What changed in this filing

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Item 1. Business

2024-03-20 compared with 2023-03-10 · 110 added, 87 removed, 72 unchanged (73% of the section changed)

We are a leading operator of discount variety stores with a solid history of growth and performance.

Our stores operate under the brand names of Dollar Tree, Family Dollar and Dollar Tree Canada.

At January 28, 2023, we operated 16,340 discount variety retail stores across 48 states and five Canadian provinces and over the long-term, we believe that the market can support more than 10,000 Dollar Tree stores and 15,000 Family Dollar stores across the United States, and approximately 1,000 Dollar Tree stores in Canada.

We are a leading operator of retail discount stores operating under the brand names of Dollar Tree, Family Dollar and Dollar Tree Canada.

At February 3, 2024, we operated 16,774 retail discount stores across 48 states and five Canadian provinces.

Over the long-term, we believe that the market can support more than 10,000 Dollar Tree stores and 15,000 Family Dollar stores across the United States, and approximately 1,000 Dollar Tree stores in Canada.

We believe the convenience and value we offer are key factors in serving and growing our base of loyal customers.

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We execute a dual-banner strategy that aims to offer the best of our brands in various store formats to serve customers in all types of geographic markets.

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

Dollar Tree is the leading operator of discount variety stores offering merchandise predominantly at the $1.25 price point, with a growing range of additional price points.

Dollar Tree stores serve customers with a broad range of income levels in suburban locations, striving continuously to “Wow” the customer with a compelling, fun and fresh merchandise assortment comprised of a variety of the things the customer wants and needs, all at incredible values in bright, clean and friendly stores.

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Family Dollar primarily serves a lower-than-average income customer in urban and rural locations, offering great values on everyday items.

We are committed to growing our combined business through new store openings and through our store relocation, expansion and remodel program.

We plan to open new stores in underserved markets and to strategically increase our presence in our existing markets.

We are executing our strategic initiatives including Dollar Tree Plus and the Family Dollar H2 and Combination Store (or Combo Store) format initiatives.

We are focused on refining our assortment in every store by leveraging the complementary merchandise expertise of each segment, including Dollar Tree’s sourcing and product development expertise and Family Dollar’s consumer package goods and national brands sourcing expertise.

These initiatives are discussed further in the overview of each segment below.

We are committed to growing our business through new store openings, expanded geographies, improved product offerings, store renovations and remodeling, investments in our workforce and other initiatives to modernize and optimize our stores, our supply chain and distribution network and our technology.

These initiatives are discussed further below and in “ Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations .”

Corporate Culture

We believe that honesty and integrity, and treating people fairly and with respect are core values within our corporate culture.

We believe that running a business, and certainly a public company, carries with it a responsibility to be above reproach when making operational and financial decisions.

Our executive management team visits and shops at our stores like every customer, and ideas and individual creativity on the part of our associates are encouraged, particularly from our store managers who best know their stores and their customers.

We have standards for store displays, merchandise presentation, and store operations.

We maintain an open-door policy for all associates.

Our distribution centers are operated based on objective measures of performance and our store support center associates are available to assist associates in our stores and distribution centers.

For more information, see Human Capital Resources below.

The Dollar Tree segment includes 8,134 stores operating under the Dollar Tree and Dollar Tree Canada brands, 15 distribution centers in the United States and two in Canada.

At Dollar Tree and Family Dollar our core values drive how we treat our customers and each other to support a welcoming shopping experience and an engaging work environment.

At every level of our organization, we build our culture by serving with accountability, inspiring belonging, championing empowerment, operating with excellence, and acting with integrity.

With new senior leadership throughout the organization, we focus our ways of working on open, frequent communication and approach our roles with a continuous improvement mindset.

Our new communication vehicles foster two-way dialogue and offer continuous touchpoints for associates to hear about our strategy, values and ways of working, learn from senior leaders about our business progress and connect with one another.

