What changed in this filing

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Item 1. Financial Statements

2023-08-24 compared with 2023-05-25 · 89 added, 45 removed, 268 unchanged (33% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED INCOME STATEMENTS

13 Weeks Ended

(in millions, except per share data) April 29, 2023 April 30, 2022

13 Weeks Ended 26 Weeks Ended

(in millions, except per share data) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

Net sales $ 7,320.1 $ 6,765.3 $ 14,639.6 $ 13,665.4

5 unchanged sentences

Interest expense, net 24.2 30.6 50.1 64.6

Other expense, net 0.1 —

Other (income) expense, net ( 0.1 ) 0.1 — 0.1

Income before income taxes 263.7 474.7 657.4 1,172.2

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

13 Weeks Ended

(in millions) April 29, 2023 April 30, 2022

13 Weeks Ended 26 Weeks Ended

(in millions) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

Net income $ 200.4 $ 359.9 $ 499.4 $ 896.3

4 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions) April 29, 2023 January 28, 2023 April 30, 2022

(in millions) July 29, 2023 January 28, 2023 July 30, 2022

Current assets:

40 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

13 Weeks Ended April 29, 2023

13 Weeks Ended July 29, 2023

(in millions) Common

5 unchanged sentences

Earnings Shareholders'

Balance at April 29, 2023

220.6 $ 2.2 $ 519.5 $ ( 44.0 ) $ 8,422.0 $ 8,899.7

Net income — — — — 200.4 200.4

Total other comprehensive income — — — 3.9 — 3.9

Issuance of stock under Employee Stock

Purchase Plan — — 2.5 — — 2.5

Stock-based compensation, net — — 24.4 — — 24.4

Repurchase of stock ( 0.7 ) — ( 99.9 ) — — ( 99.9 )

Balance at July 29, 2023

219.9 $ 2.2 $ 446.5 $ ( 40.1 ) $ 8,622.4 $ 9,031.0

26 Weeks Ended July 29, 2023

(in millions) Common

Shares Common

Stock Additional

Capital Accumulated

Comprehensive

Loss Retained

Earnings Shareholders'

Balance at January 28, 2023

1 unchanged sentence

Net income — — — — 499.4 499.4

Total other comprehensive loss — — — ( 2.8 ) — ( 2.8 )

Total other comprehensive income — — — 1.1 — 1.1

Issuance of stock under Employee Stock

3 unchanged sentences

Repurchase of stock ( 1.7 ) — ( 252.0 ) — — ( 252.0 )

Balance at July 29, 2023

219.9 $ 2.2 $ 446.5 $ ( 40.1 ) $ 8,622.4 $ 9,031.0

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

DOLLAR TREE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (cont.)

13 Weeks Ended July 30, 2022

(in millions) Common

Shares Common

Stock Additional

Capital Accumulated

Comprehensive

Loss Retained

Earnings Shareholders'

Balance at April 30, 2022

225.5 $ 2.2 $ 1,230.6 $ ( 35.3 ) $ 7,044.0 $ 8,241.5

13 Weeks Ended April 30, 2022

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

13 unchanged sentences

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

Balance at April 30, 2022

Balance at July 30, 2022

223.9 $ 2.2 $ 1,026.7 $ ( 36.3 ) $ 7,403.9 $ 8,396.5

3 unchanged sentences

26 Weeks Ended

(in millions) April 29, 2023 April 30, 2022

(in millions) July 29, 2023 July 30, 2022

Cash flows from operating activities:

8 unchanged sentences

Merchandise inventories 120.5 ( 1,055.3 )

Income taxes receivable ( 22.0 ) —

Other current assets ( 18.5 ) ( 10.0 )

16 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents and restricted cash 0.9 0.2

Net increase in cash, cash equivalents and restricted cash 230.7 233.6

Net decrease in cash, cash equivalents and restricted cash ( 128.5 ) ( 295.9 )

Cash, cash equivalents and restricted cash at beginning of period 711.3 1,038.3

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 28, 2023.

The results of operations for the 13 weeks ended April 29, 2023 are not necessarily indicative of the results to be expected for the entire fiscal year ending February 3, 2024.

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 29, 2023 and April 30, 2022 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 29, 2023 are not necessarily indicative of the results to be expected for the entire fiscal year ending February 3, 2024.

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 29, 2023 and July 30, 2022 and the results of our operations and cash flows for the periods presented.

The January 28, 2023 balance sheet information was derived from the audited consolidated financial statements as of that date.

