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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 30, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 0-25464
dltr-20211030_g1.gif
DOLLAR TREE, INC.
(Exact name of registrant as specified in its charter)
Virginia26-2018846
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
500 Volvo Parkway
Chesapeake,Virginia23320
(Address of principal executive offices)(Zip Code)

(757) 321-5000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $.01 per shareDLTRNASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YesNo
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
YesNo



Table of Contents
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.        
Large accelerated filerAccelerated filer
Non-accelerated filer Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
No
As of November 19, 2021, there were 224,956,059 shares of the registrant’s common stock outstanding.

2


DOLLAR TREE, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED OCTOBER 30, 2021
TABLE OF CONTENTS
 Page
 PART I - FINANCIAL INFORMATION 
Item 1.
Item 2.
Item 3.
Item 4.
   
PART II - OTHER INFORMATION 
 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

3

Table of Contents
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

DOLLAR TREE, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Unaudited)
 13 Weeks Ended39 Weeks Ended
 October 30,October 31,October 30,October 31,
(in millions, except per share data)2021202020212020
Net sales$6,415.4 $6,176.7 $19,232.4 $18,741.1 
Other revenue2.3 0.3 8.2 0.3 
Total revenue6,417.7 6,177.0 19,240.6 18,741.4 
Cost of sales4,651.7 4,252.6 13,643.6 13,105.9 
Selling, general and administrative expenses1,455.5 1,458.9 4,364.4 4,429.2 
Operating income310.5 465.5 1,232.6 1,206.3 
Interest expense, net33.4 38.1 99.4 113.1 
Other expense, net0.2 0.1 0.2 0.8 
Income before income taxes276.9 427.3 1,133.0 1,092.4 
Provision for income taxes60.1 97.3 259.3 253.3 
Net income$216.8 $330.0 $873.7 $839.1 
Basic net income per share$0.96 $1.39 $3.82 $3.54 
Diluted net income per share$0.96 $1.39 $3.80 $3.53 
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 Ended39 Weeks Ended
October 30,October 31,October 30,October 31,
(in millions)2021202020212020
Net income$216.8 $330.0 $873.7 $839.1 
Foreign currency translation adjustments0.7 0.6 3.9 (0.8)
Total comprehensive income$217.5 $330.6 $877.6 $838.3 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.


5

Table of Contents
DOLLAR TREE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in millions)October 30, 2021January 30, 2021October 31, 2020
ASSETS  
Current assets:  
Cash and cash equivalents$701.4 $1,416.7 $1,118.3 
Merchandise inventories4,316.0 3,427.0 3,792.3 
Other current assets357.1 207.1 260.4 
Total current assets5,374.5 5,050.8 5,171.0 
Property, plant and equipment, net of accumulated depreciation
   of $5,209.9, $4,765.0 and $4,618.1, respectively
4,377.4 4,116.3 4,095.6 
Restricted cash53.4 46.9 46.9 
Operating lease right-of-use assets6,424.0 6,324.1 6,185.1 
Goodwill1,985.3 1,984.4 1,983.1 
Trade name intangible asset3,100.0 3,100.0 3,100.0 
Deferred tax asset22.3 23.2 23.3 
Other assets53.1 50.3 47.2 
Total assets$21,390.0 $20,696.0 $20,652.2 
LIABILITIES AND SHAREHOLDERS’ EQUITY   
Current liabilities:   
Current portion of long-term debt$ $ $300.0 
Current portion of operating lease liabilities1,388.0 1,348.2 1,296.5 
Accounts payable1,984.8 1,480.5 1,587.2 
Income taxes payable 86.3  
Other current liabilities918.4 815.3 858.6 
Total current liabilities4,291.2 3,730.3 4,042.3 
Long-term debt, net, excluding current portion3,231.1 3,226.2 3,225.3 
Operating lease liabilities, long-term5,151.0 5,065.5 4,962.1 
Deferred income taxes, net1,096.8 1,013.5 1,043.1 
Income taxes payable, long-term26.4 22.6 31.0 
Other liabilities349.1 352.6 387.3 
Total liabilities14,145.6 13,410.7 13,691.1 
Commitments and contingencies (Note 2)
Shareholders’ equity7,244.4 7,285.3 6,961.1 
Total liabilities and shareholders’ equity$21,390.0 $20,696.0 $20,652.2 
Common shares outstanding224.9 233.4 235.2 
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 October 30, 2021
(in millions)Common
Stock
Shares
Common
Stock
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Shareholders'
Equity
Balance at July 31, 2021224.9 $2.2 $1,204.9 $(32.0)$5,836.6 $7,011.7 
Net income— — — — 216.8 216.8 
Total other comprehensive income— — — 0.7 — 0.7 
Issuance of stock under Employee Stock
    Purchase Plan
— — 2.4 — — 2.4 
Stock-based compensation, net— — 12.8 — — 12.8 
Balance at October 30, 2021224.9 $2.2 $1,220.1 $(31.3)$6,053.4 $7,244.4 
39 Weeks Ended October 30, 2021
(in millions)Common
Stock
Shares
Common
Stock
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Shareholders'
Equity
Balance at January 30, 2021233.4 $2.3 $2,138.5 $(35.2)$5,179.7 $7,285.3 
Net income— — — — 873.7 873.7 
Total other comprehensive income— — — 3.9 — 3.9 
Issuance of stock under Employee Stock
    Purchase Plan
0.1 — 8.3 — — 8.3 
Exercise of stock options— — 0.7 — — 0.7 
Stock-based compensation, net0.6 — 22.5 — — 22.5 
Repurchase of stock(9.2)(0.1)(949.9)— — (950.0)
Balance at October 30, 2021224.9 $2.2 $1,220.1 $(31.3)$6,053.4 $7,244.4 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
7

