusted Gross Profit - Family Dollar Segment | 14 Weeks Ended | 13 Weeks Ended | 53 Weeks Ended | 52 Weeks Ended | |||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||
Gross profit (GAAP) |
$ |
838.3 |
22.8 |
% |
$ |
807.9 |
23.6 |
% |
$ |
3,300.7 |
23.9 |
% |
$ |
3,146.4 |
24.4 |
% |
|||||||||
Add: Inventory markdowns - store closures |
|
80.6 |
2.2 |
% |
|
- |
0.0 |
% |
|
80.6 |
0.6 |
% |
|
- |
0.0 |
% |
|||||||||
Add: Distribution costs - store closures |
|
5.6 |
0.2 |
% |
|
- |
0.0 |
% |
|
5.6 |
0.0 |
% |
|
- |
0.0 |
% |
|||||||||
Adjusted gross profit (Non-GAAP) |
$ |
924.5 |
25.2 |
% |
$ |
807.9 |
23.6 |
% |
$ |
3,386.9 |
24.5 |
% |
$ |
3,146.4 |
24.4 |
% |
|||||||||
Gross profit margin is calculated as gross profit (i.e., net sales less cost of sales) divided by net sales. |
|
|||||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||||||
(In millions, except per share data) | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
Reconciliation of Adjusted Selling, General and Administrative Expenses | 14 Weeks Ended | 13 Weeks Ended | 53 Weeks Ended | 52 Weeks Ended | |||||||||||||||||||
|
|
|
|
||||||||||||||||||||
Selling, general and administrative expenses (GAAP) |
$ |
4,669.5 |
54.0 |
% |
$ |
1,771.9 |
22.9 |
% |
$ |
10,213.6 |
33.4 |
% |
$ |
6,699.1 |
23.6 |
% |
|||||||
Deduct: |
|
1,069.0 |
12.4 |
% |
|
- |
0.0 |
% |
|
1,069.0 |
3.5 |
% |
|
- |
0.0 |
% |
|||||||
Deduct: Trade name intangible asset impairment |
|
950.0 |
11.0 |
% |
|
- |
0.0 |
% |
|
950.0 |
3.1 |
% |
|
- |
0.0 |
% |
|||||||
Deduct: Long-lived asset impairment |
|
503.9 |
5.8 |
% |
|
- |
0.0 |
% |
|
503.9 |
1.7 |
% |
|
- |
0.0 |
% |
|||||||
Deduct: Legal reserve |
|
26.7 |
0.3 |
% |
|
- |
0.0 |
% |
|
56.7 |
0.2 |
% |
|
- |
0.0 |
% |
|||||||
Deduct: Other consulting fees |
|
4.3 |
0.1 |
% |
|
- |
0.0 |
% |
|
4.3 |
0.0 |
% |
|
- |
0.0 |
% |
|||||||
Total adjustments |
|
2,553.9 |
29.6 |
% |
|
- |
0.0 |
% |
|
2,583.9 |
8.5 |
% |
|
- |
0.0 |
% |
|||||||
Adjusted selling, general and administrative expenses (Non-GAAP) |
$ |
2,115.6 |
24.4 |
% |
$ |
1,771.9 |
22.9 |
% |
$ |
7,629.7 |
24.9 |
% |
$ |
6,699.1 |
23.6 |
% |
|||||||
Reconciliation of Adjusted Selling, General and Administrative Expenses - Family Dollar Segment | 14 Weeks Ended | 13 Weeks Ended | 53 Weeks Ended | 52 Weeks Ended | |||||||||||||||||||
|
|
|
|
||||||||||||||||||||
Selling, general and administrative expenses (GAAP) |
$ |
3,460.2 |
94.0 |
% |
$ |
809.0 |
23.6 |
% |
$ |
5,975.6 |
43.2 |
% |
$ |
3,026.7 |
23.4 |
% |
|||||||
Deduct: |
|
1,069.0 |
29.1 |
% |
|
- |
0.0 |
% |
|
1,069.0 |
7.7 |
% |
|
- |
0.0 |
% |
|||||||
Deduct: Trade name intangible asset impairment |
|
950.0 |
25.8 |
% |
|
- |
0.0 |
% |
|
950.0 |
6.9 |
% |
|
- |
0.0 |
% |
|||||||
Deduct: Long-lived asset impairment |
|
493.1 |
13.4 |
% |
|
- |
0.0 |
% |
|
493.1 |
3.6 |
% |
|
- |
0.0 |
% |
|||||||
Deduct: Legal reserve |
|
26.7 |
0.7 |
% |
|
- |
0.0 |
% |
|
56.7 |
0.4 |
% |
|
- |
0.0 |
% |
|||||||
Total adjustments |
|
2,538.8 |
69.0 |
% |
|
- |
0.0 |
% |
|
2,568.8 |
18.6 |
% |
|
