What changed in this filing

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Item 1. Financial Statements

2022-08-25 compared with 2022-05-26 · 92 added, 48 removed, 302 unchanged (32% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED INCOME STATEMENTS

13 Weeks Ended

April 30, May 1,

13 Weeks Ended 26 Weeks Ended

July 30, July 31, July 30, July 31,

(in millions, except per share data) 2022 2021 2022 2021

6 unchanged sentences

Interest expense, net 30.6 33.0 64.6 66.0

Other expense, net 0.1 — 0.1 —

Income before income taxes 474.7 369.2 1,172.2 856.1

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

13 Weeks Ended

April 30, May 1,

13 Weeks Ended 26 Weeks Ended

July 30, July 31, July 30, July 31,

(in millions) 2022 2021 2022 2021

5 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions) April 30, 2022 January 29, 2022 May 1, 2021

(in millions) July 30, 2022 January 29, 2022 July 31, 2021

Current assets:

33 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

13 Weeks Ended April 30, 2022

13 Weeks Ended July 30, 2022

(in millions) Common

5 unchanged sentences

Earnings Shareholders'

Balance at April 30, 2022 225.5 $ 2.2 $ 1,230.6 $ ( 35.3 ) $ 7,044.0 $ 8,241.5

Net income — — — — 359.9 359.9

Total other comprehensive loss — — — ( 1.0 ) — ( 1.0 )

Issuance of stock under Employee Stock

Purchase Plan — — 1.9 — — 1.9

Stock-based compensation, net 0.1 — 30.0 — — 30.0

Repurchase of stock ( 1.7 ) — ( 235.8 ) — — ( 235.8 )

Balance at July 30, 2022 223.9 $ 2.2 $ 1,026.7 $ ( 36.3 ) $ 7,403.9 $ 8,396.5

26 Weeks Ended July 30, 2022

(in millions) Common

Shares Common

Stock Additional

Capital Accumulated

Comprehensive

Loss Retained

Earnings Shareholders'

Balance at January 29, 2022 225.1 $ 2.2 $ 1,243.9 $ ( 35.2 ) $ 6,507.6 $ 7,718.5

5 unchanged sentences

Repurchase of stock ( 1.8 ) — ( 250.0 ) — — ( 250.0 )

Balance at April 30, 2022 225.5 $ 2.2 $ 1,230.6 $ ( 35.3 ) $ 7,044.0 $ 8,241.5

13 Weeks Ended May 1, 2021

Balance at July 30, 2022 223.9 $ 2.2 $ 1,026.7 $ ( 36.3 ) $ 7,403.9 $ 8,396.5

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

DOLLAR TREE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (cont.)

13 Weeks Ended July 31, 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

Net income — — — — 282.4 282.4

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

Issuance of stock under Employee Stock

Purchase Plan — — 2.1 — — 2.1

Exercise of stock options — — 0.5 — — 0.5

Stock-based compensation, net 0.1 — 17.2 — — 17.2

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

(in millions) Common

Shares Common

Stock Additional

Capital Accumulated

Comprehensive

Loss Retained

Earnings Shareholders'

Balance at January 30, 2021 233.4 $ 2.3 $ 2,138.5 $ ( 35.2 ) $ 5,179.7 $ 7,285.3

6 unchanged sentences

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

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

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

26 Weeks Ended

April 30, May 1,

July 30, July 31,

(in millions) 2022 2021

12 unchanged sentences

Proceeds from governmental grant — 2.3

Payments for fixed asset disposition ( 2.9 ) ( 0.2 )

Proceeds from (payments for) fixed asset disposition ( 3.8 ) 0.2

Net cash used in investing activities ( 533.4 ) ( 451.5 )

5 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents and restricted cash 0.2 0.3

Net increase in cash, cash equivalents and restricted cash 233.6 57.2

Net decrease in cash, cash equivalents and restricted cash ( 295.9 ) ( 695.9 )

Cash, cash equivalents and restricted cash at beginning of period 1,038.3 1,463.6

17 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 29, 2022.

