Company Announcements

• Review of Strategic Alternatives Concludes with Agreement to Sell Family Dollar
• Family Dollar Fourth Quarter and Full-Year Fiscal 2024 Results Are Reported as Discontinued Operations
• Dollar Tree Same-Store Net Sales +2.0% on +0.7% Traffic and +1.3% Ticket
• Diluted Loss per Share of $17.17 and Diluted Earnings per Share (EPS) from Continuing Operations of $1.86
• Adjusted Diluted EPS of $2.29, Including $2.11 from Continuing Operations and $0.18 from Discontinued Operations
• Full-Year Fiscal 2025 Outlook Ranges of $18.5 to $19.1 Billion for Net Sales and $5.00 to $5.50 for Adjusted EPS from Continuing Operations, Including $0.30 to $0.35 Negative Impact from Having Only Half-Year Benefit of Family Dollar TSA.
• First Quarter Fiscal 2025 Outlook Ranges of $4.5 to $4.6 Billion for Net Sales and $1.10 to $1.25 for Adjusted EPS from Continuing Operations, Including Full Shared-Service Expense Burden and No Benefit from Family Dollar TSA

CHESAPEAKE, Va.--(BUSINESS WIRE)--Mar. 26, 2025-- Dollar Tree, Inc. (NASDAQ: DLTR) today reported financial results for its fourth quarter ended February 1, 2025.

“In the fourth quarter, our team was focused on successfully closing out the year, bringing the strategic review to a favorable conclusion, and setting Dollar Tree on a path to realize its full potential to create long-term value for our associates, customers, and shareholders,” said Mike Creedon, Chief Executive Officer. “We finished 2024 on a high note with strong execution at Dollar Tree as growing customer acceptance of our expanded assortment drove sales momentum. With the sale of Family Dollar set to close later this year, we will be able to fully dedicate ourselves to Dollar Tree’s long-term growth, profitability, and returns on capital.”

Sale of Family Dollar

After a thorough review of strategic alternatives, on March 25, 2025, the Company entered into a definitive agreement to sell the Family Dollar business to Brigade and Macellum for a purchase consideration of $1,007.0 million, subject to a number of adjustments, including with respect to working capital and net indebtedness. The closing of the transaction is subject to satisfaction of customary closing conditions, including receipt of US antitrust approval. Net proceeds are estimated to total approximately $804 million. Additionally, we expect the economic impact of tax benefits from losses on the sale to be approximately $350 million. The deal is expected to close in approximately 90 days with the Family Dollar business remaining headquartered in Chesapeake, Virginia.

In the fourth quarter of 2024, the Company determined that the assets of the Family Dollar business met the criteria for classification as held for sale. As such, the results of Family Dollar are presented in Dollar Tree Inc.’s financial results as discontinued operations in the Consolidated Financial Statements for all periods presented and prior periods have been adjusted to conform to the current presentation.

Unless otherwise noted, all amounts and disclosures included in this press release reflect only continuing operations. For additional information, please refer to Note 15 in our Annual Report on Form 10-K to be filed today, March 26, 2025.

Additional Business Highlights

• Opened 33 new Dollar Tree stores, bringing full-year openings to 525
• Finished fiscal 2024 with approximately 2,900 Dollar Tree 3.0 multi-price format stores, including 2,600 conversions and 300 new stores.
• For the full year, generated $2.2 billion of net cash provided by operating activities of continuing operations and $893 million of free cash flow from continuing operations

Fourth Quarter Results

Results for the fourth quarter, ended February 1, 2025, are reported on a continuing operations basis and reflect the Family Dollar segment as discontinued operations. Continuing operations reflect the results of the Dollar Tree segment and corporate, support, and other.

Also, unless otherwise noted, all comparisons are to the prior year’s fourth quarter, ended February 3, 2024, which also have been adjusted to reflect the Family Dollar segment as discontinued operations. Finally, the prior year’s fourth quarter ended February 3, 2024, included an extra week which affects year-over-year comparisons.