- |
0.0 |
% |
|||||||
Adjusted selling, general and administrative expenses (Non-GAAP) |
$ |
921.4 |
25.0 |
% |
$ |
809.0 |
23.6 |
% |
$ |
3,406.8 |
24.6 |
% |
$ |
3,026.7 |
23.4 |
% |
|||||||
Reconciliation of Adjusted Selling, General and Administrative Expenses - Dollar Tree Segment | 14 Weeks Ended | 13 Weeks Ended | 53 Weeks Ended | 52 Weeks Ended | |||||||||||||||||||
|
|
|
|
||||||||||||||||||||
Selling, general and administrative expenses (GAAP) |
$ |
1,070.6 |
21.6 |
% |
$ |
856.5 |
19.9 |
% |
$ |
3,730.2 |
22.2 |
% |
$ |
3,239.7 |
21.0 |
% |
|||||||
Deduct: Long-lived asset impairment |
|
10.8 |
0.2 |
% |
|
- |
0.0 |
% |
|
10.8 |
0.1 |
% |
|
- |
0.0 |
% |
|||||||
Total adjustments |
|
10.8 |
0.2 |
% |
|
- |
0.0 |
% |
|
10.8 |
0.1 |
% |
|
- |
0.0 |
% |
|||||||
Adjusted selling, general and administrative expenses (Non-GAAP) |
$ |
1,059.8 |
21.4 |
% |
$ |
856.5 |
19.9 |
% |
$ |
3,719.4 |
22.1 |
% |
$ |
3,239.7 |
21.0 |
% |
|||||||
|
|||||||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||||||||
(In millions, except per share data) | |||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
Reconciliation of Adjusted Operating Income | 14 Weeks Ended | 13 Weeks Ended | 53 Weeks Ended | 52 Weeks Ended | |||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||
Operating income (loss) (GAAP) |
$ |
(1,891.0 |
) |
(21.9 |
%) |
$ |
618.1 |
8.0 |
% |
$ |
(881.8 |
) |
(2.9 |
%) |
$ |
2,236.3 |
7.9 |
% |
|||||||
Gross profit adjustments: | |||||||||||||||||||||||||
Add: Inventory markdowns - store closures |
|
80.6 |
|
0.9 |
% |
|
- |
0.0 |
% |
|
80.6 |
|
0.3 |
% |
|
- |
0.0 |
% |
|||||||
Add: Distribution costs - store closures |
|
5.6 |
|
0.1 |
% |
|
- |
0.0 |
% |
|
5.6 |
|
0.0 |
% |
|
- |
0.0 |
% |
|||||||
SG&A adjustments: | |||||||||||||||||||||||||
Add: |
|
1,069.0 |
|
12.4 |
% |
|
- |
0.0 |
% |
|
1,069.0 |
|
3.5 |
% |
|
- |
0.0 |
% |
|||||||
Add: Trade name intangible asset impairment |
|
950.0 |
|
11.0 |
% |
|
- |
0.0 |
% |
|
950.0 |
|
3.1 |
% |
|
- |
0.0 |
% |
|||||||
Add: Long-lived asset impairment |
|
503.9 |
|
5.8 |
% |
|
- |
0.0 |
% |
|
503.9 |
|
1.6 |
% |
|
- |
0.0 |
% |
|||||||
Add: Legal reserve |
|
26.7 |
|
0.3 |
% |
|
- |
0.0 |
% |
|
56.7 |
|
0.2 |
% |
|
- |
0.0 |
% |
|||||||
Add: Other consulting fees |
|
4.3 |
|
0.1 |
% |
|
- |
0.0 |
% |
|
4.3 |
|
0.0 |
% |
|
- |
0.0 |
% |
|||||||
Total adjustments |
|
2,640.1 |
|
30.6 |
% |
|
- |
0.0 |
% |
|
2,670.1 |
|
8.7 |
% |
|
- |
0.0 |
% |
|||||||
Adjusted operating income (Non-GAAP) |
$ |
749.1 |
|
8.7 |
% |
$ |
618.1 |
8.0 |
% |
$ |
1,788.3 |
|
5.8 |
% |
$ |
2,236.3 |
7.9 |
% |
|||||||
Reconciliation of Adjusted Operating Income - Family Dollar Segment | 14 Weeks Ended | 13 Weeks Ended | 53 Weeks Ended | 52 Weeks Ended | |||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||
Operating income (loss) (GAAP) |
$ |
(2,617.8 |
) |
(71.2 |
%) |
$ |
1.4 |
0.0 |
% |
$ |
(2,663.5 |
) |
(19.3 |
%) |
$ |
127.5 |
1.0 |
% |
|||||||
Gross profit adjustments: | |||||||||||||||||||||||||
Add: Inventory markdowns - store closures |
|