Table of Contents
DOLLAR TREE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (cont.)
(Unaudited)
13 Weeks Ended October 31, 2020
(in millions)Common
Stock
Shares
Common
Stock
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Shareholders'
Equity
Balance at August 1, 2020237.3 $2.4 $2,505.5 $(41.2)$4,346.9 $6,813.6 
Net income— — — — 330.0 330.0 
Total other comprehensive income— — — 0.6 — 0.6 
Issuance of stock under Employee Stock
    Purchase Plan
— — 2.5 — — 2.5 
Stock-based compensation, net— — 14.4 — — 14.4 
Repurchase of stock(2.1)— (200.0)— — (200.0)
Balance at October 31, 2020235.2 $2.4 $2,322.4 $(40.6)$4,676.9 $6,961.1 
39 Weeks Ended October 31, 2020
(in millions)Common
Stock
Shares
Common
Stock
Additional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
Shareholders'
Equity
Balance at February 1, 2020236.7 $2.4 $2,454.4 $(39.8)$3,837.8 $6,254.8 
Net income— — — — 839.1 839.1 
Total other comprehensive loss— — — (0.8)— (0.8)
Issuance of stock under Employee Stock
    Purchase Plan
0.1 — 7.6 — — 7.6 
Exercise of stock options0.1 — 6.7 — — 6.7 
Stock-based compensation, net0.4 — 53.7 — — 53.7 
Repurchase of stock(2.1)— (200.0)— — (200.0)
Balance at October 31, 2020235.2 $2.4 $2,322.4 $(40.6)$4,676.9 $6,961.1 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
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DOLLAR TREE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 39 Weeks Ended
 October 30,October 31,
(in millions)20212020
Cash flows from operating activities:  
Net income$873.7 $839.1 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization527.3 503.7 
Provision for deferred income taxes85.0 59.4 
Stock-based compensation expense63.1 70.5 
Amortization of debt discount and debt-issuance costs4.9 3.1 
Other non-cash adjustments to net income8.6 7.4 
Changes in operating assets and liabilities(543.9)250.5 
Net cash provided by operating activities1,018.7 1,733.7 
Cash flows from investing activities:  
Capital expenditures(749.6)(707.0)
Proceeds from governmental grant2.9  
Proceeds from (payments for) fixed asset disposition0.4 (0.5)
Net cash used in investing activities(746.3)(707.5)
Cash flows from financing activities:  
Principal payments for long-term debt (250.0)
Proceeds from revolving credit facility 750.0 
Repayments of revolving credit facility (750.0)
Proceeds from stock issued pursuant to stock-based compensation plans9.0 14.3 
Cash paid for taxes on exercises/vesting of stock-based compensation(40.6)(16.8)
Payments for repurchase of stock(950.0)(194.2)
Net cash used in financing activities(981.6)(446.7)
Effect of exchange rate changes on cash, cash equivalents and restricted cash0.4 (0.3)
Net increase (decrease) in cash, cash equivalents and restricted cash(708.8)579.2 
Cash, cash equivalents and restricted cash at beginning of period1,463.6 586.0 
Cash, cash equivalents and restricted cash at end of period$754.8 $1,165.2 
Supplemental disclosure of cash flow information:  
Cash paid for:  
Interest, net of amounts capitalized$65.7 $80.4 
Income taxes$362.5 $300.5 
Non-cash transactions:
Right-of-use assets obtained in exchange for new operating lease liabilities$1,134.3 $959.6 
Accrued capital expenditures$63.4 $41.3 
 See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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DOLLAR TREE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Basis of Presentation
Unless otherwise stated, references to “we,” “us,” and “our” in this quarterly report on Form 10-Q refer to Dollar Tree, Inc. and its direct and indirect subsidiaries on a consolidated basis. We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles 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 year ended January 30, 2021. The results of operations for the 13 and 39 weeks ended October 30, 2021 are not necessarily indicative of the results to be expected for the entire fiscal year ending January 29, 2022.
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 October 30, 2021 and October 31, 2020 and the results of our operations and cash flows for the periods presented. The January 30, 2021 balance sheet information was derived from the audited consolidated financial statements as of that date.
Certain prior year amounts have been reclassified for consistency with the current year presentation.
Note 2 - Commitments and Contingencies
Purchase Obligations
At October 30, 2021, we have commitments totaling $253.8 million related to agreements for ocean shipping contracts.
Contingencies
We are defendants in legal proceedings including the class, collective, representative and large cases described below as well as individual claims in arbitration. 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 or financial condition. 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 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. For matters that have settled, we reserve the estimated settlement amount even if the settlement has not been approved by the court. 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 legal proceedings where we have determined that a loss is reasonably possible but not probable, we are unable to estimate the amount or range of the reasonably possible loss 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.
Dollar Tree Active Matters
The Food and Drug Administration (“FDA”) has alleged that we improperly sold certain topically applied, over the counter (“OTC”) products manufactured by certain Chinese factories that were on an import “alert” restriction issued by the FDA. We responded to the FDA by proposing and implementing enhanced procedures and processes for any OTC products we import from China.
Actual or threatened California state court lawsuits have been filed against Dollar Tree and Family Dollar for similar employment-related claims brought under the Private Attorney General Act (“PAGA”). These cases may allege violations such as failure to provide employees with compliant rest and meal breaks, suitable seating and overtime pay, reimburse business expenses, pay minimum wages for all time worked, provide accurate wage statements, and timely pay wages as well as other off-the-clock and potential labor code violations.
Three lawsuits are pending against us and our vendors alleging that personal talc powder products caused cancer. We do not believe the products we sold caused the illnesses. Our past talc lawsuits have been resolved without material loss to the company but
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no assurance can be given as to the outcome of pending or future cases. Although we have indemnification rights against our vendors, it is uncertain whether the vendors will have the financial ability to carry out their obligations. It is also uncertain whether our insurers will deny coverage under our various policies.
Dollar Tree Resolved Matters
In December 2020, a former store manager brought a class action in California state court alleging we failed to reimburse employees for business expenses and in so failing, engaged in unfair competition. The case has been resolved.
Family Dollar Active Matters
In August 2020, a consumer class action was filed against us in New York alleging Smoked Almonds sold by us are mislabeled because the almonds do not go through a smoking process but rather acquire their smoky taste through the use of smoked flavoring. The legal claims include New York consumer protection laws, negligent misrepresentations, breach of warranties, fraud and unjust enrichment.
In January, April, and September 2021, state-wide consumer class actions were filed against us by the same law firm in Georgia and Alabama, respectively, for breach of warranty based on the allegation that the coffee we sold was mislabeled because the canisters did not contain enough coffee to make the number of cups of coffee stated on the label.
Please see the description above for talc and PAGA lawsuits against Family Dollar.
Family Dollar Resolved Matters
In late 2019 and early 2020, personal injury and consumer class actions were filed alleging that we sold Zantac containing a probable carcinogen. The lawsuits were dismissed in June 2021. The time for appealing the dismissal has not run.
Note 3 - Fair Value Measurements
As required, 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 significant impairment charges during the 13 or 39 weeks ended October 30, 2021 and October 31, 2020.
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 aggregate fair values and carrying values of our long-term borrowings were as follows:
October 30, 2021January 30, 2021October 31, 2020
(in millions)Fair ValueCarrying ValueFair ValueCarrying ValueFair ValueCarrying Value
Level 1  
Senior Notes$3,532.4 $3,234.5 $3,654.4 $3,231.5 $3,966.3 $3,531.2 
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. The carrying value of our Revolving Credit Facility approximates its fair value because the interest rates vary with market interest rates.

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Note 4 - Net Income Per Share
The following table sets forth the calculations of basic and diluted net income per share:
13 Weeks Ended39 Weeks Ended
October 30,October 31,October 30,October 31,
(in millions, except per share data)2021202020212020
Basic net income per share:
Net income$216.8 $330.0 $873.7 $839.1 
Weighted average number of shares outstanding224.9 236.8 228.9 237.0 
Basic net income per share$0.96 $1.39 $3.82 $3.54 
Diluted net income per share:
Net income$216.8 $330.0 $873.7 $839.1 
Weighted average number of shares outstanding224.9 236.8 228.9 237.0 
Dilutive effect of stock options and restricted stock (as
   determined by applying the treasury stock method)
0.9 1.1 1.0 0.8 
Weighted average number of shares and dilutive potential
   shares outstanding
225.8 237.9 229.9 237.8 
Diluted net income per share$0.96 $1.39 $3.80 $3.53 
For the 13 and 39 weeks ended October 30, 2021 and October 31, 2020, substantially all of the stock options outstanding were included in the calculation of the weighted average number of shares and dilutive potential shares outstanding.
Note 5 - Stock-Based Compensation
For a discussion of our stock-based compensation plans, refer to “Note 11 - Stock-Based Compensation Plans” of our Annual Report on Form 10-K for the year ended January 30, 2021. Stock-based compensation expense was $63.1 million and $70.5 million during the 39 weeks ended October 30, 2021 and October 31, 2020, respectively.
Restricted Stock
We issue service-based RSUs to employees and officers and issue PSUs to certain of our officers. We recognize expense based on the estimated fair value of the RSUs or PSUs granted over the requisite service period, which is generally three years, on a straight-line basis or a shorter period based on the retirement eligibility of the grantee. The fair value of RSUs and PSUs is determined using our closing stock price on the date of grant.
Service-Based RSUs
The following table summarizes the status of service-based RSUs as of October 30, 2021 and changes during the 39 weeks then ended:
Number of SharesWeighted Average
Grant Date
Fair Value
Nonvested at January 30, 20211,265,216 $83.16 
Granted631,587 108.90 
Vested(604,670)87.44 
Forfeited(114,836)92.57 
Nonvested at October 30, 20211,177,297 $93.86 