Net sales increased 0.7% to $5.0 billion. Same-store net sales increased 2.0%, driven by a 0.7% increase in traffic and a 1.3% increase in average ticket.

Gross profit declined 2.8% to $1.9 billion and gross margin contracted 130 basis points to 37.6%. The decline in gross margin expansion was driven primarily by the loss of leverage from the extra week of sales in 2023, lower initial mark-on, and higher shrink, distribution, and markdown cost, partially offset by lower freight. Freight costs in the quarter include $25.0 million in accrual for duties related to an anti-dumping case for product imported in fiscal 2024.

Selling, general and administrative expenses increased 260 basis points to 27.0% of total revenue. The increase was driven primarily by software impairments and related contract termination costs in connection with the decision to sell the Family Dollar business, and higher expenses across depreciation, stock compensation, professional fees, utilities costs, and the loss of leverage from the extra week of sales in 2023. The increases were partially offset by lower general liability claim adjustments.

On an adjusted basis, which does not include software write-off, stock compensation, and professional fees, selling, general and administrative expenses increased 100 basis points to 25.1% of total revenue.

Operating income decreased 26.5% to $533.6 million and operating margin contracted 390 basis points to 10.7%. Adjusted operating income decreased 15.2% to $627.8 million and adjusted operating margin contracted 230 basis points to 12.6%.

The Company’s effective tax rate was 25.9% compared to 23.7%. Adjusted effective tax rate was 24.8% compared to 23.8%.

Income from continuing operations was $400.2 million and diluted earnings per share from continuing operations was $1.86. Adjusted net income was $454.8 million and adjusted diluted EPS was $2.11.

Year-to-Date Results

Results for the 52 weeks ended February 1, 2025, are reported on a continuing operations basis and reflect the Family Dollar segment as discontinued operations. Continuing operations reflect the results of our Dollar Tree segment and corporate, support, and other.

Also, unless otherwise noted, all comparisons are to the prior 53 weeks ended February 3, 2024, which also reflect the Family Dollar segment as discontinued operations.

Net sales increased 4.7% to $17.6 billion. Dollar Tree’s same-store sales increased 1.8%, driven by a 1.6% increase in traffic and a 0.1% increase in average ticket.

Gross profit increased 4.5% to $6.3 billion and gross margin was flat at 35.8%.

Selling, general and administrative expenses were 27.5% of total revenue, compared to 25.3%. On a non-GAAP basis, selling, general and administrative expenses were 26.9% of total revenue, compared to 25.2%.

Operating income decreased 17.6% to $1.5 billion and operating income margin decreased 230 basis points to 8.3%. Adjusted operating income decreased 12.7% to $1.6 billion and adjusted operating income margin decreased 180 basis points to 8.9%.

The Company’s effective tax rate was 24.7% compared to 23.8%. Adjusted effective tax rate was 24.2% compared to 23.8%.

Income from continuing operations was $1.0 billion and diluted earnings per share from continuing operations was $4.83. Adjusted income from continuing operations was $1.1 billion and adjusted diluted earnings per share from continuing operations was $5.10.

The Company repurchased 3.3 million shares for $403.6 million, including applicable excise tax.

On March 21, 2025, the Company entered into a new $1.5 billion Revolving Credit Facility, with JPMorgan Chase Bank, N.A., as agent, extending its previous $1.5 billion credit facility which was scheduled to expire in December 2026. Additionally, the Company entered into a $1.0 billion 364-Day Revolving Credit Facility ahead of its 4.00% Senior Notes due May 2025.

Fiscal 2025 Outlook

The Company is offering its full-year fiscal 2025 outlook on a continuing operations basis, reflecting the operations of our Dollar Tree segment, which includes corporate, support, and other. A reclassification of 2024 results into continuing, discontinued, and consolidated operations is provided in the supplemental schedules below.

The Company expects its full-year fiscal 2025 net sales from continuing operations to be in the range of $18.5 billion to $19.1 billion, based on comparable store net sales growth in the range of 3% to 5%.

