What changed in this filing

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Item 1A. Risk Factors

2021-11-23 compared with 2021-08-26 · 31 added, 10 removed, 45 unchanged (48% of the section changed)

22 unchanged sentences

shipping needs during fiscal 2021.

Freight costs for fiscal 2021 are now expected to be $1.50 to $1.60 per diluted share higher than fiscal year 2020.

Freight costs for fiscal 2021 are now expected to be $2.00 per diluted share higher than fiscal year 2020.

Changes in import duties, import quotas and other trade sanctions could also increase our costs.

• Efficient operations and management .

Distribution centers and other aspects of our distribution network are difficult to operate efficiently, and we have experienced and could continue to experience a reduction in operating efficiency as a result of high turnover and challenges in attracting and retaining an adequate and reliable workforce.

Although we have begun offering sign-on bonuses, enhanced wages and other inducements in certain markets to address the shortage of labor at our distribution centers, such measures are expected to increase our costs and could have an adverse effect on our margins and profitability.

Distribution centers and other aspects of our distribution network are difficult to operate efficiently, and we have experienced and could continue to experience a reduction in operating efficiency resulting in delayed shipments of merchandise to our stores as a result of high turnover and challenges in attracting and retaining an adequate and reliable workforce.

Although we have offered sign-on bonuses, enhanced wages and other inducements in certain markets to address the shortage of labor at our distribution centers, such measures have increased our costs and are expected to continue to increase our costs, which could have an adverse effect on our margins and profitability.

There can be no assurances that such measures will be adequate to attract and retain the workforce necessary for the efficient operation of our distribution centers.

11 unchanged sentences

We also rely on third parties to deliver frozen and refrigerated product, as well as chocolate in the summer, to our Dollar Tree stores.

A disruption in our relationship with or in service levels from McLane Company, Inc.

or other providers could have a significant near-term impact on our operations.

We may not be successful in implementing important strategic initiatives, which may have an adverse impact on our business and financial results.

To the extent that supply chain disruptions and higher costs affect McLane Company, Inc.

or our other suppliers, we may be subject to delays or reductions in deliveries and higher costs for merchandise.

A substantial disruption in our relationship with or in service levels from McLane Company, Inc.

or other suppliers could have a significant near-term impact on our operations.

We may not be successful in implementing important strategic initiatives, which may have an adverse impact on our business and financial results, or in anticipating the impact of these initiatives.

We have adopted important strategic initiatives that are designed to create growth, improve our results of operations and drive long-term shareholder value, including:

• the testing and implementation of a multi-price initiative in Dollar Tree stores referred to as Dollar Tree Plus ;

• the addition of price points above $1 (such as $1.25) in all Dollar Tree stores;

• the expansion of a multi-price initiative in Dollar Tree stores referred to as Dollar Tree Plus ;

• the introduction of selected Dollar Tree merchandise into Family Dollar stores;

• the testing and roll-out of the Combo Store format that combines a Dollar Tree store and Family Dollar store in a single location;

• the roll-out of the Combo Store format that combines a Dollar Tree store and Family Dollar store in a single location;

• the renovation of Family Dollar stores to the H2 format;

1 unchanged sentence

• the continued integration of the operations of Family Dollar with Dollar Tree.

The implementation and timing of these strategic initiatives are subject to various risks and uncertainties, including consumer acceptance of new store concepts and merchandise offerings, construction and permitting delays relating to new and renovated stores, the success of our integration strategies, the availability of desirable real estate locations for lease at reasonable rates, the impact of the COVID-19 pandemic and other factors beyond our control.

In addition, several of these initiatives depend on the availability of adequate levels of the appropriate domestic and imported merchandise, our ability to execute on our plans and expectations with respect to those initiatives and the continued success of our integration of Family Dollar merchandising, supply chain and operations with those of Dollar Tree.

The implementation and timing of these strategic initiatives are subject to various risks and uncertainties, including the acceptance of the amount of price increases by customers and others as justified or reasonable;

customer acceptance of new store concepts and merchandise offerings;

construction and permitting delays relating to new and renovated stores;

the success of our integration strategies;

the availability of desirable real estate locations for lease at reasonable rates;

the impact of the COVID-19 pandemic;

and other factors beyond our control.

In addition, several of these initiatives depend on the timeliness, cost and availability of adequate levels of the appropriate domestic and imported merchandise, our ability to execute on our plans and expectations with respect to those initiatives and the continued success of our integration of Family Dollar merchandising, supply chain and operations with those of Dollar Tree.

To the extent that shipping delays, supply chain disruptions and other distribution logistics adversely affect the availability of merchandise necessary to implement our strategic initiatives, we may delay or reduce our planned rate of implementation of one or more of those initiatives.

The rollout of our initiative to add price points above $1 in Dollar Tree stores is subject to additional risks and uncertainties relating to, among other things, operational changes such as signage, advertising, and employee training, provisions in our leases and/or third-party waivers tied to single or $1 price points, and compliance with the terms of our leases and state and local consumer laws.

There can be no assurance that we will be able to implement important strategic initiatives in accordance with our expectations or that they will generate expected returns, which may result in an adverse impact on our business and financial results.

Our business or the value of our common stock could be negatively affected as a result of actions by activist shareholders.

We value constructive input from investors and regularly engage in dialogue with our shareholders regarding strategy and performance.

The Board of Directors and management team are committed to acting in the best interests of all of our shareholders.

There is no assurance that the actions taken by the Board of Directors and management in seeking to maintain constructive engagement with our shareholders will be successful.

Activist shareholders who disagree with our strategy or the way we are managed have sought to effect change, and may seek to effect change in the future, through various strategies that range from private engagement to publicity campaigns, proxy contests, efforts to force transactions not supported by the Board of Directors and litigation.

Responding to these actions may be costly and time-consuming, disrupt our operations, divert the attention of our Board of Directors, management and employees, and interfere with our ability to execute our strategic plan and attract and retain qualified executive leadership.

A contested election, for example, could also require us to incur substantial legal and public relations fees and proxy solicitation expenses.

The perceived uncertainty as to our future direction resulting from activist strategies could also affect the market price and volatility of our common stock.

On November 12, 2021, one of our investors filed a Schedule 13D with the SEC, reporting that it was the owner of approximately 5.7% of our outstanding common stock (in addition to other economic exposure through derivative instruments), and that it intended to have communications with members of our management, our Board of Directors, shareholders and other persons regarding our business, operations, strategies, governance and the composition of our executive suite and our Board of Directors and possibilities for changes thereto.

Although we may engage in discussions with this investor as we do others, there can be no assurance as to the outcome of any conversations that may take place.

In addition, actions of activist shareholders may cause significant fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.

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 1A. Risk Factors