What changed in this filing

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Item 1. Financial Statements

2021-11-23 compared with 2021-08-26 · 48 added, 51 removed, 307 unchanged (24% of the section changed)

3 unchanged sentences

13 Weeks Ended 39 Weeks Ended

July 31, August 1, July 31, August 1,

October 30, October 31, October 30, October 31,

(in millions, except per share data) 2021 2020 2021 2020

16 unchanged sentences

13 Weeks Ended 39 Weeks Ended

July 31, August 1, July 31, August 1,

October 30, October 31, October 30, October 31,

(in millions) 2021 2020 2021 2020

5 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions) July 31, 2021 January 30, 2021 August 1, 2020

(in millions) October 30, 2021 January 30, 2021 October 31, 2020

Current assets:

34 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

13 Weeks Ended July 31, 2021

13 Weeks Ended October 30, 2021

(in millions) Common

5 unchanged sentences

Earnings Shareholders'

Balance at May 1, 2021 231.8 $ 2.3 $ 1,885.0 $ ( 30.2 ) $ 5,554.2 $ 7,411.3

Balance at July 31, 2021 224.9 $ 2.2 $ 1,204.9 $ ( 32.0 ) $ 5,836.6 $ 7,011.7

Net income — — — — 216.8 216.8

Total other comprehensive loss — — — ( 1.8 ) — ( 1.8 )

Total other comprehensive income — — — 0.7 — 0.7

Issuance of stock under Employee Stock

Purchase Plan — — 2.4 — — 2.4

Exercise of stock options — — 0.5 — — 0.5

Stock-based compensation, net — — 12.8 — — 12.8

Repurchase of stock ( 7.0 ) ( 0.1 ) ( 699.9 ) — — ( 700.0 )

Balance at July 31, 2021 224.9 $ 2.2 $ 1,204.9 $ ( 32.0 ) $ 5,836.6 $ 7,011.7

26 Weeks Ended July 31, 2021

Balance at October 30, 2021 224.9 $ 2.2 $ 1,220.1 $ ( 31.3 ) $ 6,053.4 $ 7,244.4

39 Weeks Ended October 30, 2021

(in millions) Common

13 unchanged sentences

Repurchase of stock ( 9.2 ) ( 0.1 ) ( 949.9 ) — — ( 950.0 )

Balance at July 31, 2021 224.9 $ 2.2 $ 1,204.9 $ ( 32.0 ) $ 5,836.6 $ 7,011.7

Balance at October 30, 2021 224.9 $ 2.2 $ 1,220.1 $ ( 31.3 ) $ 6,053.4 $ 7,244.4

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (cont.)

13 Weeks Ended August 1, 2020

13 Weeks Ended October 31, 2020

(in millions) Common

5 unchanged sentences

Earnings Shareholders'

Balance at May 2, 2020 237.2 $ 2.4 $ 2,480.6 $ ( 47.8 ) $ 4,085.4 $ 6,520.6

Balance at August 1, 2020 237.3 $ 2.4 $ 2,505.5 $ ( 41.2 ) $ 4,346.9 $ 6,813.6

Net income — — — — 330.0 330.0

3 unchanged sentences

Stock-based compensation, net — — 14.4 — — 14.4

Balance at August 1, 2020 237.3 $ 2.4 $ 2,505.5 $ ( 41.2 ) $ 4,346.9 $ 6,813.6

26 Weeks Ended August 1, 2020

Repurchase of stock ( 2.1 ) — ( 200.0 ) — — ( 200.0 )

Balance at October 31, 2020 235.2 $ 2.4 $ 2,322.4 $ ( 40.6 ) $ 4,676.9 $ 6,961.1

39 Weeks Ended October 31, 2020

(in millions) Common

12 unchanged sentences

Stock-based compensation, net 0.4 — 53.7 — — 53.7

Balance at August 1, 2020 237.3 $ 2.4 $ 2,505.5 $ ( 41.2 ) $ 4,346.9 $ 6,813.6

Repurchase of stock ( 2.1 ) — ( 200.0 ) — — ( 200.0 )

Balance at October 31, 2020 235.2 $ 2.4 $ 2,322.4 $ ( 40.6 ) $ 4,676.9 $ 6,961.1

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

39 Weeks Ended

July 31, August 1,

October 30, October 31,

(in millions) 2021 2020

21 unchanged sentences

Payments for repurchase of stock ( 950.0 ) ( 194.2 )

Net cash provided by (used in) financing activities ( 980.8 ) 245.4

Net cash used in financing activities ( 981.6 ) ( 446.7 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash 0.4 ( 0.3 )

19 unchanged sentences

The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the year ended January 30, 2021.