13 unchanged sentences

DC 202-related Matters

On February 11, 2022, the FDA issued Form 483 observations primarily regarding rodent infestation at Family Dollar’s West Memphis, Arkansas distribution center (“DC 202”) and the related sale and distribution of adulterated product, as well as other processes and procedures that require remediation.

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

2 unchanged sentences

Since February 22, 2022, Family Dollar has been named in 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 multi-district litigation (“MDL”) process.

An amended consolidated complaint seeking class action status was filed October 17, 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 at DC 202.

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.

As a result of a mediation held in April 2023, the parties have reached a tentative settlement in principle which if finalized will then be subject to court approval.

The lawsuits are proceeding in federal court in Tennessee using the federal court’s multi-district litigation (“MDL”) process, seek class action status, and allege 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 at DC 202.

Plaintiffs sought damages, attorney fees and costs, punitive damages and replacement 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.

As a result of a mediation held in April 2023, the parties reached a claims made settlement whereby one class member per household will receive a $ 25 Family Dollar gift certificate.

A hearing on the plaintiffs’ motion for preliminary approval of the settlement was held on July 21, 2023.

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 and compliance with law regarding certain of our procedures and products.

3 unchanged sentences

We are currently engaged in discussions with the government in an effort to reach a negotiated resolution.

Due to the inherent uncertainties associated with this matter, no assurance can be given as to the timing or outcome of this matter, which could include penalties and company undertakings.

Due to the inherent uncertainties associated with this matter, no assurance can be given as to the timing or outcome of this matter, but we acknowledge that any negotiated resolution will include penalties and company undertakings.

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 at DC 202.

The State of Arkansas is seeking injunctive relief, restitution, disgorgement, damages, civil penalties, punitive damages and suspension or revocation of our authorization to do business in Arkansas.

The parties are discussing a potential resolution of this action.

Based on the developments discussed above, we have determined that there is a probable risk of liability for settlement amounts, costs, and potential penalties and have accrued $ 30.0 million for DC 202-related matters.

The parties have engaged in discussions regarding a potential resolution of this action.

Based on the developments discussed above, we have determined that there is a probable risk of liability for settlement amounts, costs, and potential penalties and accrued $ 30.0 million in the first quarter of fiscal 2023 for DC 202-related matters.

We are currently unable to estimate the amount of additional incremental loss, if any, which may result when the matters are finally resolved.

1 unchanged sentence

Talc Product Matters

Six personal injury lawsuits are pending in state court in Illinois, New York, Texas, and New Jersey against Dollar Tree, Family Dollar or both alleging that certain talc products that we sold caused cancer.

Eight personal injury lawsuits are pending in state court in Illinois, New York, Texas, and New Jersey against Dollar Tree, Family Dollar or both alleging that certain talc products that we sold caused cancer.

The plaintiffs seek compensatory, punitive and exemplary damages, damages for loss of consortium, and attorneys’ fees and costs.

3 unchanged sentences

Acetaminophen Matters

Since August 2022, nine personal injury cases have been filed in federal court against Dollar Tree, Family Dollar, or both, on behalf of minors alleging that their mothers took acetaminophen while pregnant, that the acetaminophen interfered with fetal development such that plaintiffs were born with autism and/or ADHD, and that we knew or should have known of the danger, had a duty to warn and failed to include appropriate warnings on the product labels.

Since August 2022, personal injury cases have been filed in federal court against Dollar Tree, Family Dollar, or both, on behalf of minors alleging that their mothers took acetaminophen while pregnant, that the acetaminophen interfered with fetal development such that plaintiffs were born with autism and/or ADHD, and that we knew or should have known of the danger, had a duty to warn and failed to include appropriate warnings on the product labels.

There are currently dozens of cases pending.

The plaintiffs seek compensatory, punitive and/or exemplary damages, restitution and disgorgement, economic damages, and attorneys’ fees and costs.

These cases, which originated in California, Louisiana, Minnesota, Missouri, North Carolina, Kentucky and Texas, along with other cases against many other defendants, have been consolidated in multi-district court litigation in the Southern District of New York.

Resolved Matters

On November 9, 2022 we received an FDA Warning Letter (“Warning Letter”) with respect to DC 202 that generally identified the same conditions and issues as those described in the Form 483 observations described above or were otherwise observed during the FDA’s inspection.

The Warning Letter also acknowledged certain remedial actions we had taken in response to the Form 483 observations.

By correspondence dated April 20, 2023, the FDA informed us the inspection is closed.

We do not expect any further FDA regulatory enforcement action on this matter.

These cases, which originated in Alabama, California, Florida, Georgia, Louisiana, Minnesota, Missouri, North Carolina, Kentucky, Tennessee and Texas, along with other cases against many other defendants, have been consolidated in multi-district court litigation in the Southern District of New York.

Note 3 - Debt

Commercial Paper Program

In July 2023, we established a commercial paper program to issue unsecured commercial paper notes with maturities up to 397 days from the date of issue, up to a maximum aggregate face or principal amount outstanding at any time of $ 1.5 billion.

We expect to use the net proceeds of note issuances for general corporate purposes.

Our Revolving Credit Facility will serve as a liquidity backstop for the repayment of notes outstanding under the program.

The notes will rank pari passu with all of our other unsecured and unsubordinated indebtedness.

As of July 29, 2023, no notes have been issued under the program.

Note 4 - Fair Value Measurements

4 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 29, 2023 or April 30, 2022.

We did not record any material impairment charges during the 13 or 26 weeks ended July 29, 2023 or July 30, 2022.

Fair Value of Financial Instruments

The carrying amounts of Cash and cash equivalents, Restricted cash and Accounts payable as reported in the accompanying unaudited condensed consolidated balance sheets approximate fair value due to their short-term maturities.

The carrying value of our Revolving Credit Facility approximates its fair value.

The carrying values of our Revolving Credit Facility and borrowings under our commercial paper program approximate their fair values.

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

April 29, 2023 January 28, 2023 April 30, 2022

July 29, 2023 January 28, 2023 July 30, 2022

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

3 unchanged sentences

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

13 Weeks Ended

(in millions, except per share data) April 29, 2023 April 30, 2022

13 Weeks Ended 26 Weeks Ended

(in millions, except per share data) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

Basic net income per share:

10 unchanged sentences

Diluted net income per share $ 0.91 $ 1.60 $ 2.26 $ 3.97

Stock options and other stock-based awards of 2.9 million shares and 2.9 million shares were excluded from the calculation of diluted net income per share for the 13 weeks ended April 29, 2023 and April 30, 2022, respectively, because their inclusion would be anti-dilutive.

Stock options and other stock-based awards of 2.4 million shares and 3.0 million shares were excluded from the calculation of diluted net income per share for the 13 and 26 weeks ended July 29, 2023, 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.

Note 6 - Shareholders’ Equity

We repurchased 1,025,000 and 89,779 shares of common stock on the open market during the 13 weeks ended April 29, 2023 and April 30, 2022, respectively, for $ 151.1 million and $ 14.2 million, respectively.

Of the shares repurchased during the 13 weeks ended April 29, 2023, $ 7.7 million had not settled as of April 29, 2023 and this amount was accrued in the accompanying unaudited condensed consolidated balance sheet as of April 29, 2023.

At April 29, 2023, we had $ 1.7 billion remaining under our Board repurchase authorization.

We repurchased 703,713 and 1,728,713 shares of common stock on the open market at a cost of $ 99.9 million and $ 252.0 million, including applicable excise tax, during the 13 and 26 weeks ended July 29, 2023, respectively.

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

At July 29, 2023, we had $ 1.6 billion remaining under our Board repurchase authorization.

Note 7 - Segments and Disaggregated Revenue

3 unchanged sentences

We define our segments as those operations whose results our chief operating decision maker (“CODM”) regularly reviews to analyze performance and allocate resources.

The Dollar Tree segment is the leading operator of discount variety stores offering merchandise predominantly at the fixed price point of $ 1.25 .

The Dollar Tree segment is the leading operator of discount variety stores offering merchandise predominantly at the fixed price point of $ 1.25 , with additional offerings at $ 3 , $ 4 and $ 5 price points.

The Dollar Tree segment includes our operations under the “Dollar Tree” and “Dollar Tree Canada” brands, 15 distribution centers in the United States and two distribution centers in Canada.

9 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

(in millions) April 29, 2023 April 30, 2022

13 Weeks Ended 26 Weeks Ended

(in millions) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

Condensed Consolidated Income Statement Data:

14 unchanged sentences

Income before income taxes $ 263.7 $ 474.7 $ 657.4 $ 1,172.2

(in millions) April 29, 2023 January 28, 2023 April 30, 2022

(in millions) July 29, 2023 January 28, 2023 July 30, 2022

Condensed Consolidated Balance Sheet Data:

9 unchanged sentences

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

13 Weeks Ended

(in millions) April 29, 2023 April 30, 2022

13 Weeks Ended 26 Weeks Ended

(in millions) July 29, 2023 July 30, 2022 July 29, 2023 July 30, 2022

Dollar Tree segment net sales by

12 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