What changed in this filing

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Item 1. Business

2025-03-26 compared with 2024-03-20 · 55 added, 88 removed, 94 unchanged (60% of the section changed)

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.

We operate in two reporting business segments:

Dollar Tree and Family Dollar.

For discussion of the operating results of our reporting business segments, refer to “ Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations ” under the caption “Segment Information” and Note 13 to our consolidated financial statements.

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 $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.

Family Dollar operates general merchandise retail discount stores providing customers with a selection of competitively-priced merchandise in convenient neighborhood stores.

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

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

At February 1, 2025, we operated 8,628 stores across 48 states and the District of Columbia and operated 253 stores across five Canadian provinces.

We believe the convenience and value we offer, as well as the “thrill-of-the-hunt” shopping experience where customers discover new celebratory and seasonal items every week, are key factors in serving and growing our base of loyal customers.

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.

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

Discontinued Operations

Family Dollar stores provide customers with a selection of competitively-priced merchandise in convenient neighborhood stores, primarily serving a lower-than-average income customer in urban and rural locations.

At February 1, 2025, the Family Dollar business included the operations of 7,622 general merchandise retail discount stores and ten distribution centers.

As previously reported, in fiscal 2024 we initiated a formal review of strategic alternatives for the Family Dollar business.

This strategic alternatives review concluded in the fourth quarter of fiscal 2024 and resulted in the decision to sell the Family Dollar business.

Accordingly, the Family Dollar business met the held for sale and discontinued operations accounting criteria.

On March 25, 2025, the Company entered into a definitive agreement to sell the Family Dollar business to Brigade Capital Management, LP and Macellum Capital Management, LLC, for a purchase consideration of $1,007.0 million, subject to a number of adjustments, including with respect to working capital and net indebtedness.

The closing of the transaction is subject to satisfaction of customary closing conditions, including receipt of U.S.

antitrust approval.

Net proceeds are estimated to total approximately $804.0 million.

Unless otherwise noted, the discussion throughout Part I of this Form 10-K, including the various metrics cited, excludes the Family Dollar business and pertains only to our continuing operations.

For information on discontinued operations, refer to Note 2 to our consolidated financial statements under the caption “Assets Held for Sale and Discontinued Operations” and Note 15 .

Corporate Culture

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.

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.

We focus our ways of working on open, frequent communication and approach our roles with a continuous improvement mindset.

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

Additionally, our people programs, as well as our meaningful focus on culture 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.

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.

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

In our Dollar Tree stores, we continue to expand our brand assortment at the $1.25 price point to provide greater value to our customers and increase customer traffic and store productivity.

We are continuing to expand our multi-price product assortment, which began with the introduction of $3 and $5 products 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 at varying price points.

Through a partnership with Instacart, our customers can shop online and receive same-day delivery from more than 7,400 Dollar Tree stores, as of February 1, 2025, without having to visit a store.

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Our revenue and assets in Canada are not material.

We strive to exceed our customers’ expectations of the variety and quality of products they can purchase by offering items we believe typically sell for higher prices elsewhere.

We strive to exceed our customers’ expectations for product variety and quality by offering items we believe typically sell for higher prices elsewhere, and we believe our mix of imported and domestic merchandise is critical to this end.

In addition, direct

relationships with manufacturers permit us to select from a broad range of products and customize packaging, product sizes and package quantities that best meet our customers’ needs.

Merchandise imported directly typically accounts for approximately 40% of our total retail value purchases, with the remaining merchandise purchased domestically.

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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.

In addition, direct relationships with manufacturers permit us to select from a broad range of products and customize packaging, product sizes and package quantities that best meet our customers’ needs.

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.

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

We carry approximately 8,600 items in our stores, and as of the end of fiscal 2024 approximately 33% of our items were automatically replenished.

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

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Closeout and promotional merchandise is purchased opportunistically and represents less than 10% of our purchases.

The merchandise mix in our Dollar Tree stores consists of:

The merchandise mix in our stores consists of:

• 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:

• Discretionary merchandise 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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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.

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.

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 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.

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;

◦ Apparel and accessories merchandise, which includes clothing, fashion accessories and shoes;

◦ Seasonal and electronics merchandise, which includes Christmas, Easter, Halloween and Valentine’s Day merchandise, personal electronics, including pre-paid cellular phones and services, stationery and school supplies, and toys.

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.

Our marketing mission is to surprise and delight our customer with great value, assortment, and treasure hunt excitement.

We believe the customer experience is extremely important to our marketing plan success and our ability to drive incremental business.

Our marketing efforts are primarily focused on driving store traffic by providing value to our customers through our new advanced digital targeting capabilities, genuine and authentic brand building via social influencers and posts, showcasing amazing assortment in our digital ads, creating a robust web and app customer experience, and utilizing in-store signage to help educate customers and drive conversion.

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.

We leverage our merchandising team to source products that can be sold in both Dollar Tree and Family Dollar stores.

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

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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 serve our Family Dollar stores.

We currently operate 15 distribution centers in the United States.

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.

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.

As part of our efforts to scale our distribution network to support future store growth, we plan to convert the Odessa, Texas Family Dollar distribution center to a Dollar Tree distribution center in the second quarter of fiscal 2025.

We continue to make investments in our truck fleet, 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 category.

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.

Our stores receive approximately 90% 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.

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.

Distribution services in Canada are provided by a third party from two facilities, one in British Columbia and one in 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 .”

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.

We operate in the value retail sector, which is currently and in the future 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 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.

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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.

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

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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.

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.

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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.

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 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 (“ARGs”), including:

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

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 associates.

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.

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.

• Culture and Belonging.

Our goal is to create and support a culture of inclusion and belonging for each individual associate.

We recognize that our customer base and the communities we serve are highly diverse, and we seek to create an environment in which the unique skills and perspectives of our associates and customers are understood, respected and appreciated.

To further this goal, we have a Chief Culture and Belonging Officer (“CCABO”), which is a Senior Special Counsel role, on all matters related to Culture and Belonging.

The CCABO is charged with creating and implementing strategies focused on corporate culture and the promotion of an inclusive environment in which all associates and customers feel welcome and valued, doing so in a manner consistent with our business goals and applicable law.

In addition, we provide associate training on topics related to promoting a culture of inclusion and belonging and have formed a number of associate resource groups (“ARGs”).

Each ARG is open to all associates.

Our objective is to build a platform to encourage professional development, support community outreach and customer engagement, cultivate mentoring, attract talent from the communities we serve, and promote cross-functional teamwork for all associates.

Each ARG is supported by an executive sponsor and a Human Resources partner to ensure efforts are aligned with the business.

• Workplace safety.

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.

Our 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.

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We believe that our associates are the most critical part of our business, and supporting an engaging culture where people can do their best work is a top priority for our leaders.

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.

In recent years 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 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:

In addition, associates are encouraged to use our ethics hotline, known as Integrity Matters, to report concerns that they may have.

Integrity Matters is a confidential reporting tool managed by an independent third party.

The number of associates we employed as of February 1, 2025 is as follows, including associates within the held for sale Family Dollar business:

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