The results of operations for the 13 and 26 weeks ended July 31, 2021 are not necessarily indicative of the results to be expected for the entire fiscal year ending January 29, 2022.

In our opinion, the unaudited condensed consolidated financial statements included herein contain all adjustments (including those of a normal recurring nature) considered necessary for a fair presentation of our financial position as of July 31, 2021 and August 1, 2020 and the results of our operations and cash flows for the periods presented.

The results of operations for the 13 and 39 weeks ended October 30, 2021 are not necessarily indicative of the results to be expected for the entire fiscal year ending January 29, 2022.

In our opinion, the unaudited condensed consolidated financial statements included herein contain all adjustments (including those of a normal recurring nature) considered necessary for a fair presentation of our financial position as of October 30, 2021 and October 31, 2020 and the results of our operations and cash flows for the periods presented.

The January 30, 2021 balance sheet information was derived from the audited consolidated financial statements as of that date.

2 unchanged sentences

Purchase Obligations

At July 31, 2021, we have commitments totaling $ 274.0 million related to agreements for ocean shipping contracts.

At October 30, 2021, we have commitments totaling $ 253.8 million related to agreements for ocean shipping contracts.

Contingencies

12 unchanged sentences

The Food and Drug Administration (“FDA”) has alleged that we improperly sold certain topically applied, over the counter (“OTC”) products manufactured by certain Chinese factories that were on an import “alert” restriction issued by the FDA.

We responded to the FDA by proposing enhanced procedures and processes for any OTC products we import from China.

Actual or threatened California state court lawsuits have been filed against Dollar Tree and Family Dollar for similar employment-related claims brought under Private Attorney General Act (“PAGA”).

These cases may allege violations such as failure to provide employees with compliant rest and meal breaks, suitable seating and overtime pay, reimburse business expenses, pay minimum wages for all time worked, provide accurate wage statements, and timely pay wages as well as other potential labor code violations.

Four lawsuits are pending against us and our vendors alleging that personal talc powder products caused cancer.

We responded to the FDA by proposing and implementing enhanced procedures and processes for any OTC products we import from China.

Actual or threatened California state court lawsuits have been filed against Dollar Tree and Family Dollar for similar employment-related claims brought under the Private Attorney General Act (“PAGA”).

Three lawsuits are pending against us and our vendors alleging that personal talc powder products caused cancer.

We do not believe the products we sold caused the illnesses.

Our past talc lawsuits have been resolved without material loss to the company but no assurance can be given as to the outcome of pending or future cases.

Although we have indemnification rights against our vendors,

it is uncertain whether the vendors will have the financial ability to carry out their obligations.

Our past talc lawsuits have been resolved without material loss to the company but

no assurance can be given as to the outcome of pending or future cases.

Although we have indemnification rights against our vendors, it is uncertain whether the vendors will have the financial ability to carry out their obligations.

It is also uncertain whether our insurers will deny coverage under our various policies.

1 unchanged sentence

In December 2020, a former store manager brought a class action in California state court alleging we failed to reimburse employees for business expenses and in so failing, engaged in unfair competition.

The case has been resolved on a single plaintiff basis.

The case has been resolved.

Family Dollar Active Matters

1 unchanged sentence

The legal claims include New York consumer protection laws, negligent misrepresentations, breach of warranties, fraud and unjust enrichment.

In January and April 2021, state-wide consumer class actions were filed against us by the same law firm in Georgia and Alabama, respectively, for breach of warranty based on the allegation that the coffee we sold was mislabeled because the canisters did not contain enough coffee to make the number of cups of coffee stated on the label.

In January, April, and September 2021, state-wide consumer class actions were filed against us by the same law firm in Georgia and Alabama, respectively, for breach of warranty based on the allegation that the coffee we sold was mislabeled because the canisters did not contain enough coffee to make the number of cups of coffee stated on the label.

Please see the description above for talc and PAGA lawsuits against Family Dollar.

9 unchanged sentences

that is, the assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (e.g., when there is evidence of impairment).

We did not record any significant impairment charges during the 13 or 26 weeks ended July 31, 2021 and August 1, 2020.

We did not record any significant impairment charges during the 13 or 39 weeks ended October 30, 2021 and October 31, 2020.