The results of operations for the 13 weeks ended April 30, 2022 are not necessarily indicative of the results to be expected for the entire fiscal year ending January 28, 2023.

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 April 30, 2022 and May 1, 2021 and the results of our operations and cash flows for the periods presented.

The results of operations for the 13 and 26 weeks ended July 30, 2022 are not necessarily indicative of the results to be expected for the entire fiscal year ending January 28, 2023.

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 30, 2022 and July 31, 2021 and the results of our operations and cash flows for the periods presented.

The January 29, 2022 balance sheet information was derived from the audited consolidated financial statements as of that date.

3 unchanged sentences

We do not believe that any of these matters will, individually or in the aggregate, have a material effect on our business or financial condition.

We cannot give assurance, however, that one or more of these matters will not have a material effect on our results of operations for the quarter or year in which they are resolved.

We cannot give assurance, however, that one or more of these matters will not have a material effect on our results of operations for the quarter or year in which they are reserved or resolved.

We assess our legal proceedings monthly and reserves are established if a loss is probable and the amount of such loss can be reasonably estimated.

8 unchanged sentences

We believe we have made significant improvements in our processes, and the FDA has asked us to make certain additional improvements, which we are addressing.

From time to time, the U.S.

Department of Labor’s Occupational Safety and Health Administration (“OSHA”) has found violations of OSHA regulations at Dollar Tree stores and Family Dollar stores and assessed penalties relating to the violations.

For those periods in which this occurs, pending resolution of the matters, we record the associated estimated liabilities in the financial statements.

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”).

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 off-the-clock and potential labor code violations.

Three personal injury lawsuits are pending against Dollar Tree and one against Family Dollar alleging that certain talc products that were sold in the past caused cancer, one of which is set for trial this year.

Five personal injury lawsuits are pending against Dollar Tree and two against Family Dollar alleging that certain talc products that were sold in the past caused cancer, one of which is set for trial this year.

Although we have been able to resolve previous talc lawsuits against us without material loss to the company, given the inherent uncertainties of litigation there can be no assurances regarding the outcome of pending or future cases.

Future costs to litigate these cases are not known but may be material, and it is uncertain whether our costs will be covered by insurance.

Future costs to litigate these cases are not known but may be material, and it is uncertain whether

our costs will be covered by insurance.

In addition, although we have indemnification rights against our vendors in several of these cases, it is uncertain whether the vendors will have the financial ability to carry out their obligations.

2 unchanged sentences

In connection therewith, we initiated a voluntary retail-level product recall of FDA and U.S.

Department of Agriculture-regulated products stored and shipped from DC 202 from January 1, 2021 through February 18, 2022 (the “Recall”), closed DC 202 for extensive cleaning, temporarily closed the affected stores to permit the removal and destruction of inventory subject to the Recall, ceased sales of relevant inventory subject to the Recall, ceased the shipment of FDA-regulated products from DC 202, and initiated corrective actions.

Department of Agriculture-regulated products stored and shipped from DC 202 from January 1, 2021 through February 18, 2022 (the “Recall”), temporarily closed DC 202 for extensive cleaning, temporarily closed the affected stores to permit the removal and destruction of inventory subject to the Recall, ceased sales of relevant inventory subject to the Recall, permanently ceased the shipment of FDA-regulated products from DC 202, and initiated corrective actions.

We are taking this matter extremely seriously and are responding to all observations made in the Form 483.

The circumstances leading to the Recall (and/or the Recall itself) may have other negative impacts, which could include reputational damage, lost sales, further or additional governmental investigations and/or enforcement actions, and/or private litigation (see below), which could have a material adverse effect, individually or collectively, on our business, results of operations and/or financial condition.

Since February 22, 2022, we have received 13 class action complaints primarily related to issues associated with DC 202 described above.

The lawsuits are in federal court in Mississippi, Virginia, Arkansas, Louisiana, Tennessee, Alabama, and Missouri and allege violations of the Mississippi, Arkansas, Louisiana, Tennessee, Alabama and Missouri consumer protection laws, breach of warranty, and unjust enrichment related to the sale of products that may be contaminated by virtue of rodent infestation and other unsanitary conditions.

