DOLLAR TREE, INC. 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk. We are exposed to various types of market risk in the normal course of our business, including the impact of interest rate changes, diesel fuel cost changes and inflation. We may enter into interest rate or diesel fuel swaps to manage exposure to interest rate and diesel fuel price changes. We do not enter into derivative instruments for any purpose other than cash flow hedging and we do not hold derivative instruments for trading purposes. Interest Rate Risk Our exposure to interest rate risk relates to our Five-Year Credit Facility, our 364-Day Revolving Credit Facility, borrowings under our commercial paper program, and any future registered offerings of senior notes to raise capital or replace existing maturities. At May 3, 2025, there were no borrowings outstanding under the credit facilities or the commercial paper program. 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. A hypothetical increase of one percentage point on such borrowings would not materially affect our results of operations or cash flows. Inflation Risk The primary inflationary factors impacting our business include changes to the costs of merchandise, transportation (including the cost of diesel fuel), store construction-related costs, and labor. If these inflationary pressures become significant, we may not be able to fully offset such higher costs through adjustments to our product assortment, improvements in operational efficiencies or increases in our comparable store net sales. Our inability or failure to do so could harm our business, financial condition and results of operations.