What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-06-04 compared with 2024-12-04 · 150 added, 204 removed, 129 unchanged (73% of the section changed)

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For example, our forward-looking statements include, without limitation, statements regarding:

• Our plans and expectations regarding our current initiatives and future strategic investments and the uncertainty with respect to the amount, timing and impact of those initiatives and investments on our business and results of operations;

• Our merchandising plans and initiatives and related impacts, including those regarding product and brand assortment, merchandisable space and store layout, cooler and freezer expansions, private brand products and planogram and category resets in the Family Dollar segment, and multi-price assortments in the Dollar Tree segment;

• Our plans to add, renovate and remodel stores, including our plans relating to emerging store formats such as H2.5, rural and XSB formats for Family Dollar stores, and our expectations regarding store standards and operations, efficiency initiatives, selling square footage and the performance of those formats;

• Our expectations regarding the implementation and impact of investments in supply chain, distribution facilities, truck fleet and transportation management systems, store delivery and equipment, the in-store experience, wage investments and other workforce investments and goals;

• Our expectations regarding the implementation and impact of investments in our technology and the design and implementation of internal controls around our technology transformation;

• Our plans to close, relocate or re-banner stores as a result of our store portfolio optimization review;

• Our plans and expectations regarding our review of strategic alternatives for the Family Dollar business segment;

• The potential effect of general business or economic conditions on our business and our customers, including the direct and indirect effects of inflation and interest rates on our sales and our operating income;

• The expected and possible outcome, costs, and impact of pending or potential litigation, arbitrations, other legal proceedings or governmental investigations, including proceedings arising out of or relating to issues associated with Family Dollar’s West Memphis, Arkansas distribution center, our plans regarding these matters, and the availability of indemnification or insurance with respect to such matters;

• The impacts of tornado damage to our Dollar Tree distribution center in Marietta, Oklahoma, including expectations regarding inventory and property losses, the availability of insurance coverage and expected insurance recoveries, costs and other changes within our supply chain network and our customer shopping experience;

• Risks related to inflation and interest rates;

• Our expectations regarding our commercial paper program and supply chain finance program;

• Our plans and expectations regarding our current and future strategic initiatives, and the uncertainty with respect to the amount, timing and impact of those initiatives and investments on our business and results of operations;

• Our merchandising plans and initiatives and related impacts, including those regarding multi-price assortments in the Dollar Tree segment and our ability to adjust pricing;

• Our plans to add, renovate and remodel stores, and our expectations regarding store standards and operations, efficiency initiatives, selling square footage, the in-store experience and the performance of those formats;

• Our customer’s response to our product offerings, value and shopping experience;

• Our expectations regarding the implementation and impact of investments in supply chain, distribution facilities, warehouse and human capital management systems, trucking fleet and transportation management systems, and store delivery and equipment, including new distribution centers, the expansion or conversion of existing distribution centers, and the capabilities of our distribution center network;

• Our expectations regarding the implementation and impact of investments in our technology infrastructure;

• The design and implementation of internal controls around various investments and initiatives;

• Our plans and expectations regarding the pending sale of the Family Dollar business;

• The potential effect of general business or economic conditions on our business and our customers, including the direct and indirect effects of inflation and interest rates on our business;

• The direct and indirect impacts of current and potential tariffs and other trade-related measures, restrictions and policies and any retaliatory counter measures, and our plans to mitigate those impacts;

• The expected and possible outcome, costs, and impact of pending or potential litigation, arbitrations, other legal proceedings or governmental investigations, our plans regarding these matters, and the availability of indemnification or insurance with respect to such matters;

• The impacts of tornado damage to our Dollar Tree distribution center in Marietta, Oklahoma, including changes within our supply chain network and expectations regarding our customer shopping experience;

• Our liquidity and cash needs, including our ability to fund our future capital expenditures and working capital requirements.

• Management’s estimates associated with our critical accounting estimates, including self-insurance liabilities for general liability claims.

A forward-looking statement is neither a prediction nor a guarantee of future results, events or circumstances.

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The following risks could have a material adverse impact on our sales, costs, profitability, financial performance or implementation of strategic initiatives:

• Our profitability is vulnerable to increases in merchandise, shipping, tariffs, freight and fuel costs, wage and benefit and other operating costs.

• Our profitability is vulnerable to cost pressures from increases in merchandise, shipping, freight and fuel costs, wage and benefit and other operating costs.

• Risks associated with merchandise supply could adversely affect our financial performance.

• Higher costs and disruptions in our distribution network could have an adverse impact on our sales and profitability.

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• We could experience a decline in consumer confidence and spending because of concerns about the quality and safety of our products or our brand standards.

• Inflation or other adverse change or downturn in economic conditions could impact our sales or profitability.

• Risks associated with merchandise supply could adversely affect our financial performance.

• Inflation, other changes in economic conditions or consumer spending habits could impact our sales or profitability.

• Our growth is dependent on our ability to increase sales in existing stores and to expand our square footage profitably.

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• We rely on third parties in many aspects of our business, which creates additional risk.

• We may not be successful in implementing or in anticipating the impact of important strategic initiatives, and our plans for implementing such initiatives may be altered or delayed due to various factors, which may have an adverse impact on our business and financial results.

• We could incur losses due to impairment of goodwill and other long-lived assets.

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

• The completion of the pending sale of the Family Dollar business is subject to various risks and uncertainties, may not be completed in a timely fashion or at all, and the pending sale may be disruptive to our business operations and adversely affect our profitability.

• If the pending sale of the Family Dollar business is completed, we may not achieve the anticipated benefits of the transaction, and the transaction may expose us to new risks.

• We have incurred losses due to impairment of goodwill and other long-lived assets.

• We make estimates and assumptions in connection with the preparation of our consolidated financial statements, and any changes to those estimates and assumptions could adversely affect our results of operations.

• We rely on computer and technology systems in our operations, and any material failure, inadequacy, interruption or security failure of those systems, including because of a cyberattack, could harm our ability to effectively operate and grow our business and could adversely affect our financial results.

• The potential unauthorized access to our systems could disrupt operations or lead to the theft of data which may violate privacy laws and could damage our business reputation, subject us to negative publicity, litigation and costs, and adversely affect our results of operations or financial condition.

• Legal proceedings may adversely affect our reputation and business, and higher costs related to reimbursing, settling, or litigating claims may impact our results of operations or financial condition.

• Legal proceedings may adversely affect our reputation, business, results of operations or financial condition.

• Our failure to comply with applicable law, or to adequately respond to changes to such laws, could increase our expenses, expose us to legal risks or otherwise adversely affect us.

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Thus, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not our responsibility.

We are a leading operator of more than 16,500 retail discount stores and conduct our operations through two reporting segments.

Our Dollar Tree segment is the leading operator of discount variety stores offering merchandise predominantly at the opening price point of $1.25, with additional offerings at higher price points.

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

We are a leading operator of more than 9,000 retail discount stores, as of May 3, 2025, offering merchandise predominantly at the opening price point of $1.25, with additional offerings at higher price points.

Our net sales are derived from the sale of merchandise.

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We include sales from stores expanded, relocated or remodeled during the period in the calculation of comparable store net sales, which has the effect of increasing our comparable store net sales.

Stores that have been re-bannered (i.e., Family Dollar stores converted to Dollar Tree stores, or vice versa) are considered to be new stores and are not included in the calculation of the comparable store net sales change until after the first fifteen months of operation under the new brand.

Sales that are excluded from the calculation of comparable store net sales are referred to as non-comparable store sales and consist of sales from new stores open fifteen months or less and stores that are closed permanently or expected to be closed for more than 90 days.

Stores that were converted from Family Dollar stores to Dollar Tree stores are considered to be new stores and are not included in the calculation of the comparable store net sales change until after the first fifteen months of operation under the Dollar Tree brand.

Additionally, sales that are excluded from the calculation of comparable store net sales are referred to as non-comparable store sales and consist of sales from new stores open fifteen months or less and stores that are closed permanently or expected to be closed for more than 90 days.

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.

Net proceeds are estimated to total approximately $800 million.

The transaction is expected to close in the second quarter of fiscal 2025.

The results of Family Dollar are presented as discontinued operations in the accompanying unaudited Condensed Consolidated Income Statements for all periods presented.

The assets and liabilities of Family Dollar have been reflected as assets and liabilities of discontinued operations in the accompanying unaudited Condensed Consolidated Balance Sheets for all periods presented.

Unless otherwise noted, all amounts, percentages and discussions below reflect only the results of operations and financial condition of our continuing operations.

Refer to “Strategic Initiatives and Recent Developments” below and Note 10 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information on discontinued operations.

Quarterly Results

Financial highlights for the 13 weeks ended November 2, 2024, as compared to the 13 weeks ended October 28, 2023, include:

• Net sales increased 3.5% to $7,561.7 million, primarily due to a 1.8% enterprise-wide comparable store net sales increase.

• Gross profit, as a percentage of net sales, increased 120 basis points to 30.9%, primarily due to lower freight costs and improved shrink results in relation to accruals, partially offset by increased distribution costs.

• Selling, general and administrative expenses, as a percentage of total revenues, increased 90 basis points to 26.6%, primarily due to higher depreciation expense from store investments, higher professional fees related to the review of Family Dollar strategic alternatives, temporary labor on the Dollar Tree segment to support our multi-price rollout, higher utilities costs, and loss of leverage from the low single-digit comparable store net sales increase.

• Operating income, as a percentage of total revenues, increased 30 basis points to 4.4%.

• The effective tax rate was 23.7%, an increase of 190 basis points as compared to the prior year quarter, resulting primarily from lower Work Opportunity Tax Credits.

• Net income was $233.3 million, or $1.08 per diluted share, compared to $212.0 million, or $0.97 per diluted share in the prior year quarter.

At November 2, 2024, we operated stores in 48 states and the District of Columbia, as well as stores in five Canadian provinces.

The average size of stores opened during the 39 weeks ended November 2, 2024 was approximately 11,050 selling square feet for the Dollar Tree segment and 8,850 selling square feet for the Family Dollar segment.

A breakdown of store counts and square footage by segment for the 39 weeks ended November 2, 2024 and October 28, 2023 is as follows:

Financial highlights for the 13 weeks ended May 3, 2025, as compared to the 13 weeks ended May 4, 2024, include:

• Net sales increased 11.3% to $4,636.5 million due to a 5.4% comparable store net sales increase and net sales of $345.3 million at non-comparable stores.

• Gross profit increased 11.7% to $1,649.5 million primarily due to our net store growth.

Gross profit, as a percentage of net sales, increased 20 basis points to 35.6%.

• Selling, general and administrative expenses, as a percentage of total revenues, increased 100 basis points to 27.3%.

• Operating income, as a percentage of total revenues, decreased 90 basis points to 8.3%.

• The effective tax rate was 25.9%, an increase of 130 basis points as compared to the prior year quarter.

• Income from continuing operations was $313.5 million, or $1.47 per diluted share, compared to $267.7 million, or $1.23 per diluted share in the prior year quarter.

Store Activity & Selected Sales Data

At May 3, 2025, we operated stores in 48 states and the District of Columbia, as well as stores in five Canadian provinces.

The average size of stores opened during the 13 weeks ended May 3, 2025 was approximately 8,910 selling square feet.

A breakdown of the changes in store count and square footage is as follows:

13 Weeks Ended

November 2, 2024 October 28, 2023

Dollar Tree Family Dollar Total Dollar Tree Family Dollar Total

May 3, 2025 May 4, 2024

Beginning 8,881 8,415

New stores 148 116

Re-bannered stores 8 (14) (6) 5 (10) (5)

Stores converted from Family Dollar 5 5

Closings (18) (16)

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New stores 1.3 1.1

Re-bannered stores*

0.1 (0.1) — — — —

Stores converted from Family Dollar*

Closings (0.2) (0.1)

— 0.1 0.1 — 0.2 0.2

Ending 79.6 74.1

*Selling square footage impact of re-bannered or relocated stores is only provided if it equals or exceeds 0.1 million selling square feet.

*Selling square footage impact of converted stores is only provided if it equals or exceeds 0.1 million selling square feet.

The store counts above do not include new stores until they are opened for sales.

Stores are included as re-banners when they close or open, respectively.

During the fourth quarter of fiscal 2023, we initiated a comprehensive store portfolio optimization review, including identifying stores as candidates for closure, re-bannering, or relocation.

See the “Strategic Initiatives and Recent Developments” section below for additional detail.

The percentage change in comparable store net sales for the 13 and 39 weeks ended November 2, 2024, as compared with the preceding year, is as follows:

13 Weeks Ended November 2, 2024

39 Weeks Ended November 2, 2024

Sales Growth Change in

Customer Traffic Change in

Average Ticket Sales Growth Change in

Customer Traffic Change in

Average Ticket

Consolidated 1.8% 1.6% 0.2% 1.2% 1.6% (0.5)%

Dollar Tree Segment 1.8% 1.5% 0.3% 1.6% 1.9% (0.3)%

Family Dollar Segment 1.9% 1.8% —% 0.6% 1.2% (0.5)%

Comparable store net sales are positively affected by our expanded, relocated and remodeled stores, which we include in the calculation, and are negatively affected when we open new stores, re-banner stores or expand stores near existing stores.

Similarly, stores converted from a Family Dollar store to a Dollar Tree store are reflected in the table above when they re-opened as a Dollar Tree store.

The percentage change in comparable store net sales, as compared with the preceding year, is as follows:

13 Weeks Ended

May 3, 2025 May 4, 2024

Sales Growth 5.4% 1.7%

Change in Customer Traffic 2.5% 2.8%

Change in Average Ticket 2.8% (1.1)%

Net sales per selling square foot is calculated based on total net sales for the preceding 12 months as of the end of the reporting period divided by the average selling square footage during the period.

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We believe that net sales per selling square foot more accurately depicts the productivity and operating performance of our stores as it reflects the portion of our footprint that is dedicated to selling merchandise.

Net sales per selling square foot for the 52 weeks ended November 2, 2024 and October 28, 2023 is as follows:

Net sales per selling square foot for the 52 weeks ended May 3, 2025 and May 4, 2024 is as follows:

52 Weeks Ended

November 2, 2024 October 28, 2023

Dollar Tree Family Dollar Total Dollar Tree Family Dollar Total

May 3, 2025 May 4, 2024

Net sales per selling square foot $235 $235

For the 52 weeks ended November 2, 2024, Family Dollar’s net sales per selling square foot includes net sales for the stores that were closed in connection with the store portfolio optimization review in the numerator of the calculation, but the related selling square footage as of November 2, 2024 is excluded from the denominator of the calculation which represents the average selling square footage for the 52-week period.

See our “Strategic Initiatives and Recent Developments” below for more information on the initiatives that are driving our comparable store net sales growth and net sales per selling square foot growth.

Strategic Initiatives and Recent Developments

We continue to execute on a number of strategic initiatives across the Dollar Tree and Family Dollar segments to drive productive sales growth, improve operating efficiency, invest in technology, and expand our culture of service to our associates.

These initiatives include, among others, the following.

We continue to execute on a number of strategic initiatives to drive productive sales growth, improve operating efficiency, invest in technology, and expand our culture of service to our associates.

These initiatives include, among others, and in no particular order, the following.

Dollar Tree Merchandising.

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 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 at varying price points.

As of November 2, 2024, we have expanded our multi-price assortment in approximately 2,300 stores.

99 Cents Only Stores Acquisition.

During the second quarter of fiscal 2024, we acquired designation rights for up to 170 leases of 99 Cents Only Stores across Arizona, California, Nevada and Texas.

The designation rights were acquired following the bankruptcy of 99 Cents Only Stores, which provided us an attractive opportunity to secure leases in priority markets.

We secured the leases for 164 of these stores and substantially all have opened under our Dollar Tree segment.

Family Dollar Merchandising.

Our store design initiatives at Family Dollar 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 optimized layout and expanded frozen and refrigerated doors;

larger rural stores where assortments may include Dollar Tree product;

and XSB (Extra Small Box), which adds elements of H2.5 optimized to our smaller stores, particularly in urban markets.

As of November 2, 2024, we have more than 2,180 stores across these three formats.

Across all of Family Dollar’s formats we are expanding our SKUs, continuing to add cooler doors, increasing our standard shelf height presentation, updating in-store signage, implementing planogram and category resets and updating our pricing strategy.

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.

Store Portfolio Optimization and Family Dollar Strategic Alternatives Reviews.

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 the portfolio optimization review, we identified 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.

As of November 2, 2024, we have closed approximately 670 stores identified under the portfolio optimization review and expect to close an additional 25 during the remainder of fiscal 2024.

During the second quarter of fiscal 2024, we announced that we had initiated a formal review of strategic alternatives for the Family Dollar business segment, which could include among others, a potential sale, spin-off or other disposition of the business.

We continue to progress in our strategic review to position Family Dollar in an optimal ownership structure.

There is not a set deadline or definitive timetable for the completion of the strategic alternatives review process, and there can be no assurance that this process will result in any transaction or particular outcome.

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.

As of May 3, 2025, we had more than 3,520 multi-price format stores.

Tariffs and Other Trade Measures.

Beginning in the first quarter of 2025, new tariffs were announced on imports to the U.S.

Tariffs”), including additional tariffs on imports from China, Mexico, Canada and other countries from which we import goods.

In response, several countries have imposed, or threatened to impose, reciprocal tariffs on imports from the U.S.

and other retaliatory measures.

Various modifications and delays to the U.S.

Tariffs have been announced and further changes are expected to be made in the future, which may include additional sector-based tariffs or other measures.

We are actively implementing mitigation strategies to offset the impact of cost inflation including tariffs as noted above, by negotiating lower product costs, rebates or invoice deductions with our suppliers, shifting supply sources to alternate countries, changing our product assortment or discontinuing certain items, or increasing our prices.

We believe our mitigation strategies will allow us to protect our margins and maintain our competitiveness over the long term and, most importantly, keep providing our customers with the value, convenience, and discovery they expect for the products they need to help live and celebrate their lives.

However, we expect our results to be impacted by near-term challenges, including higher costs due to the volatility in effective tariffs in the second quarter of fiscal 2025.

Additionally, implementation costs associated with our mitigation strategies may be experienced before the benefits from those efforts are expected to materialize.

The ultimate impact of cost inflation including tariffs and other related measures remains uncertain and will depend on several factors, including whether additional or incremental U.S.

Tariffs or other measures are announced or imposed, to what extent other countries implement tariffs or other retaliatory measures in response, the overall magnitude and duration of these measures, and the costs and effectiveness of, and consumer response to, our mitigation efforts.

Our Workforce & Our Workplace.

Across both of our segments, we are investing in our talent, including initiatives to provide competitive pay and benefits, enhanced training, and attractive career opportunities to deliver an enhanced associate experience, reduce turnover, and improve our store standards and efficiencies and ultimately the customer experience.

We are investing in our talent, including initiatives to provide competitive pay and benefits, enhanced training, and attractive career opportunities to deliver an enhanced associate experience, reduce turnover, and improve our store standards and efficiencies and ultimately the customer experience.

Additional initiatives include projects to optimize and modernize our stores, with a focus on improving the in-store experience through renovations and customer service enhancements.

Supply Chain Optimization .

Our supply chain initiatives include enhancing our distribution and transportation network, including investments in our truck fleet, transportation management systems, a new distribution center with enhanced automation to improve efficiency, and a new RotaCart delivery process to streamline the truck unloading and store delivery process.

Our supply chain initiatives include expanding and enhancing our distribution and transportation network, including investments in our truck fleet, transportation management systems, a new distribution center with enhanced automation to improve efficiency, and a new RotaCart delivery process to streamline the truck unloading and store delivery process.

Significant investments are also underway to improve climate control conditions in our distribution centers.

These investments are expected to negatively impact gross margin in the near-to-mid term.

Technology Investment.

We continue our multi-year plan for significant investment in our technology across our business, including our mobile apps, store systems, merchandising and supply chain.

We continue our multi-year plan for significant investment in our technology across our business, including our mobile apps, human capital management system and supply chain system.

We believe these improvements can promote operational efficiencies and deliver an elevated customer experience.

Marietta, Oklahoma Distribution Center.

On April 28, 2024, a tornado destroyed our Dollar Tree distribution center in Marietta, Oklahoma.

In the first quarter of fiscal 2024, a tornado destroyed our distribution center in Marietta, Oklahoma.

Based on the significant damage sustained by the facility, the inventory contained in the facility and the facility itself are not salvageable.

We have pivoted our supply chain network to deliver products to the approximately 600 Marietta-serviced Dollar Tree stores, and we expect that these efforts will limit disruption to the Dollar Tree shopping experience.

We have pivoted our supply chain network to deliver products to the approximately 600 Marietta-serviced stores, and we believe these efforts have limited and will continue to limit disruption to the Dollar Tree shopping experience.

Such efforts included the conversion of the West Memphis Family Dollar distribution center to a Dollar Tree distribution center in the third quarter of fiscal 2024, and the expected conversion of the Odessa, Texas Family Dollar distribution center to a Dollar Tree distribution center in the second quarter of fiscal 2025.

We are incurring additional costs within our supply chain as a result of servicing these impacted stores, including additional stem miles for delivered product and outside storage, and expect such costs to continue negatively impacting gross margin in the near-to-mid term.

General Liability Claims Development.

Our self-insured general liability claims related to customer accidents and other incidents at our stores continue to develop unfavorably due to the rising costs to reimburse, settle, or litigate the claims.

As a result, our actuarially determined liabilities were increased during the second quarter, contributing to a $64.3 million increase in our general liability claim expenses compared to the prior year second quarter.

This increase was comprised of a $45.3 million increase in the Dollar Tree segment and a $19.0 million increase in the Family Dollar segment.

The liabilities related to our self-insurance programs, which include general liability claims, are estimates that require judgment and the use of assumptions.

Refer to our “Critical Accounting Estimates and Assumptions” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for more information on the estimates and assumptions related to these liabilities.

Such estimates are inherently uncertain, and future changes in claim trends and assumptions could result in significant adjustments to our liabilities, which could materially and adversely affect our results of operations.

In April 2025, we announced that we will be returning to Marietta, Oklahoma with a new, enhanced distribution center that is expected to be fully operational by spring 2027 with the capacity to serve 700 stores across the West and Southwest regions of the country.

Family Dollar Strategic Alternatives Review.

During the second quarter of fiscal 2024, we announced that we had initiated a formal review of strategic alternatives for the Family Dollar business, which could have included among others, a potential sale, spin-off or other disposition of the business.

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

As a result, we concluded the Family Dollar business met the held for sale and

discontinued operations accounting criteria.

On March 25, 2025, we 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.

Net proceeds are estimated to total approximately $800 million.

The transaction is expected to close in the second quarter of fiscal 2025.

For information on discontinued operations, refer to Note 1 0 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q .

Results of Operations

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Gross profit margin is calculated as gross profit (i.e., net sales less cost of sales) divided by net sales.

The selling, general and administrative expense rate, operating income margin and net income margin are calculated by dividing the applicable amount by total revenue.

The selling, general and administrative expense rate and operating income margin are calculated by dividing the applicable amount by total revenue.

Basis points, as referred to below, are a percentage of net sales for expense categories within gross profit and cost of sales, and are a percentage of total revenue for all other expense categories.

A 100 basis point increase equals 1.00% and a 1 basis point increase equals 0.01%.

The following table contains results of operations data for the 13 and 39 weeks ended November 2, 2024 and October 28, 2023:

13 Weeks Ended 39 Weeks Ended

The following table contains results of operations data for the 13 weeks ended May 3, 2025 and May 4, 2024:

13 Weeks Ended

(in millions, except percentages)

November 2, 2024 October 28, 2023 November 2, 2024 October 28, 2023

May 3, 2025 May 4, 2024

Net sales $ 4,636.5 $ 4,165.6

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Interest expense, net 22.7 26.7

Other expense, net 0.1 0.2 0.2 0.2

Income before income taxes 305.8 271.1 876.1 928.5

Other (income) expense, net (61.7) 0.1

Income from continuing operations before income taxes 423.1 355.1

Provision for income taxes 109.6 87.4

Net income $ 233.3 $ 212.0 $ 665.8 $ 711.4

Income from continuing operations $ 313.5 $ 267.7

Gross profit margin

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Interest expense, net as a percentage of total revenue

0.4 % 0.4 % 0.4 % 0.4 %

Income before income taxes as percentage of total revenue 4.0 % 3.7 % 3.9 % 4.2 %

Income from continuing operations before income taxes as a percentage of total revenue 9.1 % 8.5 %

Effective tax rate

25.9 % 24.6 %

Net income margin 3.1 % 2.9 % 2.9 % 3.2 %

13 Weeks Ended 39 Weeks Ended

(dollars in millions) November 2, 2024 October 28, 2023 Percentage Change November 2, 2024 October 28, 2023 Percentage Change

Income from continuing operations as a percentage of total revenue 6.8 % 6.4 %

13 Weeks Ended

(dollars in millions) May 3, 2025 May 4, 2024 Percentage Change

Net sales $ 4,636.5 $ 4,165.6 11.3 %

Comparable store net sales change 5.4 % 1.7 %

The increase in net sales in the 13 weeks ended November 2, 2024 was a result of comparable store net sales increases in the Dollar Tree and Family Dollar segments, and net sales of $401.4 million at non-comparable stores.

The increase was partially offset by lower sales on the Family Dollar segment resulting from approximately 670 stores closed under the portfolio optimization review since the same period last year.

Enterprise comparable store net sales increased 1.8% in the 13 weeks ended November 2, 2024, as a result of a 1.6% increase in customer traffic and a 0.2% increase in average ticket.

Comparable store net sales increased 1.8% in the Dollar Tree segment and increased 1.9% in the Family Dollar segment.

The low single-digit comparable store net sales increase was primarily impacted by the macro economic environment which continues to affect our customers due to the impact of inflationary pressures and higher interest rates.

We expect these sales trends, and the resulting negative impact on operating income, to continue for the remainder of fiscal 2024.

The increase in net sales in the 39 weeks ended November 2, 2024 was a result of comparable store net sales increases in the Dollar Tree and Family Dollar segments, and net sales of $1.3 billion at non-comparable stores.

The increase was partially offset by lower sales on the Family Dollar segment resulting from approximately 670 stores closed under the portfolio optimization review since the same period last year.

For the 39 weeks ended November 2, 2024, net sales at non-comparable stores included $200.0 million from the Family Dollar stores that were closed under the portfolio optimization review in the first three quarters of this year.

Enterprise comparable store net sales increased 1.2% in the 39 weeks ended November 2, 2024, as a result of a 1.6% increase in customer traffic, partially offset by a 0.5% decrease in average ticket.

Comparable store net sales increased 1.6% in the Dollar Tree segment and 0.6% in the Family Dollar segment.

13 Weeks Ended 39 Weeks Ended

(dollars in millions) November 2, 2024 October 28, 2023 Percentage Change November 2, 2024 October 28, 2023 Percentage Change

The increase in net sales in the 13 weeks ended May 3, 2025 was a result of the comparable store net sales increase and net sales of $345.3 million at non-comparable stores.

Comparable store net sales increased 5.4% in the 13 weeks ended May 3, 2025, as a result of a 2.8% increase in average ticket and a 2.5% increase in customer traffic.

13 Weeks Ended

(dollars in millions) May 3, 2025 May 4, 2024 Percentage Change

Gross profit $ 1,649.5 $ 1,476.5 11.7 %

Gross profit margin 35.6 % 35.4 % 0.2 %

Gross profit margin increased during the 13 weeks ended November 2, 2024 due to a 120 basis point decrease in cost of sales.

The cost of sales rate decreased to 69.1% during the 13 weeks ended November 2, 2024 from 70.3% during the same period last year primarily due to lower freight costs and improved shrink results in relation to accruals, partially offset by increased distribution costs.

Gross profit margin increased during the 39 weeks ended November 2, 2024 due to an 80 basis point decrease in cost of sales.

The cost of sales rate decreased to 69.4% during the 39 weeks ended November 2, 2024 from 70.2% during the same period last year primarily due to lower freight costs, partially offset by increased sales of higher cost consumable merchandise and higher distribution costs.

Gross profit margin increased during the 13 weeks ended May 3, 2025 due to a 20 basis point decrease in cost of sales.

The cost of sales rate decreased to 64.4% during the 13 weeks ended May 3, 2025 from 64.6% during the same period last year primarily due to lower freight costs, improved mark-on and lower occupancy costs due to leverage from the comparable store net sales increase, partially offset by increased distribution costs, shrink costs and markdown costs.

Selling, General and Administrative Expenses

13 Weeks Ended 39 Weeks Ended

(dollars in millions) November 2, 2024 October 28, 2023 Percentage Change November 2, 2024 October 28, 2023 Percentage Change

13 Weeks Ended

(dollars in millions) May 3, 2025 May 4, 2024 Percentage Change

Selling, general and administrative

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expense rate 27.3 % 26.3 % 1.0 %

The selling, general and administrative expense rate increased 90 basis points during the 13 weeks ended November 2, 2024 primarily due to higher depreciation expense from store investments, higher professional fees related to the review of Family Dollar strategic alternatives, temporary labor on the Dollar Tree segment to support our multi-price rollout, higher utilities costs, and loss of leverage from the low single-digit comparable store net sales increase.

The selling, general and administrative expense rate increased 120 basis points during the 39 weeks ended November 2, 2024 primarily due to higher depreciation expense from store investments, unfavorable development of general liability claims, temporary labor on the Dollar Tree segment to support our multi-price rollout, higher utilities costs, and loss of leverage from the low single-digit comparable store net sales increase.

The increases were partially offset by a decrease in legal costs as the prior year included a $30.0 million accrual for DC 202-related legal matters on the Family Dollar segment.

The selling, general and administrative expense rate increased 100 basis points during the 13 weeks ended May 3, 2025 primarily due to higher depreciation expense from store investments, higher store payroll from wage increases, higher general liability claims costs, and higher utilities costs, partially offset by lower stock compensation, lower temporary labor needed to support our multi-price rollout, and leverage from the comparable store net sales increase.

Operating Income

13 Weeks Ended 39 Weeks Ended

(dollars in millions) November 2, 2024 October 28, 2023 Percentage Change November 2, 2024 October 28, 2023 Percentage Change

13 Weeks Ended

(dollars in millions) May 3, 2025 May 4, 2024 Percentage Change

Operating income $ 384.1 $ 381.9 0.6 %

Operating income margin 8.3 % 9.2 % (0.9) %

Operating income margin increased to 4.4% for the 13 weeks ended November 2, 2024 compared to 4.1% for the same period last year, resulting from the increase in gross profit margin, partially offset by the increase in the selling, general and administrative expense rate, as described above.

Operating income margin decreased to 4.2% for the 39 weeks ended November 2, 2024 compared to 4.6% for the same period last year, resulting from the increase in the selling, general and administrative expense rate, partially offset by the increase in gross profit margin, as described above.

Operating income margin decreased to 8.3% for the 13 weeks ended May 3, 2025 compared to 9.2% for the same period last year, resulting from the increase in the selling, general and administrative expense rate, partially offset by the increase in gross profit margin as described above.

Interest Expense, Net

13 Weeks Ended 39 Weeks Ended

(dollars in millions) November 2, 2024 October 28, 2023 Percentage Change November 2, 2024 October 28, 2023 Percentage Change

13 Weeks Ended

(dollars in millions) May 3, 2025 May 4, 2024 Percentage Change

Interest expense, net $ 22.7 $ 26.7 (15.0) %

Interest expense, net decreased $2.9 million in the 13 weeks ended November 2, 2024 compared to the same period last year, primarily due to an increase in interest income resulting from higher invested cash.

Interest expense, net increased $0.3 million in the 39 weeks ended November 2, 2024 compared to the same period last year, primarily due to higher interest incurred for short-term borrowings under our commercial paper program.

Interest expense, net decreased $4.0 million in the 13 weeks ended May 3, 2025 compared to the same period last year, primarily due to higher interest income on investments.

Other (Income) Expense, Net

13 Weeks Ended

(dollars in millions) May 3, 2025 May 4, 2024 Percentage Change

Other (income) expense, net $ (61.7) $ 0.1 (61,800.0) %

Other income, net was $61.7 million in the 13 weeks ended May 3, 2025 compared to expense of $0.1 million in the same period last year, primarily due to an insurance gain of approximately $62.0 million recognized in the first quarter of fiscal 2025 for the excess of the insurance proceeds received over the losses incurred for damaged property and equipment and damaged inventory associated with the tornado that destroyed our Marietta, Oklahoma Dollar Tree distribution center.

Provision for Income Taxes

13 Weeks Ended 39 Weeks Ended

(dollars in millions) November 2, 2024 October 28, 2023 Percentage Change November 2, 2024 October 28, 2023 Percentage Change

13 Weeks Ended

(dollars in millions) May 3, 2025 May 4, 2024 Percentage Change

Provision for income taxes $ 109.6 $ 87.4 25.4 %

Effective tax rate 25.9 % 24.6 % 1.3 %

The effective tax rate was 23.7% for the 13 weeks ended November 2, 2024 compared to 21.8% for the comparable prior year period, resulting primarily from lower Work Opportunity Tax Credits.

The effective tax rate was 24.0% for the 39 weeks ended November 2, 2024 compared to 23.4% for the comparable prior year period, resulting primarily from higher tax expense in the current year related to restricted stock vesting and lower Work Opportunity Tax Credits, partially offset by lower non-deductible expenses.

Segment Information

Our operating results for the Dollar Tree and Family Dollar segments and period-over-period changes are discussed in the following sections.

The following table summarizes the operating results of the Dollar Tree segment:

13 Weeks Ended 39 Weeks Ended

(dollars in millions) November 2, 2024 October 28, 2023 Percentage Change November 2, 2024 October 28, 2023 Percentage Change

Net sales $ 4,338.0 $ 4,003.8 8.3 % $ 12,569.1 $ 11,808.9 6.4 %

Gross profit 1,534.1 1,393.8 10.1 % 4,401.9 4,075.7 8.0 %

Gross profit margin 35.4 % 34.8 % 0.6 % 35.0 % 34.5 % 0.5 %

Operating income $ 465.2 $ 482.7 (3.6) % $ 1,329.5 $ 1,416.2 (6.1) %

Operating income margin 10.7 % 12.1 % (1.4) % 10.6 % 12.0 % (1.4) %

Net sales for the Dollar Tree segment increased $334.2 million, or 8.3%, during the 13 weeks ended November 2, 2024 compared to the same period last year due to an increase in comparable store net sales of 1.8%, and net sales of $296.7 million at non-comparable stores.

Customer traffic increased 1.5% and average ticket increased 0.3%.

Net sales for the Dollar Tree segment increased $760.2 million, or 6.4%, during the 39 weeks ended November 2, 2024 compared to the same period last year due to an increase in comparable store net sales of 1.6%, and net sales of $707.0 million at non-comparable stores.

Customer traffic increased 1.9% and average ticket decreased 0.3%.

Gross profit margin in the Dollar Tree segment increased to 35.4% during the 13 weeks ended November 2, 2024 from 34.8% during the same period last year due to a 60 basis point decrease in cost of sales.

The cost of sales rate decreased to 64.6% during the 13 weeks ended November 2, 2024 from 65.2% during the same period last year primarily due to lower freight costs, partially offset by increased markdown costs for slow moving items, higher distribution costs, increased sales of higher cost consumable merchandise, and increased occupancy costs resulting from the loss of leverage from the low single-digit comparable store net sales increase.

Gross profit margin in the Dollar Tree segment increased to 35.0% during the 39 weeks ended November 2, 2024 from 34.5% during the same period last year due to a 50 basis point decrease in cost of sales.

The cost of sales rate decreased to 65.0% during the 39 weeks ended November 2, 2024 from 65.5% during the same period last year primarily due to lower freight costs, partially offset by increased sales of higher cost consumable merchandise, higher distribution costs, increased occupancy costs resulting from the loss of leverage from the low single-digit comparable store net sales increase, increased markdown costs for slow moving items, and increased shrink costs resulting from unfavorable inventory results.

Operating income margin for the Dollar Tree segment decreased to 10.7% during the 13 weeks ended November 2, 2024 from 12.1% during the same period last year as a result of an increase in the selling, general and administrative expense rate, partially offset by the gross profit margin increase noted above.

The selling, general and administrative expense rate increased 180 basis points primarily due to higher depreciation expense from store investments, temporary labor to support our multi-price rollout, higher utilities costs, and loss of leverage from the low single-digit comparable store net sales increase.

Operating income margin for the Dollar Tree segment decreased to 10.6% during the 39 weeks ended November 2, 2024 from 12.0% during the same period last year as a result of an increase in the selling, general and administrative expense rate, partially offset by the gross profit margin increase noted above.

The selling, general and administrative expense rate increased 190 basis points primarily due to higher depreciation expense from store investments, unfavorable development of general liability claims, temporary labor to support our multi-price rollout, higher utilities costs, and loss of leverage from the low single-digit comparable store net sales increase.

Family Dollar

The following table summarizes the operating results of the Family Dollar segment:

13 Weeks Ended 39 Weeks Ended

(dollars in millions) November 2, 2024 October 28, 2023 Percentage Change November 2, 2024 October 28, 2023 Percentage Change

Net sales $ 3,223.7 $ 3,305.3 (2.5) % $ 9,991.7 $ 10,139.8 (1.5) %

Gross profit 803.3 779.2 3.1 % 2,497.7 2,462.4 1.4 %

Gross profit margin 24.9 % 23.6 % 1.3 % 25.0 % 24.3 % 0.7 %

Operating income (loss) $ 1.6 $ (66.3) (102.4) % $ 23.9 $ (45.7) (152.3) %

Operating income (loss) margin — % (2.0) % 2.0 % 0.2 % (0.5) % 0.7 %

Net sales for the Family Dollar segment decreased $81.6 million, or 2.5%, during the 13 weeks ended November 2, 2024 compared to the same period last year resulting from approximately 670 stores closed under the portfolio optimization review since the same period last year, partially offset by an increase in comparable store net sales of 1.9%.

Net sales at non-comparable stores totaled $104.7 million.

Customer traffic increased 1.8% and average ticket was flat.

Net sales for the Family Dollar segment decreased $148.1 million, or 1.5%, during the 39 weeks ended November 2, 2024 compared to the same period last year resulting from approximately 670 stores closed under the portfolio optimization review since the same period last year, partially offset by an increase in comparable store net sales of 0.6%.

Net sales at non-comparable stores totaled $579.5 million and included $200.0 million of sales from the stores that were closed under the portfolio optimization review in the first three quarters of this year.

Customer traffic increased 1.2% and average ticket decreased 0.5%.

Gross profit margin in the Family Dollar segment increased to 24.9% during the 13 weeks ended November 2, 2024 from 23.6% during the same period last year due to a 130 basis point decrease in cost of sales.

The cost of sales rate decreased to 75.1% during the 13 weeks ended November 2, 2024 from 76.4% during the same period last year primarily due to lower freight costs, lower markdown costs resulting from a voluntary retail-level product recall in the prior year quarter and higher allowances for promotional activity in the current quarter, improved shrink results in relation to accruals and lower occupancy costs resulting from the store closures in connection with the portfolio optimization review, partially offset by higher distribution costs.

Gross profit margin in the Family Dollar segment increased to 25.0% during the 39 weeks ended November 2, 2024 from 24.3% during the same period last year due to a 70 basis point decrease in cost of sales.

The cost of sales rate decreased to 75.0% during the 39 weeks ended November 2, 2024 from 75.7% during the same period last year primarily due to lower freight costs and lower occupancy costs resulting from the store closures in connection with the portfolio optimization review, partially offset by higher distribution costs.

Operating income (loss) margin for the Family Dollar segment increased to 0.0% during the 13 weeks ended November 2, 2024 from (2.0)% during the same period last year as a result of the gross profit margin increase noted above and a decrease in the selling, general and administrative expense rate.

The selling, general and administrative expense rate decreased 70 basis points primarily due to lower store payroll, lower store supplies expenses, and lower repairs and maintenance expenses, partially offset by higher professional fees related to the review of Family Dollar strategic alternatives, higher depreciation expense from store investments and the loss of leverage from the low single-digit comparable store net sales increase.

Operating income (loss) margin for the Family Dollar segment increased to 0.2% during the 39 weeks ended November 2, 2024 from (0.5)% during the same period last year as a result of the gross profit margin increase noted above.

The selling, general and administrative expense rate remained unchanged compared to the same period last year as higher depreciation expense from store investments, unfavorable development of general liability claims, higher professional fees related to the review of Family Dollar strategic alternatives, and the loss of leverage from the low single-digit comparable store net sales increase was offset by a decrease in legal costs, lower store payroll, and lower store supplies expenses.

The prior year included a $30.0 million accrual for DC 202-related legal matters.

The effective tax rate was 25.9% for the 13 weeks ended May 3, 2025 compared to 24.6% for the comparable prior year period, primarily due to reduced benefits from the vesting of share-based payment awards.

Liquidity and Capital Resources

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We have satisfied our seasonal working capital requirements for existing and new stores and have funded our distribution network programs and other capital projects from internally generated funds and borrowings under our credit facilities and commercial paper program.

The following table compares cash flow-related information for the 39 weeks ended November 2, 2024 and October 28, 2023:

The following table compares our cash flows for the 13 weeks ended May 3, 2025 and May 4, 2024:

13 Weeks Ended

(in millions) November 2, 2024 October 28, 2023

(in millions) May 3, 2025 May 4, 2024

Net cash provided by (used in):

Operating activities $ 1,788.2 $ 1,429.6

Investing activities (1,359.1) (1,322.3)

Financing activities (412.9) (301.9)

Net cash provided by operating activities increased $358.6 million primarily due to an increase in accounts payable and higher current year earnings, excluding non-cash items, partially offset by increasing inventory levels and decreases in accrued liabilities.

Net cash used in investing activities increased $36.8 million primarily due to higher capital expenditures, partially offset by insurance recoveries related to damaged property and equipment at our Dollar Tree distribution center in Marietta, Oklahoma as discussed in Note 3 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q .

Net cash used in financing activities increased $111.0 million primarily due to lower net borrowings under our commercial paper program, partially offset by lower stock repurchases.

At November 2, 2024, our long-term borrowings were $3.45 billion, of which $1.0 billion matures in May 2025, and we had $1.5 billion available under our Revolving Credit Facility, less amounts outstanding for standby letters of credit totaling $4.1 million.

Operating activities of continuing operations $ 378.5 $ 505.2

Investing activities of continuing operations (198.9) (316.7)

Financing activities of continuing operations (439.4) (287.8)

Net cash provided by operating activities decreased $126.7 million primarily due to a decrease in accounts payable, partially offset by higher income tax accruals and other changes in accrued liabilities.

Net cash used in investing activities decreased $117.8 million primarily due to lower capital expenditures and $50.0 million of insurance recoveries related to damaged property and equipment at our Dollar Tree distribution center in Marietta, Oklahoma as discussed in Note 3 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Net cash used in financing activities increased $151.6 million primarily due to higher stock repurchases.

At May 3, 2025, our long-term borrowings were $3.45 billion, including $1.0 billion 4.00% Senior Notes maturing on May 15, 2025.

Additionally, we had $1.5 billion available under our new Five-Year Credit Facility, less amounts outstanding for standby letters of credit totaling $3.8 million, and $1.0 billion available under our 364-Day Revolving Credit Facility.

Refer to Note 4 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further discussion of the new Five-Year Credit Facility and 364-Day Revolving Credit Facility.

We also have a commercial paper program under which we may issue unsecured commercial paper notes up to an aggregate amount outstanding at any time of $1.5 billion.

As of November 2, 2024, there were no commercial paper notes outstanding.

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

We issued and repaid $3.2 billion of commercial paper notes during the 39 weeks ended November 2, 2024 and incurred interest expense of $3.9 million related to these notes.

Additionally, we have $250.0 million in trade letters of credit with various financial institutions, under which $3.6 million was committed to letters of credit issued for routine purchases of imported merchandise as of November 2, 2024.

We repurchased 3,283,837 and 3,905,599 shares of common stock on the open market at a cost of $403.6 million and $504.3 million, including applicable excise tax, during the 39 weeks ended November 2, 2024 and October 28, 2023, respectively.

At November 2, 2024, we had $952.4 million remaining under our existing $2.5 billion Board repurchase authorization.

As of May 3, 2025, there were no commercial paper notes outstanding.

Our Five-Year Credit Facility serves as a liquidity backstop for the repayment of notes outstanding under the program.

Additionally, we have $100.0 million in trade letters of credit with various financial institutions, under which $4.3 million was committed to letters of credit issued for routine purchases of imported merchandise as of May 3, 2025.

On May 15, 2025, we leveraged our commercial paper program to redeem our $1.0 billion 4.00% Senior Notes, in addition to utilizing available cash.

As of June 2, 2025, we had $550.0 million of commercial paper notes outstanding.

We repurchased 5,926,985 and 2,537,302 shares of common stock on the open market at a cost of $436.8 million and $312.8 million, including applicable excise tax, during the 13 weeks ended May 3, 2025 and May 4, 2024, respectively.

Of the shares repurchased during the 13 weeks ended May 3, 2025 and May 4, 2024, $5.0 million and $37.8 million, respectively, settled subsequent to May 3, 2025 and May 4, 2024, respectively, and these amounts were accrued in the accompanying unaudited Condensed Consolidated Balance Sheets.

At May 3, 2025, we had $519.7 million remaining under our existing $2.5 billion Board repurchase authorization.

Subsequent to May 3, 2025, we purchased an additional 779,512 shares of common stock on the open market at a cost of $67.5 million, as of June 2, 2025.

Critical Accounting Estimates and Assumptions

Our condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

Our condensed consolidated financial statements have been prepared in accordance with U.S.

To prepare these financial statements, we must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosures of contingent assets and liabilities.

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Actual results could be significantly different from these estimates.

Refer to Note 2 of our Consolidated Financial Statements, included in our Annual Report on Form 10-K for the fiscal year ended February 3, 2024, for a summary of our significant accounting policies.

For a summary of our significant accounting policies and critical accounting estimates, refer to Note 2 of our Consolidated Financial Statements and Critical Accounting Estimates and Assumptions within Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the fiscal year ended February 1, 2025.

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 2. Management’s Discussion and Analysis