80.6 |
|
2.2 |
% |
|
- |
0.0 |
% |
|
80.6 |
|
0.6 |
% |
|
- |
0.0 |
% |
|||||||
Add: Distribution costs - store closures |
|
5.6 |
|
0.2 |
% |
|
- |
0.0 |
% |
|
5.6 |
|
0.0 |
% |
|
- |
0.0 |
% |
|||||||
SG&A adjustments: | |||||||||||||||||||||||||
Add: |
|
1,069.0 |
|
29.1 |
% |
|
- |
0.0 |
% |
|
1,069.0 |
|
7.7 |
% |
|
- |
0.0 |
% |
|||||||
Add: Trade name intangible asset impairment |
|
950.0 |
|
25.8 |
% |
|
- |
0.0 |
% |
|
950.0 |
|
6.9 |
% |
|
- |
0.0 |
% |
|||||||
Add: Long-lived asset impairment |
|
493.1 |
|
13.4 |
% |
|
- |
0.0 |
% |
|
493.1 |
|
3.6 |
% |
|
- |
0.0 |
% |
|||||||
Add: Legal reserve |
|
26.7 |
|
0.7 |
% |
|
- |
0.0 |
% |
|
56.7 |
|
0.4 |
% |
|
- |
0.0 |
% |
|||||||
Total adjustments |
|
2,625.0 |
|
71.4 |
% |
|
- |
0.0 |
% |
|
2,655.0 |
|
19.2 |
% |
|
- |
0.0 |
% |
|||||||
Adjusted operating income (loss) (Non-GAAP) |
$ |
7.2 |
|
0.2 |
% |
$ |
1.4 |
0.0 |
% |
$ |
(8.5 |
) |
(0.1 |
%) |
$ |
127.5 |
1.0 |
% |
|||||||
|
|||||||||||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||||||||||||
(In millions, except per share data) | |||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||
Reconciliation of Adjusted Operating Income - Dollar Tree Segment | 14 Weeks Ended | 13 Weeks Ended | 53 Weeks Ended | 52 Weeks Ended | |||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||
Operating income (GAAP) |
$ |
862.6 |
|
17.4 |
% |
$ |
721.3 |
|
16.8 |
% |
$ |
2,278.8 |
|
13.6 |
% |
$ |
2,536.0 |
|
16.5 |
% |
|||||||||
SG&A adjustment: | |||||||||||||||||||||||||||||
Add: Long-lived asset impairment |
|
10.8 |
|
0.2 |
% |
|
- |
|
0.0 |
% |
|
10.8 |
|
0.1 |
% |
|
- |
|
0.0 |
% |
|||||||||
Total adjustments |
|
10.8 |
|
0.2 |
% |
|
- |
|
0.0 |
% |
|
10.8 |
|
0.1 |
% |
|
- |
|
0.0 |
% |
|||||||||
Adjusted operating income (Non-GAAP) |
$ |
873.4 |
|
17.6 |
% |
$ |
721.3 |
|
16.8 |
% |
$ |
2,289.6 |
|
13.7 |
% |
$ |
2,536.0 |
|
16.5 |
% |
|||||||||
Reconciliation of Adjusted Net Income | 14 Weeks Ended | 13 Weeks Ended | 53 Weeks Ended | 52 Weeks Ended | |||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||
Net income (loss) (GAAP) |
$ |
(1,709.8 |
) |
$ |
452.2 |
|
$ |
(998.4 |
) |
$ |
1,615.4 |
|
|||||||||||||||||
Gross profit adjustments: | |||||||||||||||||||||||||||||
Add: Inventory markdowns - store closures |
|
80.6 |
|
|
- |
|
|
80.6 |
|
|
- |
|
|||||||||||||||||
Add: Distribution costs - store closures |
|
5.6 |
|
|
- |
|
|
5.6 |
|
|
- |
|
|||||||||||||||||
SG&A adjustments: | |||||||||||||||||||||||||||||
Add: |
|
1,069.0 |
|
|
- |
|
|
1,069.0 |
|
|
- |
|
|||||||||||||||||
Add: Trade name intangible asset impairment |
|
950.0 |
|
|
- |
|
|
950.0 |
|
|
- |
|
|||||||||||||||||
Add: Long-lived asset impairment |
|
503.9 |
|
|
- |
|
|
503.9 |
|
|
- |
|
|||||||||||||||||
Add: Legal reserve |
|
26.7 |
|
|
- |
|
|
56.7 |
|
|
- |
|
|||||||||||||||||
Add: Other consulting fees |
|
4.3 |
|
|
- |
|
|
4.3 |
|
|
- |
|
|||||||||||||||||
Total adjustments |
|
2,640.1 |
|
|
- |
|
|
2,670.1 |
|
|
- |
|
|||||||||||||||||
Provision for income taxes on adjustments |
|
(374.6 |
) |
|