Fair Value of Financial Instruments

1 unchanged sentence

The aggregate fair values and carrying values of our long-term borrowings were as follows:

July 31, 2021 January 30, 2021 August 1, 2020

October 30, 2021 January 30, 2021 October 31, 2020

(in millions) Fair Value Carrying Value Fair Value Carrying Value Fair Value Carrying Value

5 unchanged sentences

13 Weeks Ended 39 Weeks Ended

July 31, August 1, July 31, August 1,

October 30, October 31, October 30, October 31,

(in millions, except per share data) 2021 2020 2021 2020

11 unchanged sentences

Diluted net income per share $ 0.96 $ 1.39 $ 3.80 $ 3.53

For the 13 and 26 weeks ended July 31, 2021 and August 1, 2020, substantially all of the stock options outstanding were included in the calculation of the weighted average number of shares and dilutive potential shares outstanding.

For the 13 and 39 weeks ended October 30, 2021 and October 31, 2020, substantially all of the stock options outstanding were included in the calculation of the weighted average number of shares and dilutive potential shares outstanding.

Note 5 - Stock-Based Compensation

For a discussion of our stock-based compensation plans, refer to “Note 11 - Stock-Based Compensation Plans” of our Annual Report on Form 10-K for the year ended January 30, 2021.

Stock-based compensation expense was $ 49.6 million and $ 55.7 million during the 26 weeks ended July 31, 2021 and August 1, 2020, respectively.

Stock-based compensation expense was $ 63.1 million and $ 70.5 million during the 39 weeks ended October 30, 2021 and October 31, 2020, respectively.

Restricted Stock

3 unchanged sentences

Service-Based RSUs

The following table summarizes the status of service-based RSUs as of July 31, 2021 and changes during the 26 weeks then ended:

The following table summarizes the status of service-based RSUs as of October 30, 2021 and changes during the 39 weeks then ended:

Number of Shares Weighted Average

3 unchanged sentences

Forfeited ( 114,836 ) 92.57

Nonvested at July 31, 2021 1,222,047 $ 93.88

The following table summarizes the status of PSUs as of July 31, 2021 and changes during the 26 weeks then ended:

Nonvested at October 30, 2021 1,177,297 $ 93.86

The following table summarizes the status of PSUs as of October 30, 2021 and changes during the 39 weeks then ended:

Number of Shares Weighted Average

3 unchanged sentences

Forfeited ( 42,592 ) 95.66

Nonvested at July 31, 2021 621,602 $ 91.81

Nonvested at October 30, 2021 584,972 $ 91.86

Note 6 - Shareholders’ Equity

We repurchased 7,006,326 and 9,156,898 shares of common stock on the open market for approximately $ 700.0 million and $ 950.0 million during the 13 and 26 weeks ended July 31, 2021, respectively.

Approximately $ 2.5 million in share repurchases had not settled as of July 31, 2021.

This amount was accrued and is reflected in “Other current liabilities” within the accompanying unaudited condensed consolidated balance sheet as of July 31, 2021.

We did not repurchase any shares of common stock in the 13 and 26 weeks ended August 1, 2020.

As of July 31, 2021, we have $ 1.45 billion remaining under Board repurchase authorization.

We did not repurchase any shares of common stock on the open market during the 13 weeks ended October 30, 2021.

During the 39 weeks ended October 30, 2021, we repurchased 9,156,898 shares of common stock on the open market for approximately $ 950.0 million.

We repurchased 2,154,304 shares of common stock on the open market for approximately $ 200.0 million during the 13 and 39 weeks ended October 31, 2020.

Approximately $ 5.8 million in share repurchases had not settled as of October 31, 2020.

This amount was accrued and is reflected in “Other current liabilities” within the accompanying unaudited condensed consolidated balance sheet as of October 31, 2020.

During the 13 weeks ended October 30, 2021, the Board increased our share repurchase authorization by $ 1.05 billion to an aggregate amount of $ 2.5 billion, including $ 1.45 billion available for repurchases under the Board’s previous repurchase authorization approved on March 2, 2021.

Note 7 - Segments and Disaggregated Revenue

16 unchanged sentences

13 Weeks Ended 39 Weeks Ended

July 31, August 1, July 31, August 1,

October 30, October 31, October 30, October 31,

(in millions) 2021 2020 2021 2020

3 unchanged sentences

Consolidated Net sales $ 6,415.4 $ 6,176.7 $ 19,232.4 $ 18,741.1

13 Weeks Ended 26 Weeks Ended

July 31, August 1, July 31, August 1,

(in millions) 2021 2020 2021 2020

Condensed Consolidated Income Statement Data:

Gross profit:

10 unchanged sentences

Income before income taxes $ 276.9 $ 427.3 $ 1,133.0 $ 1,092.4

July 31, January 30, August 1,

October 30, January 30, October 31,

(in millions) 2021 2021 2020

11 unchanged sentences

13 Weeks Ended 39 Weeks Ended

July 31, August 1, July 31, August 1,

October 30, October 31, October 30, October 31,

(in millions) 2021 2020 2021 2020

13 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements