DOLLAR TREE, INC. 10-Q

Item 1. Financial Statements. DOLLAR TREE, INC. CONDENSED CONSOLIDATED INCOME STATEMENTS (Unaudited) 13 Weeks Ended (in millions, except per share data) May 3, 2025 May 4, 2024 Net sales $ 4,636.5 $ 4,165.6 Other revenue 3.2 3.3 Total revenue 4,639.7 4,168.9 Cost of sales 2,987.0 2,689.1 Selling, general and administrative expenses 1,268.6 1,097.9 Operating income 384.1 381.9 Interest expense, net 22.7 26.7 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 Income from continuing operations 313.5 267.7 Income from discontinued operations, net of tax 29.9 32.4 Net income $ 343.4 $ 300.1 Basic earnings per share of common stock: Continuing operations $ 1.47 $ 1.23 Discontinued operations 0.14 0.15 Total basic earnings per share of common stock $ 1.61 $ 1.38 Diluted earnings per share of common stock: Continuing operations $ 1.47 $ 1.23 Discontinued operations 0.14 0.15 Total diluted earnings per share of common stock $ 1.61 $ 1.38 Weighted average common shares outstanding: Basic 213.6 217.8 Diluted 213.9 218.1 See accompanying Notes to Unaudited Condensed Consolidated Financial Statements. 4 Table of Contents DOLLAR TREE, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) 13 Weeks Ended (in millions) May 3, 2025 May 4, 2024 Net income $ 343.4 $ 300.1 Foreign currency translation adjustments 5.6 ( 2.0 ) Total comprehensive income $ 349.0 $ 298.1 See accompanying Notes to Unaudited Condensed Consolidated Financial Statements. 5 Table of Contents DOLLAR TREE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in millions, except par value and share data) May 3, 2025 February 1, 2025 May 4, 2024 ASSETS Current assets: Cash and cash equivalents $ 1,007.4 $ 1,256.5 $ 390.6 Merchandise inventories 2,704.0 2,672.0 2,456.9 Other current assets 179.8 169.8 265.2 Current assets of discontinued operations 4,705.5 5,008.9 2,969.5 Total current assets 8,596.7 9,107.2 6,082.2 Restricted cash 76.7 75.7 73.2 Property, plant and equipment, net of accumulated depreciation of $ 4,483.9 , $ 4,332.3 and $ 4,233.9 , respectively 4,587.9 4,499.3 3,947.0 Operating lease right-of-use assets 4,205.6 4,146.4 3,699.9 Goodwill 422.6 421.2 422.8 Deferred income taxes, net 268.7 260.6 8.7 Other assets 133.0 133.6 98.8 Noncurrent assets of discontinued operations — — 7,777.6 Total assets $ 18,291.2 $ 18,644.0 $ 22,110.2 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ 1,000.0 $ 1,000.0 $ — Current portion of operating lease liabilities 971.3 960.7 901.4 Accounts payable 1,572.0 1,705.8 1,305.3 Income taxes payable 239.9 120.1 82.9 Other current liabilities 549.9 574.4 512.5 Current liabilities of discontinued operations 3,903.7 4,224.9 1,954.2 Total current liabilities 8,236.8 8,585.9 4,756.3 Long-term debt, net, excluding current portion 2,428.8 2,431.2 3,427.5 Operating lease liabilities, long-term 3,507.3 3,438.7 3,061.9 Deferred income taxes, net — — 902.4 Income taxes payable, long-term 27.3 28.2 22.4 Other liabilities 186.2 182.6 141.1 Noncurrent liabilities of discontinued operations — — 2,486.2 Total liabilities 14,386.4 14,666.6 14,797.8 Contingencies (Note 3) Shareholders’ equity: Common stock, par value $ 0.01 ; 600,000,000 shares authorized, 210,151,340 , 215,078,018 and 216,165,909 shares issued and outstanding, respectively 2.1 2.2 2.2 Additional paid-in capital — 92.9 — Accumulated other comprehensive loss ( 53.6 ) ( 59.2 ) ( 45.6 ) Retained earnings 3,956.3 3,941.5 7,355.8 Total shareholders’ equity 3,904.8 3,977.4 7,312.4 Total liabilities and shareholders’ equity $ 18,291.2 $ 18,644.0 $ 22,110.2 See accompanying Notes to Unaudited Condensed Consolidated Financial Statements. 6 Table of Contents DOLLAR TREE, INC. CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited) 13 Weeks Ended May 3, 2025 (in millions) Common Stock Shares Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Shareholders' Equity Balance at February 1, 2025 215.1 $ 2.2 $ 92.9 $ ( 59.2 ) $ 3,941.5 $ 3,977.4 Net income — — — — 343.4 343.4 Total other comprehensive income — — — 5.6 — 5.6 Issuance of stock under Employee Stock Purchase Plan — — 2.8 — — 2.8 Stock-based compensation, net 0.3 — 12.4 — — 12.4 Repurchase of stock ( 5.9 ) ( 0.1 ) ( 104.0 ) — ( 328.6 ) ( 432.7 ) Excise tax on repurchases of stock — — ( 4.1 ) — — ( 4.1 ) Balance at May 3, 2025 209.5 $ 2.1 $ — $ ( 53.6 ) $ 3,956.3 $ 3,904.8 13 Weeks Ended May 4, 2024 (in millions) Common Stock Shares Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Shareholders' Equity Balance at February 3, 2024 217.9 $ 2.2 $ 229.9 $ ( 43.6 ) $ 7,124.6 $ 7,313.1 Net income — — — — 300.1 300.1 Total other comprehensive loss — — — ( 2.0 ) — ( 2.0 ) Issuance of stock under Employee Stock Purchase Plan — — 3.8 — — 3.8 Exercise of stock options — — 0.1 — — 0.1 Stock-based compensation, net 0.3 — 10.1 — — 10.1 Repurchase of stock ( 2.5 ) — ( 241.1 ) — ( 68.9 ) ( 310.0 ) Excise tax on repurchases of stock — — ( 2.8 ) — — ( 2.8 ) Balance at May 4, 2024 215.7 $ 2.2 $ — $ ( 45.6 ) $ 7,355.8 $ 7,312.4 See accompanying Notes to Unaudited Condensed Consolidated Financial Statements. 7 Table of Contents DOLLAR TREE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) 13 Weeks Ended (in millions) May 3, 2025 May 4, 2024 Cash flows from operating activities: Net income $ 343.4 $ 300.1 Income from discontinued operations, net of tax 29.9 32.4 Income from continuing operations $ 313.5 $ 267.7 Adjustments to reconcile income from continuing operations to net cash provided by operating activities: Depreciation and amortization 151.1 119.0 Provision for deferred income taxes 14.1 20.8 Stock-based compensation expense 17.2 24.0 Impairments 0.1 — Gain on insurance proceeds related to fixed assets ( 41.0 ) — Other non-cash adjustments to income from continuing operations 3.1 0.5 Changes in operating assets and liabilities: Merchandise inventories ( 27.6 ) ( 32.5 ) Other current assets ( 18.6 ) ( 7.0 ) Other assets 0.7 1.0 Accounts payable ( 135.9 ) 138.6 Income taxes payable 92.5 62.2 Other current liabilities ( 13.0 ) ( 81.2 ) Other liabilities 2.6 ( 2.1 ) Operating lease right-of-use assets and liabilities, net 19.7 ( 5.8 ) Net cash provided by operating activities of continuing operations 378.5 505.2 Cash flows from investing activities: Capital expenditures ( 248.8 ) ( 316.5 ) Proceeds from insurance recoveries 50.0 — Payments for fixed asset disposition ( 0.1 ) ( 0.2 ) Net cash used in investing activities of continuing operations ( 198.9 ) ( 316.7 ) Cash flows from financing activities: Debt-issuance costs ( 3.8 ) — Proceeds from stock issued pursuant to stock-based compensation plans 2.8 3.9 Cash paid for taxes on exercises/vesting of stock-based compensation ( 10.7 ) ( 19.5 ) Payments for repurchase of stock ( 427.7 ) ( 272.2 ) Net cash used in financing activities ( 439.4 ) ( 287.8 ) Cash flows from discontinued operations: Net cash provided by operating activities of discontinued operations 104.5 190.5 Net cash used in investing activities of discontinued operations ( 45.4 ) ( 156.3 ) Net cash provided by discontinued operations 59.1 34.2 Effect of exchange rate changes on cash, cash equivalents and restricted cash 0.7 ( 0.4 ) Net change in cash, cash equivalents and restricted cash ( 200.0 ) ( 65.5 ) Cash, cash equivalents and restricted cash at beginning of period 1,511.2 757.2 Cash, cash equivalents and restricted cash at end of period $ 1,311.2 $ 691.7 Supplemental disclosure of cash flow information (1) : Cash paid for: Interest, net of amounts capitalized $ 0.4 $ 0.4 Income taxes $ 4.3 $ 5.3 Non-cash transactions: Right-of-use assets obtained in exchange for new operating lease liabilities $ 293.6 $ 346.8 Accrued capital expenditures $ 48.8 $ 103.9 Losses on property, plant and equipment recorded in insurance receivables $ — $ 47.0 (1) Supplemental disclosures are inclusive of activity for both continuing and discontinued operations. See accompanying Notes to Unaudited Condensed Consolidated Financial Statements. 8 Table of Contents DOLLAR TREE, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1 - Description of Business and Basis of Presentation Dollar Tree, Inc. (“we,” “our,” “us,” or “the Company”) is a leading operator of discount retail stores in the United States and Canada. The accompanying unaudited condensed consolidated financial statements include the financial statements of Dollar Tree, Inc., and its wholly-owned subsidiaries and were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the fiscal year ended February 1, 2025 filed with the U.S. Securities and Exchange Commission (“SEC”) on March 26, 2025. The results of operations for the 13 weeks ended May 3, 2025 are not necessarily indicative of the results to be expected for the entire fiscal year ending January 31, 2026. In our opinion, the unaudited condensed consolidated financial statements included herein contain all adjustments (including those of a normal recurring nature) considered necessary for a fair presentation of our financial position as of May 3, 2025 and May 4, 2024 and the results of our operations and cash flows for the periods presented. The February 1, 2025 balance sheet information was derived from the audited consolidated financial statements as of that date. All intercompany balances and transactions have been eliminated in consolidation. All amounts stated herein are in U.S. Dollars. Continuing operations consists of the Dollar Tree segment and corporate, support and other. As discussed in Note 10 , 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 and disclosures included in these Notes to Unaudited Condensed Consolidated Financial Statements reflect only our continuing operations. Refer to Note 1 0 for additional details on discontinued operations. Note 2 - Recent Accounting Pronouncements Recently Issued Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updated (“ASU”) 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”) which requires entities to disclose specific categories and greater disaggregation of information in the effective tax rate reconciliation, as well as disaggregated disclosure of income taxes paid, pretax income and income tax expense by jurisdiction. The standard also removes certain disclosure requirements that currently exist under Topic 740. ASU 2023-09 is effective on a prospective basis for annual periods beginning in fiscal 2025, with retrospective application permitted. We expect ASU 2023-09 to impact only our disclosures with no impact to our consolidated financial condition, results of operations, or cash flows. In November 2024, the FASB issued ASU 2024-03 “Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”) which requires disaggregated disclosure of certain costs and expenses, including purchases of inventory, employee compensation, depreciation, amortization and depletion, within relevant income statement captions. ASU 2024-03 is effective on a prospective basis for annual periods beginning in fiscal 2027 and for interim periods beginning in fiscal 2028, with retrospective application permitted. We are currently evaluating the impact of this standard to our consolidated financial statements. Note 3 - Contingencies In the first quarter of fiscal 2024, a tornado destroyed our Dollar Tree distribution center in Marietta, Oklahoma. Based on the significant damage sustained by the facility, the inventory contained in the facility and the facility itself was not salvageable. We incurred losses totaling $ 117.0 million in the first quarter of fiscal 2024, consisting of $ 70.0 million related to damaged inventory and $ 47.0 million related to property and equipment. These losses were fully offset by insurance receivables. Subsequently, we recorded 9 Table of Contents additional insurance receivables of approximately $ 12.0 million for other property and equipment-related damage recoveries that are reimbursable under the terms of our insurance policy. In fiscal 2024, we received insurance proceeds totaling $ 150.0 million, including $ 100.0 million related to damaged inventory and $ 50.0 million related to damaged property and equipment and recorded a gain of $ 30.0 million in the fourth quarter of fiscal 2024 for the excess of the insurance proceeds received over the losses incurred for damaged inventory. In the first quarter of fiscal 2025, we received additional insurance proceeds of $ 70.0 million, including $ 50.0 million related to damaged property and equipment and $ 20.0 million related to damaged inventory. We recorded a gain of approximately $ 62.0 million for the excess of the insurance proceeds received over the losses incurred for the damaged property and equipment and damaged inventory, which is reflected within “ Other (income) expense, net ” in the accompanying unaudited Condensed Consolidated Income Statements. Legal Proceedings We are defendants in ordinary, routine litigation or proceedings incidental to our business, including employment-related matters; infringement of intellectual property rights; personal injury/wrongful death claims; real estate matters; environmental and safety issues; and product safety matters. Legal proceedings may also include class, collective, representative and large cases and arbitrations, including those described below. We will vigorously defend ourselves in these matters. We do not believe that any of these matters will, individually or in the aggregate, have a material effect on our business, financial condition, or liquidity. We cannot give assurance, however, that one or more of these matters will not have a material effect on our results of operations for the quarter or year in which they are reserved or resolved. We assess our legal proceedings monthly and reserves are established if a loss is probable and the amount of such loss can be reasonably estimated. Many, if not substantially all, of our legal proceedings are subject to significant uncertainties and, therefore, determining the likelihood of a loss and the measurement of any loss can be complex and subject to judgment. With respect to the matters noted below where we have determined that a loss is reasonably possible but not probable, we are unable to reasonably estimate the amount or range of the possible loss at this time due to the inherent difficulty of predicting the outcome of and uncertainties regarding legal proceedings. Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions. Management’s assessment of legal proceedings could change because of future determinations or the discovery of facts which are not presently known. Accordingly, the ultimate costs of resolving these proceedings may be substantially higher or lower than currently estimated. Active Matters Talc Product Matters Multiple personal injury lawsuits are pending in state court in California, Illinois, Louisiana, New York, Texas, and New Jersey against Dollar Tree, Family Dollar or both alleging that certain talc products that we sold caused cancer. The plaintiffs seek compensatory, punitive and exemplary damages, damages for loss of consortium, and attorneys’ fees and costs. Although we have been able to resolve previous talc lawsuits against us without material loss, given the inherent uncertainties of litigation there can be no assurances regarding the outcome of pending or future cases. Future costs to litigate these cases are not known but may be material, and it is uncertain whether our costs will be covered by insurance. In addition, although we have indemnification rights against our vendors in several of these cases, it is uncertain whether the vendors will have the financial ability to fulfill their obligations to us. Acetaminophen Matters Beginning in August 2022, more than 50 personal injury cases have been filed in federal court against Dollar Tree, Family Dollar, or both, on behalf of minors alleging that their mothers took acetaminophen while pregnant, that the acetaminophen interfered with fetal development such that plaintiffs were born with autism and/or ADHD, and that we knew or should have known of the danger, had a duty to warn and failed to include appropriate warnings on the product labels. The plaintiffs seek compensatory, punitive and/or exemplary damages, restitution and disgorgement, economic damages, and attorneys’ fees and costs. These cases, which originated in Alabama, California, Florida, Georgia, Louisiana, Minnesota, Missouri, North Carolina, Kentucky, Tennessee and Texas, along with other cases against many other defendants, were consolidated into multi-district litigation in the Southern District of New York. The court disqualified plaintiffs’ experts and, on that basis, dismissed all the cases filed against us in the multi-district litigation. The dismissal has been appealed to the Second Circuit by plaintiffs. Note 4 - Short-Term Borrowings and Long-Term Debt On March 21, 2025, the Company entered into a new revolving credit facility (“Five-Year Credit Facility”), with JPMorgan Chase Bank, N.A., as agent, the banks and the financial institutions from time to time party thereto, providing for a $ 1.5 billion revolving 10 Table of Contents credit facility, of which up to $ 350.0 million is available for letters of credit. The Five-Year Credit Facility matures on March 21, 2030, subject to extensions permitted under the new Credit Agreement (“Credit Agreement”). The Credit Agreement contains a number of affirmative and negative covenants, similar to the prior revolving credit facility. In connection with entry into this new Five-Year Credit Facility, we terminated all commitments and fulfilled all obligations under our previous credit agreement dated December 8, 2021. Additionally, on March 21, 2025, the Company also entered into a 364 -Day Revolving Credit Facility, with JPMorgan Chase Bank, N.A., as agent, the banks and the financial institutions from time to time party thereto, providing for a $ 1.0 billion revolving credit facility. The 364 -Day Revolving Credit Facility matures on March 20, 2026. Borrowings under the Five-Year Credit Facility and the 364 -Day Revolving Credit Facility bear interest at the Adjusted Term SOFR Rate (as defined in the underlying credit agreements) plus 1.125 %, subject to adjustment based on (i) our credit ratings and (ii) our leverage ratio. There were no short-term borrowings outstanding at 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. Note 5 - Fair Value Measurements Financial assets and liabilities are classified in the fair value hierarchy in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (e.g., when there is evidence of impairment). We did not record any material impairment charges during the 13 weeks ended May 3, 2025 or May 4, 2024. Fair Value of Financial Instruments The carrying amounts of “Cash and cash equivalents,” “Restricted cash” and “Accounts payable” as reported in the accompanying unaudited Condensed Consolidated Balance Sheets approximate fair value due to their short-term maturities. The carrying values of our Five-Year Credit Facility, our 364-Day Revolving Credit Facility and borrowings under our commercial paper program approximate their fair values. At May 3, 2025, we had no borrowings outstanding under our credit facilities or our commercial paper program. The aggregate fair values and carrying values of our long-term borrowings, including current portion, were as follows: May 3, 2025 February 1, 2025 May 4, 2024 (in millions) Fair Value Carrying Value Fair Value Carrying Value Fair Value Carrying Value Level 1 Senior Notes $ 3,147.6 $ 3,434.5 $ 3,140.9 $ 3,433.6 $ 3,093.9 $ 3,430.9 The fair values of our Senior Notes were determined using Level 1 inputs as quoted prices in active markets for identical assets or liabilities are available. 11 Table of Contents Note 6 - Earnings Per Share The following table sets forth the calculations of basic and diluted earnings per share: 13 Weeks Ended (in millions, except per share data) May 3, 2025 May 4, 2024 Numerator: Income from continuing operations $ 313.5 $ 267.7 Income from discontinued operations, net of tax 29.9 32.4 Net income $ 343.4 $ 300.1 Denominator: Weighted average number of shares outstanding 213.6 217.8 Dilutive impact of share-based awards (as determined by applying the treasury stock method) 0.3 0.3 Weighted average number of shares and dilutive potential shares outstanding 213.9 218.1 Basic earnings per share of common stock: Continuing operations $ 1.47 $ 1.23 Discontinued operations 0.14 0.15 Total basic earnings per share of common stock $ 1.61 $ 1.38 Diluted earnings per share of common stock: Continuing operations $ 1.47 $ 1.23 Discontinued operations 0.14 0.15 Total diluted earnings per share of common stock $ 1.61 $ 1.38 Share-based awards of 2.6 million shares and 3.1 million shares were excluded from the calculation of diluted net income per share for the 13 weeks ended May 3, 2025 and May 4, 2024, respectively, because their inclusion would be anti-dilutive. Note 7 - Shareholders’ Equity We repurchased 5,926,985 shares of common stock on the open market at a cost of $ 436.8 million, including applicable excise tax, during the 13 weeks ended May 3, 2025. We repurchased 2,537,302 shares of common stock on the open market at a cost of $ 312.8 million, including applicable excise tax, during the 13 weeks ended May 4, 2024. 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. Note 8 - Segments and Disaggregated Revenue As previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended February 1, 2025, effective as of the fourth quarter of fiscal 2024, the Company no longer reports the Family Dollar segment; it now reports its financial performance based on the Dollar Tree segment and corporate, support and other. The Dollar Tree segment is a leading operator of discount variety stores offering merchandise predominantly at the opening price point of $ 1.25 , with additional offerings at higher price points. Dollar Tree stores serve customers with a broad range of income levels principally in suburban locations. The Dollar Tree segment includes our operations under the Dollar Tree and Dollar Tree Canada brands, 15 distribution centers in the United States and two distribution centers in Canada. Corporate, support and other consists primarily of store support center costs and the results of operations for our Summit Pointe property in Chesapeake, Virginia that are considered shared services and therefore these results are excluded from the Dollar Tree segment. Our chief operating decision maker (“CODM”) is our chief executive officer of the enterprise. The CODM evaluates the financial performance of the Dollar Tree segment using segment gross profit and operating income. The CODM reviews these metrics to 12 Table of Contents allocate resources to the segment, primarily in the annual budget and quarterly forecasting process. The CODM considers variances between actual results and internal budgets/forecasts on a monthly basis for both profit measures when making decisions about allocating capital and resources to the segment. The CODM also uses segment gross profit to evaluate our ability to control product and supply chain costs relative to changes in sales between comparable periods. The CODM uses operating income to assess the overall performance for the segment. The CODM is provided asset information on a consolidated basis rather than by segment. The accounting policies of the Dollar Tree segment are the same as those described in Note 2 of our Consolidated Financial Statements, included in our Annual Report on Form 10-K for the fiscal year ended February 1, 2025. We may revise the measurement of the Dollar Tree segment’s operating income, as determined by the information regularly reviewed by the CODM. If the measurement of the Dollar Tree segment changes, prior period amounts and balances are reclassified to be comparable to the current period’s presentation. Corporate, support and other includes costs that were previously incurred in support of the Family Dollar segment but are not directly attributable to it and thus were not recorded in discontinued operations. Information for the Dollar Tree segment, as well as for corporate, support and other, including the reconciliation to income from continuing operations before income taxes, is as follows: (in millions) Dollar Tree Segment Corporate, Support and Other Total 13 Weeks Ended May 3, 2025 Net sales $ 4,636.5 $ — $ 4,636.5 Cost of sales 2,987.0 — 2,987.0 Gross Profit 1,649.5 — 1,649.5 Other revenue — 3.2 3.2 Selling, general and administrative expenses 1,126.8 141.8 1,268.6 Operating income (loss) 522.7 ( 138.6 ) 384.1 Interest expense, net 22.7 Other income, net ( 61.7 ) Income from continuing operations before income taxes $ 423.1 Depreciation and amortization expense $ 140.9 $ 10.2 $ 151.1 Capital expenditures $ 238.3 $ 10.5 $ 248.8 13 Weeks Ended May 4, 2024 Net sales $ 4,165.6 $ — $ 4,165.6 Cost of sales 2,689.1 — 2,689.1 Gross Profit 1,476.5 — 1,476.5 Other revenue — 3.3 3.3 Selling, general and administrative expenses 954.2 143.7 1,097.9 Operating income (loss) 522.3 ( 140.4 ) 381.9 Interest expense, net 26.7 Other expense, net 0.1 Income from continuing operations before income taxes $ 355.1 Depreciation and amortization expense $ 108.9 $ 10.1 $ 119.0 Capital expenditures $ 271.4 $ 45.1 $ 316.5 Disaggregated Revenue The following table summarizes net sales by merchandise category for our Dollar Tree segment: 13 Weeks Ended (in millions) May 3, 2025 May 4, 2024 Consumable $ 2,336.6 50.4 % $ 2,092.0 50.2 % Variety 2,119.4 45.7 % 1,908.0 45.8 % Seasonal 180.5 3.9 % 165.6 4.0 % Total Dollar Tree segment net sales $ 4,636.5 100.0 % $ 4,165.6 100.0 % 13 Table of Contents Note 9 - Supply Chain Finance Program We facilitate a voluntary supply chain finance program, administered through a financial institution, which provides participating suppliers with the opportunity to finance payments due from us. Participating suppliers may, at their sole discretion, elect to finance one or more invoices of ours prior to their scheduled due dates at a discounted price with the financial institution. Our obligations to our suppliers, including amounts due and scheduled payment dates, are not impacted by the supplier’s decision to finance amounts under these arrangements. As such, the outstanding payment obligations under our supply chain financing program are included within “Accounts payable” in the accompanying unaudited Condensed Consolidated Balance Sheets and within “Cash flows from operating activities” in the accompanying unaudited Condensed Consolidated Statements of Cash Flows. Our outstanding payment obligations under this program were $ 352.0 million, $ 346.5 million and $ 42.4 million as of May 3, 2025, February 1, 2025, and May 4, 2024, respectively. Note 10 – Discontinued Operations As previously reported, in fiscal 2024 the Company 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. 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. Financial Information of Discontinued Operations “Income from discontinued operations, net of tax” in the accompanying unaudited Condensed Consolidated Income Statements reflects the after-tax results of the Family Dollar business and does not include any allocation of general corporate overhead expense or interest expense of the Company. The following table summarizes the results of operations of the Family Dollar business that are being reported as discontinued operations: 13 Weeks Ended (in millions) May 3, 2025 May 4, 2024 Net sales $ 3,309.6 $ 3,460.8 Other revenue 2.4 3.1 Total revenue 3,312.0 3,463.9 Cost of sales 2,321.4 2,589.6 Selling, general and administrative expenses 698.7 835.6 Operating income 291.9 38.7 Interest income 1.6 2.3 Loss from classification to held for sale 258.4 — Income from discontinued operations before income taxes 35.1 41.0 Provision for income taxes 5.2 8.6 Income from discontinued operations, net of tax $ 29.9 $ 32.4 Depreciation expense related to discontinued operations was $ 111.2 million for the 13 weeks ended May 4, 2024. The Company has ceased depreciating and amortizing its long-lived assets for Family Dollar which primarily includes right-of-use assets and property and equipment. 14 Table of Contents The following table summarizes the Family Dollar business assets and liabilities classified as discontinued operations in the accompanying unaudited Condensed Consolidated Balance Sheets: (in millions) May 3, 2025 February 1, 2025 May 4, 2024 ASSETS Cash and cash equivalents $ 227.1 $ 179.0 $ 227.9 Merchandise inventories 2,330.5 2,456.4 2,552.1 Other current assets 188.0 200.9 189.5 Property, plant and equipment, net 2,256.3 2,268.0 2,354.7 Operating lease right-of-use assets 2,559.1 2,580.6 2,769.4 Goodwill — — 490.5 Trade name intangible asset 750.0 750.0 2,150.0 Other assets 10.5 12.8 13.0 Valuation allowance to adjust assets to estimated fair value, less costs of disposal ( 3,616.0 ) ( 3,438.8 ) — Total assets of discontinued operations $ 4,705.5 $ 5,008.9 $ 10,747.1 LIABILITIES Current portion of operating lease liabilities $ 584.4 $ 598.5 $ 608.2 Accounts payable 880.5 977.5 961.5 Other current liabilities 336.7 378.6 384.5 Operating lease liabilities, long-term 1,966.3 2,134.5 2,350.1 Other liabilities 135.8 135.8 136.1 Total liabilities of discontinued operations $ 3,903.7 $ 4,224.9 $ 4,440.4 Assets and liabilities classified as held for sale are required to be recorded at the lower of carrying value or fair value less costs to sell. As of February 1, 2025, we determined that the fair value of the Family Dollar business, including costs to sell was lower than its carrying value and we recorded a $ 3,438.8 million valuation allowance against the assets held for sale. As of May 3, 2025, we remeasured the fair value of the Family Dollar business, including costs to sell and recorded an additional valuation allowance of $ 258.4 million. In addition, during the first quarter of fiscal 2025, certain assets and liabilities of the Family Dollar business were moved out of held for sale as they will be retained by Dollar Tree. The assets and liabilities included 57 combo stores that will be converted to Dollar Tree stores, and were reclassified as held and used at their fair value, which resulted in a $ 71.4 million reduction to the valuation allowance. The fair value of the Family Dollar business was estimated using the expected sale price as negotiated with the third party buyer. The valuation allowance was recorded within “Loss from classification to held for sale” in the summarized results of operations of discontinued operations for the 13 weeks ended May 3, 2025. Capital expenditures related to discontinued operations were $ 44.1 million and $ 155.7 million for the 13 weeks ended May 3, 2025 and May 4, 2024, respectively. Note 11 - Condensed Consolidated Financial Statement Details The Condensed Consolidated Statements of Cash Flows includes the cash flows of continuing and discontinued operations. The following is a reconciliation between “Cash and cash equivalents” and “Restricted cash” of continuing operations presented in the Condensed Consolidated Balance Sheets and the total cash, cash equivalents and restricted cash presented in the Condensed Consolidated Statements of Cash Flows: (in millions) May 3, 2025 May 4, 2024 Cash and cash equivalents on the Condensed Consolidated Balance Sheets $ 1,007.4 $ 390.6 Restricted cash on the Condensed Consolidated Balance Sheets 76.7 73.2 Cash, cash equivalents and restricted cash of discontinued operations included in current assets of discontinued operations on the Condensed Consolidated Balance Sheets 227.1 227.9 Total cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of Cash Flows $ 1,311.2 $ 691.7 15 Table of Contents