- |
|
|
(378.4 |
) |
|
- |
|
|||||||||||||||||
Adjusted net income (Non-GAAP) |
$ |
555.7 |
|
$ |
452.2 |
|
$ |
1,293.3 |
|
$ |
1,615.4 |
|
|||||||||||||||||
Reconciliation of Adjusted Effective Tax Rate | 14 Weeks Ended | 13 Weeks Ended | 53 Weeks Ended | 52 Weeks Ended | |||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||||
Effective tax rate (GAAP) |
|
10.8 |
% |
|
23.4 |
% |
|
(1.0 |
%) |
|
23.5 |
% |
|||||||||||||||||
Add: Tax impact of non-GAAP adjustments (c) |
|
12.3 |
% |
|
0.0 |
% |
|
24.1 |
% |
|
0.0 |
% |
|||||||||||||||||
Adjusted effective tax rate (Non-GAAP) |
|
23.1 |
% |
|
23.4 |
% |
|
23.1 |
% |
|
23.5 |
% |
|||||||||||||||||
(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. |
|
||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||
(In millions, except per share data) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Reconciliation of Adjusted Diluted Earnings Per Share |
14 Weeks Ended |
13 Weeks Ended |
53 Weeks Ended |
52 Weeks Ended |
||||||||||||
2024 |
2023 |
2024 |
2023 |
|||||||||||||
Diluted net income (loss) per share (GAAP) |
$ |
(7.85 |
) |
$ |
2.04 |
|
$ |
(4.55 |
) |
$ |
7.21 |
|
||||
Gross profit adjustments: | ||||||||||||||||
Add: Inventory markdowns - store closures |
|
0.37 |
|
|
- |
|
|
0.37 |
|
|
- |
|
||||
Add: Distribution costs - store closures |
|
0.03 |
|
|
- |
|
|
0.02 |
|
|
- |
|
||||
SG&A adjustments: | ||||||||||||||||
Add: |
|
4.91 |
|
|
- |
|
|
4.87 |
|
|
- |
|
||||
Add: Trade name intangible asset impairment |
|
4.36 |
|
|
- |
|
|
4.33 |
|
|
- |
|
||||
Add: Long-lived asset impairment |
|
2.31 |
|
|
- |
|
|
2.29 |
|
|
- |
|
||||
Add: Legal reserve |
|
0.12 |
|
|
- |
|
|
0.26 |
|
|
- |
|
||||
Add: Other consulting fees |
|
0.02 |
|
|
- |
|
|
0.02 |
|
|
- |
|
||||
Total adjustments |
|
12.12 |
|
|
- |
|
|
12.16 |
|
|
- |
|
||||
Provision for income taxes on adjustments |
|
(1.72 |
) |
|
- |
|
|
(1.72 |
) |
|
- |
|
||||
Adjusted diluted net income per share (Non-GAAP) |
$ |
2.55 |
|
$ |
2.04 |
|
$ |
5.89 |
|
$ |
7.21 |
|
||||
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow |
14 Weeks Ended |
13 Weeks Ended |
53 Weeks Ended |
52 Weeks Ended |
||||||||||||
2024 |
2023 |
2024 |
2023 |
|||||||||||||
Net cash provided by operating activities (GAAP) |
$ |
1,254.9 |
|
$ |
880.7 |
|
$ |
2,684.5 |
|
$ |
1,614.8 |
|
||||
Deduct: | ||||||||||||||||
Capital expenditures |
|
(784.1 |
) |
|
(328.0 |
) |
|
(2,101.3 |
) |
|
(1,248.8 |
) |
||||
Free cash flow (Non-GAAP) |
$ |
470.8 |
|
$ |
552.7 |
|
$ |
583.2 |
|
$ |
366.0 |
|
||||
Net cash used in investing activities (GAAP) (d) |
$ |
(785.3 |
) |
$ |
(327.9 |
) |
$ |
(2,107.6 |
) |
$ |
(1,253.8 |
) |
||||
Net cash used in financing activities (GAAP) |
|
(228.1 |
) |
|
(349.0 |
) |
|
(530.0 |
) |
|
(686.8 |
) |
||||
(d) Net cash used in investing activities includes capital expenditures, which is included in our computation of free cash flow. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240313982700/en/
Senior Vice President, Investor Relations
www.DollarTree.com
DLTR-E
Source: