Dollar Tree (DLTR) Financial History

The market price of our common stock may fluctuate significantly in response to a number of factors.

We value constructive input from investors and regularly engage in dialogue with our shareholders regarding strategy and performance.

We rely on internally generated funds and borrowings under our credit facilities and commercial paper program to fund our seasonal working capital requirements for existing and new stores, distribution network program…

If we are unable to meet our social- or environmental-related goals or evolving and divergent stakeholder expectations and industry standards, if our related data, processes and reporting are incomplete or inaccurate,…

The rules, regulations and expectations of regulators, customers, investors, associates, and other stakeholders with respect to these matters continue to evolve.

Our business faces increasing public scrutiny related to corporate social responsibility, environmental concerns, governance and related practices.

Our business is subject to evolving disclosure requirements and expectations with respect to social, environmental, and similar matters that could expose us to numerous risks.

If our programs do not adequately anticipate regulatory expectations or requirements, or if we fail to appropriately design and maintain an effective enterprise compliance program and system of controls to prevent and…

We operate in an increasingly regulated environment across a large and diverse geographic footprint, and we devote substantial resources to ensure effective compliance with numerous and frequently changing laws and re…

failed to comply with applicable regulations and/or procedures, they may require prompt corrective action, and/or proceed directly to other forms of enforcement action, including the imposition of operating restrictio…

Likewise, we are subject to the Payment Card Industry Data Security Standards (“PCI-DSS”) which is mandated by the card brands and administered through the Payment Card Industry Security Standards Council.

We are exposed to persistent and substantial risks from cybersecurity threats, as the number of cyberattacks targeting retailers and corporate networks grows, and the volume, intensity and sophistication of attempted…

To support the growth of our business, we are making substantial investments in our information technology systems, including updating or replacing legacy systems.

Although we have operational safeguards in place, they may not be effective in preventing the failure of these systems or platforms to operate effectively and be available to us.

We rely extensively on our computer and technology systems and, in certain cases, those of third-party service providers to support nearly all key functions in our business, including managing inventory, operating our…

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

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

We also have continuing obligations to Family Dollar pursuant to transition services or other agreements through which we continue to provide certain services to Family Dollar for 18 months following the date of sale.

The sale of our Family Dollar business and other recent strategic initiatives have also entailed significant changes across our organizational structure, senior leadership, culture, functional alignment, outsourcing a…

We may not achieve the anticipated benefits of the sale of the Family Dollar business.

successfully.

We may not be successful in executing important strategic initiatives, which may have an adverse impact on our business and financial results.

Our growth and performance are dependent on the skills, experience and contributions of our associates, executives and key personnel.

Our highest sales periods are during the Christmas and Easter seasons, and we generally realize a disproportionate amount of our net sales and our operating and net income during the fourth quarter.

We expect competition to increase in the future.

The retail industry is highly competitive with respect to price, customers, store locations, merchandise quality, product assortment, service offerings, customer service, shopping experience, product sourcing, labor,…

Furthermore, factors that could adversely affect consumer disposable income could decrease our customers’ spending on products we sell most profitably.

Changes in economic conditions or consumer spending habits could impact our sales or profitability.

In addition, our product mix is affected by the supply of goods and could be negatively impacted by various factors, including those described under “Risks associated with merchandise supply could adversely affect our…

Our sales and profitability are affected by our product assortment and customer response to the mix of products we sell.

Expanding our square footage profitably depends on a number of uncertainties, including our ability to locate, lease, build out and open or expand stores in suitable locations on a timely basis under favorable economi…

Our strategic plan includes improvements in store productivity through initiatives to improve store standards and operational consistency, refresh and renovation programs, shelf productivity optimization, and elevated…

Our growth is dependent on our ability to increase sales in existing stores.

•Vulnerability to natural or man-made disasters, including climate change.

•Shipping disruptions.

•Shipping costs.

•Distribution center capacity.

•Efficient operations and management.

Our success is dependent on our ability to import or transport merchandise to our distribution centers and deliver merchandise to our stores in a safe, timely and cost-effective manner.

Higher costs and disruptions in our supply chain could have an adverse impact on our sales and profitability.

In addition, the U.S.

•geopolitical tensions, international disputes or conflicts, military confrontation, blockade, war, economic sanctions, piracy, acts of terrorism or other factors affecting international shipping traffic;

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

factors.

Further, the Supreme Court’s recent ruling striking down race-based affirmative action in higher education has increased scrutiny of corporate diversity, equity and inclusion practices.

For example, in 2024 we resolved a previously disclosed investigation by the United States Department of Justice (the “DOJ”) regarding a historical rodent issue at Family Dollar’s West Memphis, Arkansas distribution c…

Legal, Regulatory and Environmental, Social and Governance (“ESG”) Risks

affected, which could result in our customers discontinuing the use of debit or credit cards in our stores or not shopping in our stores altogether.

We rely extensively on our computer and technology systems and, in certain cases, those of third-party service providers to support nearly all key functions in our business, including managing inventory, operating our…

For example, in the fourth quarter of fiscal 2023, we recorded a $1,069.0 million non-cash goodwill impairment charge and a $950.0 million non-cash trade name impairment charge resulting from our annual impairment tes…

If the pending sale of the Family Dollar business is completed, our operational and financial profile will change significantly, with the Dollar Tree banner comprising substantially all of our retail operations.

In addition, the pendency and anticipated completion of the sale of the Family Dollar business may impose challenges on our business, including the diversion of management’s attention from ongoing business concerns; i…

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

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 busines…

To be effective, our strategies have and will continue to require significant investment in cross-functional operations and management focus, along with supporting investments.

In addition, we have been executing on a number of strategic initiatives in our Family Dollar banner, culminating with our agreement in March 2025 to sell the Family Dollar business.

•We continue our significant investments in our technology across our business, including our mobile apps, store systems, merchandising and supply chain.

•We have initiatives to provide competitive pay and benefits, enhanced training, and other projects to support our workforce as well as initiatives to optimize and modernize our stores.

•We secured the leases for 164 former 99 Cents Only Stores across Arizona, California, Nevada and Texas and opened those stores under our Dollar Tree segment.

•We continue to expand our Dollar Tree brand assortment at the $1.25 price point and expand our multi-price product assortment, which now comprises a wide assortment of consumable and discretionary product at varying…

In recent years, we have embarked on a number of strategic initiatives across the Dollar Tree and Family Dollar banners to drive productive sales growth and improve operating efficiency.

Risks Relating to Strategic Initiatives and the Pending Sale of the Family Dollar Business

Our success also depends on our ability to select and obtain sufficient quantities of relevant merchandise at prices that allow us to sell such merchandise at profitable and appropriate prices.

Our gross profit margin decreases when we increase the proportion of higher cost goods we sell.

In addition, we have entered into an agreement to sell the Family Dollar business.

liability claims and product recalls; disruptions in raw material and finished product supply and distribution chains; supplier labor and human rights issues, and other risks generally encountered by entities that sou…

We could experience a decline in consumer confidence and spending if our customers become concerned about the quality and safety of the products we sell.

•Trucking and diesel fuel costs.

Furthermore, in response to the recent tariffs announced by the United States, China and other countries have imposed or proposed additional tariffs on certain exports from the United States.

Among our foreign suppliers, China is the source of the majority of our direct imports.

In our Dollar Tree segment, we continue to expand our brand assortment at the $1.25 price point and our multi-price product assortment generally, which began with the introduction of $3 and $5 Dollar Tree Plus product…

Future increases in costs such as the cost of merchandise, wage and benefit costs, ocean shipping rates, domestic freight costs, fuel and energy costs, tariffs, duties and other measures that create barriers to or inc…

Further, as the rules, regulations and expectations continue to evolve, our stakeholders may have differing views.

In addition, our operations and/or the products we sell are subject to regulatory oversight by the U.S.

Legal and Regulatory Risks and Related Considerations

We utilize artificial intelligence-enabled technologies in our business, and advancements in technology may allow us to expand the use or applications of artificial intelligence, including generative artificial intell…

We use, and may over time increase the usage of, artificial intelligence and machine learning in our business, and challenges with properly managing its use could adversely affect our business.

For additional discussion of the company’s cybersecurity posture, including risk management and governance, please see “Item 1C.

respectively, compared to the prior year.

Following the sale of the Family Dollar business, our operational and financial profile changed significantly, with the Dollar Tree banner comprising substantially all of our retail operations.

To be effective, our strategies have and will continue to require significant investment in cross-functional operations and management focus, along with supporting investments.

These initiatives also place significant demands on our accounting, financial, information technology, and other systems, and on our business overall.

We may not be successful in executing or achieving the anticipated benefits of these important strategic initiatives, which may not result in the desired growth or impacts on our traffic and basket size, sales, operat…

•Modernizing our technology platform, replacing legacy systems, and enhancing our mobile app, human capital management systems, supply chain platforms, and data analytics capabilities.

•Expanding and modernizing our distribution network, enhancing warehouse management systems, and improving our transportation systems; and

•Continuing new store growth, as well as improving store standards and operational consistency through refresh and renovation programs, shelf productivity optimization, and initiatives to elevate store execution and c…

•Managing costs with agility, including our strategies to mitigate tariffs and inflationary pressures, manage operating expenses, and reduce corporate SG&A as a percentage of sales;

•Expanding and refining our multi-price assortment to deliver a broader, more relevant offering while preserving the foundational value proposition of Dollar Tree;

We continue to execute on a number of strategic initiatives to accelerate profitable growth for Dollar Tree as a standalone banner following the sale of Family Dollar.

Risks Relating to Our Strategic Initiatives

numbers of qualified associates, our operations, customer service levels, legal and regulatory compliance, and support functions could suffer.

We could experience a decline in consumer confidence and spending if our customers become concerned about the quality and safety of the products we sell.

weather or unfavorable economic conditions during the fourth quarter could cause a reduction in sales during these periods, which in turn could adversely affect our operating results, particularly operating and net in…

Our success depends on our ability to select and obtain sufficient quantities of relevant merchandise at prices that allow us to sell such merchandise at profitable and appropriate prices, and to market such merchandi…

Our growth is dependent on our ability to expand our square footage profitably.

•Trucking and fuel costs.

These direct and indirect impacts and the collective interaction of tariffs and other related measures, our mitigation strategies and those of our competitors, our customers’ response and consumer behavior generally,…

and related measures in the future.

The imposition of tariffs on imported merchandise or other actions against China or other countries from which we import goods, and any retaliatory actions or other responses by such countries, could negatively impact…

Among our foreign suppliers, China is the source of the majority of our direct imports.