Since February 22, 2022, we have received 14 putative class action complaints primarily related to issues associated with DC 202 described above.

The lawsuits are proceeding in federal court in Tennessee using the federal court’s multidistrict litigation process.

A consolidated complaint seeking class action status was filed August 12, 2022 alleging violations of the Mississippi, Arkansas, Louisiana, Tennessee, Alabama and Missouri consumer protection laws, breach of warranty, negligence, misrepresentation, deception and unjust enrichment related to the sale of products that may be contaminated by virtue of rodent infestation and other unsanitary conditions.

Plaintiffs seek damages, attorney fees and costs, punitive damages and the replacement of, or refund of, money paid to purchase the relevant products, and any other legal relief available for their claims (in each case in unspecified amounts), including equitable and injunctive relief.

A hearing is scheduled in late May to determine whether these cases should proceed using the federal court’s multidistrict litigation process.

On March 1, 2022, a federal grand jury subpoena was issued to us by the Eastern District of Arkansas requesting the production of information, documents and records pertaining to pests, sanitation, compliance with law, and the issues described above.

We intend to cooperate fully with the subpoena and any related investigation, however, no assurance can be given as to the timing or outcome of this matter.

We are cooperating with the subpoena and the related investigation;

however, no assurance can be given as to the timing or outcome of this matter.

On April 28, 2022, the State of Arkansas filed a complaint in state court alleging violations of the Arkansas Deceptive Trade Practices Act, gross negligence and negligence, strict liability in tort, unjust enrichment and civil conspiracy related to the sale of products that may have been contaminated by virtue of rodent infestation and other unsanitary conditions.

1 unchanged sentence

In January, April, and September 2021, state-wide consumer class actions were filed against us by the same law firm in Georgia, Alabama and Florida, 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 PAGA lawsuits and one talc lawsuit against Family Dollar.

Please see the Dollar Tree Active Matters section above for descriptions of OSHA proceedings, PAGA lawsuits and two talc lawsuits against Family Dollar.

Family Dollar Resolved Matters

8 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 material impairment charges during the 13 weeks ended April 30, 2022 or May 1, 2021.

We did not record any material impairment charges during the 13 or 26 weeks ended July 30, 2022 or July 31, 2021.

Fair Value of Financial Instruments

1 unchanged sentence

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

April 30, 2022 January 29, 2022 May 1, 2021

July 30, 2022 January 29, 2022 July 31, 2021

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

4 unchanged sentences

The following table sets forth the calculations of basic and diluted net income per share:

13 Weeks Ended

April 30, May 1,

13 Weeks Ended 26 Weeks Ended

July 30, July 31, July 30, July 31,

(in millions, except per share data) 2022 2021 2022 2021

11 unchanged sentences

Diluted net income per share $ 1.60 $ 1.23 $ 3.97 $ 2.83

Stock options and other stock-based awards of 2.9 million shares and 0.7 million shares were excluded from the calculation of diluted net income per share for the 13 weeks ended April 30, 2022 and May 1, 2021, respectively, because their inclusion would be anti-dilutive.

Stock options and other stock-based awards of 2.3 million shares and 2.8 million shares were excluded from the calculation of diluted net income per share for the 13 and 26 weeks ended July 30, 2022, respectively, because their inclusion would be anti-dilutive.

Stock options and other stock-based awards of less than 0.1 million shares and 0.8 million shares were excluded from the calculation of diluted net income per share for the 13 and 26 weeks ended July 31, 2021, respectively, because their inclusion would be anti-dilutive.

Note 5 - Stock-Based Compensation

For a discussion of our stock-based compensation plans, refer to “Note 10 - Stock-Based Compensation Plans” of our Annual Report on Form 10-K for the year ended January 29, 2022.

Stock-based compensation expense was $ 35.8 million and $ 31.8 million during the 13 weeks ended April 30, 2022 and May 1, 2021, respectively.

Stock-based compensation expense was $ 66.1 million and $ 49.6 million during the 26 weeks ended July 30, 2022 and July 31, 2021, respectively.

Restricted Stock

3 unchanged sentences

Service-Based RSUs

The following table summarizes the status of service-based RSUs as of April 30, 2022 and changes during the 13 weeks then ended:

The following table summarizes the status of service-based RSUs as of July 30, 2022 and changes during the 26 weeks then ended:

Number of Shares Weighted Average

4 unchanged sentences

Forfeited ( 92,044 ) 116.85

Nonvested at April 30, 2022

Nonvested at July 30, 2022

905,043 $ 122.69

The following table summarizes the status of PSUs as of April 30, 2022 and changes during the 13 weeks then ended:

The following table summarizes the status of PSUs as of July 30, 2022 and changes during the 26 weeks then ended:

Number of Shares Weighted Average

4 unchanged sentences

Forfeited ( 209,824 ) 120.78

Nonvested at April 30, 2022

Nonvested at July 30, 2022

278,166 $ 118.93

15 unchanged sentences

Treasury zero-coupon securities with maturities that approximate the expected term of the options.

The following table summarizes information about options outstanding at April 30, 2022 and changes during the 13 weeks then ended:

The following table summarizes information about options outstanding at July 30, 2022 and changes during the 26 weeks then ended:

Number of Shares Weighted Average Per Share Exercise Price Weighted Average Remaining Term (Years) Aggregate Intrinsic Value

4 unchanged sentences

Exercised ( 370 ) 76.97

Outstanding at April 30, 2022

Outstanding at July 30, 2022

2,276,758 $ 156.46 9.6 $ 20.3

Exercisable at April 30, 2022

Exercisable at July 30, 2022

24,171 $ 90.59 4.3 $ 1.8

Note 6 - Shareholders’ Equity

We repurchased 89,779 shares of common stock on the open market for $ 14.2 million during the 13 weeks ended April 30, 2022.

We repurchased 2,150,572 shares of common stock on the open market for $ 250.0 million during the 13 weeks ended May 1, 2021.

Of the shares repurchased during the 13 weeks ended May 1, 2021, approximately $ 8.7 million had not settled as of May 1, 2021.

This amount was accrued and is reflected in “Other current liabilities” within the accompanying unaudited condensed consolidated balance sheet as of May 1, 2021.

At April 30, 2022, we had $ 2.5 billion remaining under Board repurchase authorization.

We repurchased 1,664,717 and 1,754,496 shares of common stock on the open market for $ 235.8 million and $ 250.0 million during the 13 and 26 weeks ended July 30, 2022, respectively.

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

Of the shares repurchased during the 26 weeks ended July 31, 2021, approximately $ 2.5 million 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.

At July 30, 2022, we had $ 2.25 billion remaining under Board repurchase authorization.

Note 7 - Segments and Disaggregated Revenue

15 unchanged sentences

Information for our segments, as well as for Corporate, support and Other, including the reconciliation to Income before income taxes, is as follows:

13 Weeks Ended

April 30, May 1,

13 Weeks Ended 26 Weeks Ended

July 30, July 31, July 30, July 31,

(in millions) 2022 2021 2022 2021

3 unchanged sentences

Consolidated Net sales $ 6,765.3 $ 6,340.2 $ 13,665.4 $ 12,817.0

13 Weeks Ended

April 30, May 1,

13 Weeks Ended 26 Weeks Ended

July 30, July 31, July 30, July 31,

(in millions) 2022 2021 2022 2021

10 unchanged sentences

Interest expense, net 30.6 33.0 64.6 66.0

Other expense, net 0.1 — 0.1 —

Income before income taxes $ 474.7 $ 369.2 $ 1,172.2 $ 856.1

April 30, January 29, May 1,

July 30, January 29, July 31,

(in millions) 2022 2022 2021

10 unchanged sentences

The following table summarizes net sales by merchandise category for our segments:

13 Weeks Ended

April 30, May 1,

13 Weeks Ended 26 Weeks Ended

July 30, July 31, July 30, July 31,

(in millions) 2022 2021 2022 2021

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