Our outlook for adjusted diluted EPS from continuing operations includes SG&A costs associated with shared services that are provided to the Family Dollar business. These costs will be incurred for the entirety of fiscal year 2025. Under a Transition Services Agreement (TSA) that would begin with the anticipated closing of the sale in June 2025, the Family Dollar buyer will reimburse the Company for the cost of providing these services. Because Dollar Tree will bear the full year of the costs to support Family Dollar but only expects to receive offsetting reimbursement income in the second half of the year, the Company’s earnings full-year earnings will be negatively impacted by approximately $0.30 to $0.35, with that impact concentrated in the first two quarters of the fiscal year.

Adjusted diluted EPS from continuing operations is expected to range from $5.00 to $5.50.

First Quarter 2025 Outlook

The Company expects net sales from continuing operations for the first quarter will range from $4.5 billion to $4.6 billion, based on comparable store net sales growth in the range of 3% to 5%.

Adjusted diluted EPS for the first quarter 2025 is estimated to be in the range of $1.10 to $1.25, including the full burden of the Company’s shared services expense, with no benefit from the Family Dollar TSA, which is expected to commence with the close of the transaction.

While share repurchases are not included in the outlook, as of February 1, 2025 the Company has approximately $952 million remaining under its $2.5 billion share repurchase authorization, $1.3 billion of cash and cash equivalents, no borrowings under our revolver and no commercial paper outstanding.

Conference Call Information

On Wednesday, March 26, 2025, 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 13751721. A webcast of the call is also accessible through the Investor Relations portion of the Company’s website.

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.

Dollar Tree, a Fortune 200 Company, operated 16,500 stores across 48 states and five Canadian provinces as of February 1, 2025. 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; and adjusted effective tax rate, in each case with respect to our continuing operations, discontinued operations, consolidated operations and segments; 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 2025, including without limitation our expectations regarding net sales, comparable store sales and adjusted diluted earnings per share for the first fiscal quarter and full fiscal year 2025, and various factors that are expected to impact our quarterly and annual results of operations for fiscal 2025; 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. Our forward-looking statements also include statements regarding our pending sale of Family Dollar, which is subject to closing conditions and a number of adjustments to the purchase price, and which may not be completed in a timely fashion or at all, disrupt our business operations, be more difficult or costly than expected or fail to achieve the anticipated benefits. These statements are subject to risks and uncertainties. The following risks, among others, could have a material adverse impact on our sales, costs, profitability, financial performance or implementation of strategic initiatives: cost pressures from increases in merchandise, shipping, freight and fuel costs, wage and benefit and other operating costs; the imposition of duties, tariffs or other measures that create barriers or restrictions on trade, including anti-dumping or countervailing duty orders or other trade-related sanctions, and any retaliatory counter measures; risks associated with our merchandise supply chain and distribution network; increased competition from other retailers including online retailers; our product assortment and pricing; quality or safety concerns about our merchandise; product recalls; inflation or other changes in economic conditions or consumer spending habits; our ability to increase sales in existing stores and to expand our square footage profitably; seasonality; our ability to implement and anticipate the impact of important strategic initiatives; risks related to theft, asset loss and the security of our facilities; our ability to attract and retain qualified associates and key personnel; our reliance on third parties; our ability to access credit or capital markets, a downgrade of our credit ratings and/or increases in interest rates; any material failure, inadequacy, interruption or security failure of our computer and technology systems, including because of a cyberattack; operational disruptions or data theft due to potential unauthorized access to our systems; impairments of goodwill and other long-lived assets; the impact or legal proceedings, regulatory enforcement matters and our ability to comply with applicable laws; environmental, social and governance matters; changes to accounting standards, estimates or assumptions or in applicable laws; and geopolitical tensions, international disputes or conflicts, military confrontation, economic sanctions, piracy, acts of terrorism or natural or man-made disasters. For additional 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.