Additionally, our people programs, as well as our meaningful focus on diversity, equity, inclusion and belonging, reinforce our shared values and behaviors.

For more information, see the “Our People” section below.

The Dollar Tree segment includes 8,415 stores operating under the Dollar Tree and Dollar Tree Canada brands, 15 distribution centers in the United States and two in Canada as of February 3, 2024.

Our stores predominantly range from 8,000 - 10,000 selling square feet.

During the third quarter of 2021, we announced our new $1.25 price point initiative and we completed the rollout of this initiative to all Dollar Tree stores in the United States during the first quarter of fiscal 2022, increasing the price point on a majority of our $1.00 merchandise to $1.25.

During fiscal 2022, we began investing in new products and modifying existing products to provide greater value for our customers and increase customer traffic and store productivity.

We continue to expand our Dollar Tree Plus initiative which provides our customers with extraordinary value in discretionary and consumable categories priced at the $3, $4 and $5 price points.

During 2021, we entered into a partnership with Instacart and as of January 28, 2023, our customers can shop online and receive same-day delivery from more than 7,800 Dollar Tree stores without having to visit a store.

We are the owners of several trademarks including “Dollar Tree” and the “Dollar Tree” logo.

In our Dollar Tree Canada stores, we sell items principally for $1.50(CAD) or less.

We continue to expand our brand assortment at the $1.25 price point to provide greater value for our customers and increase customer traffic and store productivity.

We are continuing to expand our multi-price product assortment, which began with our introduction of $3 and $5 Dollar Tree Plus product in select discretionary categories, expanded into $3, $4 and $5 frozen and refrigerated product, and now comprises a wide assortment of other consumable and discretionary product.

Through a partnership with Instacart, our customers can shop online and receive same-day delivery from more than 7,500 Dollar Tree stores, as of February 3, 2024, without having to visit a store.

In our Dollar Tree Canada stores, we generally sell items for $1.50(CAD) or less.

Our revenue and assets in Canada are not material.

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Merchandise imported directly typically accounts for approximately 41% - 43% of our total retail value purchases, with the remaining merchandise purchased domestically.

Our domestic purchases include basic, home,

closeouts and promotional merchandise.

Among our foreign suppliers, China is the source of a vast majority of our direct imports and we believe that a significant portion of our goods purchased from domestic vendors is imported.

Our domestic purchases include basic, home, closeouts and promotional merchandise.

We believe our mix of imported and domestic merchandise affords our buyers flexibility that enables them to consistently exceed our customers’ expectations.

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We carry approximately 8,000 items in our Dollar Tree stores, and as of the end of fiscal 2023 approximately 27% of our items were automatically replenished.

The remaining items are pushed to the stores and a portion can be reordered by our store managers on a weekly basis.

Through automatic replenishment and our store managers’ ability to order product, each store manager is able to satisfy the demands of their particular customer base.

The remaining items are either allocated to the stores or managed by direct store delivery (“DSD”) vendors.

Through automatic replenishment, store-specific allocations and DSD vendors, each store is able to satisfy the demands of their particular customer base.

We maintain a balanced selection of products within traditional variety store categories.

We offer a wide selection of everyday basic products and we supplement these basic, everyday items with seasonal, closeout and promotional merchandise.

We offer a wide selection of everyday basic products and we supplement these with seasonal, closeout and promotional merchandise.

We attempt to keep certain basic consumable merchandise in our stores continuously to establish our stores as a destination and increase traffic in our stores.

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• Consumable merchandise, which includes everyday consumables such as household paper and chemicals, food, candy, health and personal care products, and in most stores, frozen and refrigerated food;

• Discretionary merchandise, which includes the following:

◦ Variety merchandise, which includes toys, durable housewares, gifts, stationery, party goods, greeting cards, softlines, arts and crafts supplies and other items;

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Family Dollar

The Family Dollar segment includes 8,359 stores operating under the Family Dollar brand and ten distribution centers as of February 3, 2024.

In our Family Dollar stores, we sell merchandise at prices that generally range from $1.00 to $10.00.

Our stores predominantly range from 6,000 - 8,000 selling square feet.

The Family Dollar segment consists of our store operations under the Family Dollar brand and ten distribution centers.

We have two primary initiatives for our Family Dollar stores, the H2 format and our Combo Store format, both of which incorporate elements of our Dollar Tree stores into Family Dollar stores.

The H2 model stores include Dollar Tree $1.25 merchandise items and establish a minimum number of freezer and cooler doors throughout the store.

As of January 28, 2023, we operated approximately 4,360 H2 stores.

The Combo Store format, which was designed specifically for small towns and rural communities with populations of 3,000 to 4,000 residents, blends Family Dollar’s great value and assortment with select Dollar Tree merchandise categories under one roof.

As of January 28, 2023, we operated approximately 810 Combo Stores.

Our new and renovated H2 and Combo Stores have higher sales and operating income margins compared with legacy Family Dollar stores.

During 2021, we entered into a partnership with Instacart and as of January 28, 2023, our customers can shop online and receive same-day delivery from more than 7,500 Family Dollar stores without having to visit a store.

We are the owners of the trademarks “Family Dollar,” “Family Dollar Stores” and other names and designs of certain merchandise sold in Family Dollar stores.

Historically, our stores have predominantly ranged from 6,000 - 8,000 selling square feet.

We are continuing to implement our store design initiatives at Family Dollar which provide significantly improved merchandise offerings and establish a minimum number of cooler doors.

We tailor space and assortment to local demographics with emerging formats including H2.5, our primary store format with 6,700 - 8,700 selling square feet, optimized layout and expanded frozen and refrigerated doors;

larger rural stores with more than 8,700 selling square feet and assortments that may include Dollar Tree product;

and XSB (Extra Small Box), which has less than 6,700 selling square feet and adds elements of H2.5 optimized to our smaller stores, particularly in urban markets.

As of February 3, 2024, our customers can shop online via Instacart and receive same-day delivery from more than 7,300 Family Dollar stores without having to visit a store.

Our Family Dollar stores provide customers with a quality, high-value assortment of basic necessities and seasonal merchandise.

We offer competitively-priced national brands from leading manufacturers alongside name brand equivalent-value, lower-priced private labels.

We continue to introduce new private brands at Family Dollar, convert control brands to private brands and align our “Family” brand message across key categories.

We purchase merchandise from a wide base of suppliers and generally have not experienced difficulty in obtaining adequate quantities of merchandise.

In fiscal 2022, we purchased approximately 15% of our merchandise through our relationship with McLane Company, Inc., which distributes consumable merchandise from multiple manufacturers.

In fiscal 2023, we purchased approximately 15% of our merchandise at retail value through our relationship with McLane Company, Inc., which distributes consumable merchandise from multiple manufacturers.

In addition, merchandise imported directly typically accounts for approximately 15% - 17% of our total retail value purchases.

While the number of items in a given store can vary based on the store’s size, geographic location, merchandising initiatives and other factors, our typical Family Dollar store generally carries approximately 7,600 basic items alongside items that are ever-changing and seasonally-relevant throughout the year.

Among our foreign suppliers, China is the source of a vast majority of our direct imports and we believe that a significant portion of our goods purchased from domestic vendors is imported.

While the number of items in a given store can vary based on the store’s size, geographic location, merchandising initiatives and other factors, our typical Family Dollar store generally carries approximately 11,800 items, and as of the end of fiscal 2023 approximately 75% of our items were automatically replenished.

Across all of Family Dollar’s formats we are expanding our SKUs, continuing to add cooler doors, increasing our standard shelf profile, and implementing planogram and category resets.

The merchandise mix in our Family Dollar stores consists of:

• Consumable merchandise, which includes food and beverages, tobacco, health and personal care products, household chemicals, paper products, hardware and automotive supplies, diapers, batteries, and pet food and supplies;

• Discretionary merchandise, which includes the following:

◦ Home products, which include housewares, home décor, giftware, and domestics, including comforters, sheets and towels;

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For information regarding the amounts and percentages of our net sales contributed by the above merchandise categories for the last three fiscal years, please refer to Note 13 to our consolidated financial statements.

During the fourth quarter of fiscal 2023, we announced that we had initiated a comprehensive store portfolio optimization review which involved identifying stores for closure, relocation or re-bannering based on an evaluation of current market conditions and individual store performance, among other factors.

As a result of this portfolio optimization review, we plan to close approximately 970 underperforming Family Dollar stores, including approximately 600 stores to be closed in the first half of fiscal 2024, and approximately 370 stores to be closed at the end of each store's current lease term.

Additionally, we identified approximately 30 underperforming Dollar Tree stores for closure and plan to close each store at the end of the store's current lease term.

See “ Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations ” and Note 16 to our consolidated financial statements for additional information on the store portfolio optimization review.

Marketing & Retail Media

We believe the customer experience is important to the success of our business.

Our marketing efforts are focused on providing value to our customers through advancing our capabilities and delivering on our brand promise of ‘Helping you do more.’ In the third quarter of fiscal 2023, we launched a new app for Family Dollar with the goal of offering improved product discovery and engagement with our smart coupon program, as well as to provide opportunities for our vendor partners to market their products through our app.

In the fourth quarter of fiscal 2023, we entered into a multi-year sponsorship agreement with a NASCAR Cup Series racing team, which will spotlight the Dollar Tree and Family Dollar brands as well as the brands of our vendor partners.

We believe our substantial buying power and our flexibility in making sourcing decisions contributes to our successful purchasing strategy, which includes targeted merchandise margin goals by category.

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We also believe our ability to negotiate with our vendor partners enables us to manage the margin impact of economic pressures.

We buy products on an order-by-order basis and have no material long-term purchase contracts or other assurances of continued product supply or guaranteed product cost.

Historically, no vendor has accounted for more than 10% of total merchandise purchased by us.

Our merchandise systems provide us with valuable sales information to assist our buyers and improve product allocation to our stores.

We use this information to target our inventory levels in our distribution centers and stores in order to plan for capacity and labor needs.

We primarily buy products on an order-by-order basis and have no material long-term purchase contracts or other assurances of continued product supply or guaranteed product cost.

Historically, no merchandise vendor has accounted for more than 10% of total merchandise purchased by the company.

A strong and efficient distribution network is critical to our ability to grow and to maintain a low-cost operating structure.

We currently operate 25 distribution centers in the United States, 15 of which are primarily dedicated to serving our Dollar Tree stores and ten distribution centers primarily serve our Family Dollar stores.

We expect future distribution centers to be built with the capability to service both Dollar Tree and Family Dollar stores.

We currently operate 25 distribution centers in the United States, 15 of which are primarily dedicated to serving our Dollar Tree stores and ten distribution centers serve our Family Dollar stores.

New distribution sites are strategically located to reduce the distance between the distribution centers and stores, maintain flexibility and improve efficiency in our store service areas.

We expect to complete a significant expansion of our Ocala, Florida distribution center in 2024 which will include enhanced automation.

Our Dollar Tree stores receive approximately 92% of their inventory from our distribution centers via contract carriers and our Family Dollar stores receive approximately 70% of their inventory from our distribution centers.

In fiscal 2024, we expect to re-open our West Memphis, Arkansas distribution center and to complete a significant expansion of our Ocala, Florida distribution center which will include enhanced automation.

W e continue to make investments in our trucking fleet and transportation management systems and a new RotaCart delivery process to streamline the truck unloading and store delivery process.

A RotaCart is a wheeled container that allows quick, easy store deliveries loaded by merchandise family groups.

The RotaCarts are nestable, allowing for easy return to the distribution centers.

Our Dollar Tree stores receive approximately 90% of their inventory from our distribution centers and our Family Dollar stores receive approximately 70% of their inventory from our distribution centers.

The remaining store inventory, primarily perishable consumable items and other vendor-maintained display items, are delivered directly to our stores from vendors or third party distributors.

Our Family Dollar stores receive approximately 15% of their merchandise from McLane Company, Inc.

Approximately 15% of the merchandise in Family Dollar stores is distributed by McLane Company, Inc.

For more information on our distribution center network, see “ Item 2.

Properties .”

Distribution services in Canada are provided by a third party from facilities in British Columbia and Ontario.

For information on the impact of seasonality, see “ Item 1A.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations .”

Our segment of the retail industry is fragmented and highly competitive and we expect competition to increase in the future.

We operate in the discount retail sector, which is currently and is expected to continue to be highly competitive with respect to price, store location, merchandise quality, assortment and presentation, and customer service, including merchandise delivery and checkout options.

Our competitors include single-price dollar stores, multi-price dollar stores, mass merchandisers, online retailers, discount retailers, drug stores, convenience stores, independently-operated discount stores, grocery stores and a wide variety of other retailers.

In addition, several competitors have sections within their stores devoted to “one dollar” price point merchandise, which further increases competition.

Our competitors include dollar stores, mass merchandisers, online retailers, discount retailers, drug stores, convenience stores, independently-operated discount stores, grocery stores and a wide variety of other retailers.

These other retail companies operate stores in many of the areas where we operate, and many of them engage in extensive advertising and marketing efforts.

We believe we differentiate ourselves from other retailers by providing high-value, high-quality, low-cost merchandise in attractively-designed stores that are conveniently located.

Our sales and profits could be reduced by increases in competition.

There are no significant economic barriers for others to enter our retail sector.

Government Regulation

We are subject to a wide variety of local, state and federal laws and regulations within the United States and Canada.

Compliance with these laws and regulations often requires the dedication of our associates’ time and attention, as well as financial resources.

Historically, compliance with these laws and regulations did not have a material effect on our capital expenditures, earnings or competitive position;

however, in fiscal 2022, we closed our West Memphis, Arkansas distribution center (“DC 202”) following observations of rodent infestation at the facility as well as other items that required remediation.

During the first quarter of fiscal 2022, approximately 400 stores serviced by DC 202 were temporarily closed in connection with a retail-level product recall.

We incurred costs related to the product recall, remediation efforts and asset impairment during fiscal 2022.

Remediation-related costs included merchandise disposal costs, payroll and legal costs as well as incremental freight costs resulting from stores being serviced by distribution centers which are farther away.

Human Capital Resources

Our business success is built upon our dedicated, passionate and diverse associates who work and live in the communities we serve.

Our goal is to provide a working environment that is welcoming and inclusive, offers competitive pay and benefits, supports the growth and development of our associates, and affirms our corporate values and mission.

We recruit and hire in the communities we serve using local job fairs, social media as well as local community service partners to provide part-time and full-time jobs that can become lasting careers.

Our Human Resources team, with oversight from our Board of Directors and its committees, develops and executes programs for compensation and benefits, onboarding and training, professional development, performance management, retention and succession planning.

We greatly value our people and invest in their personal well-being and professional growth through various human capital programs and initiatives, including the following:

These laws and regulations relate to, among other things, the operation of our facilities and the sale of products, including without limitation product and food safety, marketing and labeling;

labor and employment, including wage and hour, benefits, healthcare and workplace safety;

antitrust and fair competition;

privacy and information security;

tariff and trade;

energy and environmental protection;

financial reporting and disclosure;

intellectual property;

We routinely incur significant compliance-related costs, both direct and indirect, with respect to these laws and regulations which may have a material effect on our capital expenditures, earnings or competitive position.

For more information, see “ Item 1A.

Risk Factors .”

Intellectual Property

We are the owners of several trademarks including “Dollar Tree,” the “Dollar Tree” logo, “Family Dollar,” “Family Dollar Stores” and other names and designs of certain merchandise sold in our Dollar Tree and Family Dollar stores.

Our trademarks are generally valid and may be renewed indefinitely as long as they are in use and/or their registrations are properly maintained.

Our business success, customer satisfaction and employee engagement are built upon our dedicated associates who work and live in the communities we serve.

Our goal is to provide a work environment that is welcoming and inclusive, offers competitive pay and benefits, supports growth and development, and affirms our corporate values.

We recruit and hire in the communities we serve using associate referrals, local job fairs and social media as well as local community service partners to provide part-time and full-time jobs that can become lasting careers.

Our Human Resources team, with oversight from our Board of Directors and its committees, develops and executes programs for compensation and benefits, onboarding and training, professional and leadership development, performance management, recognition and succession planning.

We show care for our people by investing in their personal well-being and professional growth through a variety of people programs and initiatives, including:

• Compensation, benefits and well-being.

We are committed to providing market-competitive pay for all positions, and we are a pay-for-performance organization, offering performance-based compensation opportunities at nearly all levels of the organization, including certain hourly-paid positions.

We strive to ensure gender and racial pay equity for employees performing equal or substantially similar work.

Eligible associates can participate in our Retirement Savings Plan, which provides a dollar for dollar match on the first 5% of employee contributions and all associates can participate in our Employee Stock Purchase Plan.

All full-time and part-time associates are eligible for competitive health and welfare benefits, including medical, dental and vision.

Associates may be eligible for other benefits including disability and life insurance as well as primary caregiver and parental leave.

We have a program that provides financial support to associates recovering from natural disasters and personal hardships as well as a scholarship program for associates with children pursuing higher education.

We also offer a voluntary benefit called “pay any day,” which allows associates to advance their payday earnings for flexibility in meeting their bills and expenses.

In the last year, we made approximately $175.0 million in annualized wage investments across the organization, which includes $60.5 million of statutorily required minimum wage increases.

We strive to ensure gender and racial pay equity for associates performing equal or substantially similar work.

Eligible associates can participate in our Retirement Savings Plan, which provides a dollar-for-dollar match on the first 5% of associate contributions, and all associates can participate in our Employee Stock Purchase Plan.

All full-time and part-time associates are eligible for health and welfare benefits, including medical, dental and vision.

Associates may be eligible for other benefits including educational assistance, disability and life insurance as well as paid maternity and parental leave.

Financial support to associates recovering from natural disasters and personal hardships as well as a scholarship program for associates with children pursuing higher education are also available.

Associates are offered the flexibility to advance their payday earnings to meet their personal bills and expenses.

• Talent development and retention.

We believe in the growth and development of our associates and are committed to building a culture of learning in which associates are given the opportunity to enhance their skills at every stage of their career.

To support this objective, we provide a multitude of professional and leadership development experiences, including online and instructor-led trainings, tuition reimbursement for graduate, undergraduate, GED and English as a Second Language classes, and discounted tuition at over 200 colleges and universities for our associates and their families.

Retention of our associates is a focus for all leaders and we continue to strive to improve our turnover rate.

To identify high-potential talent, leadership assesses talent at the store manager level and above on a regular basis through structured talent reviews and succession planning paired with customized development plans.

We believe in the growth and development of our associates and are committed to building a culture of learning that gives associates the opportunity to enhance their skills at every stage of their career.

To support this objective, we provide a multitude of professional and leadership development experiences, including online and instructor-led trainings, tuition reimbursement for graduate, undergraduate, General Educational Development (“GED”) and English as a Second Language classes, and discounted tuition at hundreds of colleges and universities for our associates and their families.

Retention of our associates is a focus for all leaders and we continuously aim to improve our turnover rate.

To identify high-potential individuals, leadership assesses talent at the store manager level and above on a regular basis through structured talent reviews and succession planning paired with customized development plans.

This focus on talent resulted in more than 48,400 promotions in fiscal 2023.

• Diversity, equity and inclusion.

We believe our associates should mirror our diverse customer base and the communities we serve.

In fiscal 2023 we also started building our first

leadership academy, focusing on our field district managers and setting the stage for similar programs for other groups of leaders throughout the organization.

• Diversity, equity and inclusion (“DEI”).

We believe our associates should mirror our highly diverse customer base and the communities we serve, and our DEI efforts strive to inspire belonging both inside and outside our company.

Our goal is to create and support a culture of inclusion within a diverse workforce where the unique skills and perspectives of our associates and customers are understood, respected and appreciated.

To further this goal, we established a Diversity, Equity and Inclusion (DEI) Executive Council comprised of senior leaders from every department.

To further this goal, we have continued to build on our DEI Executive Council comprised of senior leaders from every department.

The DEI Executive Council provides strategic and tactical leadership support to our Chief Diversity Officer (“CDO”) on all matters related to DEI.

The CDO is charged with creating and implementing DEI-focused strategies consistent with our business goals, catalyzing cultural change throughout the organization and driving accountability at the senior management level for progress on key DEI objectives.

In addition, we provide associate training on DEI topics and have formed a number of associate resource groups.

Our objective is to build a platform to encourage professional development, support community outreach, cultivate mentoring, attract diverse talent and promote cross-functional teamwork for all employees.

Each associate resource group will be supported by an executive sponsor who is a member of the DEI Executive Council or senior leadership team.

In addition, we provide associate training on DEI topics and have formed a number of associate resource groups (“ARGs”), including:

Asian American Pacific Islander League, Black Advocate Alliance, Champions for Women, Hispanic Heritage Network, Pride, and Veterans Engaging Together in Service.

Each ARG is supported by a senior executive sponsor who is a member of the DEI Executive Council, an executive leader and a Human Resources partner to ensure efforts are aligned with the business.

• Workplace safety.

We strive to maintain a safe working environment for our associates with a safety program designed to promote accident prevention.

Among other things, our environmental health and safety department establishes standard safety protocols and operating procedures across the company, and our field managers are responsible for overseeing associate safety training and conducting store safety audits.

In response to the COVID-19 pandemic, we implemented several changes to protect our associates and our customers and to ensure adherence to Centers for Disease Control and Prevention recommendations.

Safety is a foundational part of our culture, embedded in all aspects of how we run our business.

Our expanded Asset Protection department, which includes Environmental, Health and Safety and Workplace Violence teams leads our comprehensive safety programming across all areas of our enterprise.

Throughout the organization, we operate with a commitment to “Safety First, Safety Always,” with the shared understanding that a safe working environment is the responsibility of every associate.

Through training and technology, we are able to implement measures that protect our associates and customers, and leverage predictive analytics to proactively identify and support stores in need of safety assistance.

Furthermore, preventing incidents of workplace violence is a critical aspect of our safety program.

Our comprehensive workplace violence prevention efforts focus on five foundational areas of training;

investigation;

prevention and community outreach.

• Communication and engagement.

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Over the last year we have added new channels to foster two-way dialogue and ensure we are listening to our associates and taking action on their feedback.

A recent culture assessment helped identify areas of focus and prepare the organization for a robust employee engagement survey process to close the gap between our current culture and the culture we aspire to have.

As of January 28, 2023, we employed more than 207,500 associates, as follows:

A comprehensive strategic communication plan has been put in place to ensure our associates across the organization hear directly from our executive leaders on a regular basis to remain aligned with key priorities.

And Workplace, our internal communication and collaboration tool introduced in fiscal 2023, gives associates a voice as well as visibility into the great work and progress happening across the company.

Our annual associate engagement survey and semiannual pulse survey assess and highlight areas of focus that are important to our people, providing managers with quantitative and qualitative feedback directly from their teams.

Our robust associate engagement survey process includes action planning to have meaningful impact on our continued cultural evolution.

As of February 3, 2024, we employed more than 211,800 associates, as follows:

Store and Distribution Center Associates

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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-K

Item 1. Business