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PSUs
The following table summarizes the status of PSUs as of October 30, 2021 and changes during the 39 weeks then ended:
Number of SharesWeighted Average
Grant Date
Fair Value
Nonvested at January 30, 2021423,272 $82.67 
Granted422,524 95.04 
Vested(218,232)79.44 
Forfeited(42,592)95.66 
Nonvested at October 30, 2021584,972 $91.86 
Note 6 - Shareholders’ Equity
We did not repurchase any shares of common stock on the open market during the 13 weeks ended October 30, 2021. During the 39 weeks ended October 30, 2021, we repurchased 9,156,898 shares of common stock on the open market for approximately $950.0 million. We repurchased 2,154,304 shares of common stock on the open market for approximately $200.0 million during the 13 and 39 weeks ended October 31, 2020. Approximately $5.8 million in share repurchases had not settled as of October 31, 2020. This amount was accrued and is reflected in “Other current liabilities” within the accompanying unaudited condensed consolidated balance sheet as of October 31, 2020.
During the 13 weeks ended October 30, 2021, the Board increased our share repurchase authorization by $1.05 billion to an aggregate amount of $2.5 billion, including $1.45 billion available for repurchases under the Board’s previous repurchase authorization approved on March 2, 2021.
Note 7 - Segments and Disaggregated Revenue
We operate a chain of more than 15,900 retail discount stores in 48 states and five Canadian provinces. Our operations are conducted in two reporting business segments: Dollar Tree and Family Dollar. We define our segments as those operations whose results our chief operating decision maker (“CODM”) regularly reviews to analyze performance and allocate resources.
The Dollar Tree segment is the leading operator of discount variety stores offering merchandise predominantly at the fixed price point of $1.00. 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.
The Family Dollar segment operates a chain of general merchandise retail discount stores providing consumers with a selection of competitively-priced merchandise in convenient neighborhood stores. The Family Dollar segment consists of our operations under the “Family Dollar” brand and 11 distribution centers. The Family Dollar segment Operating income includes advertising revenue, which is a component of Other revenue in the accompanying unaudited condensed consolidated income statements.
We measure the results of our segments using, among other measures, each segment’s net sales, gross profit and operating income. The CODM reviews these metrics for each of our reporting segments. We may revise the measurement of each segment’s operating income, as determined by the information regularly reviewed by the CODM. If the measurement of a segment changes, prior period amounts and balances are reclassified to be comparable to the current period’s presentation. Corporate, support and Other consists primarily of store support center costs that are considered shared services and therefore these selling, general and administrative costs are excluded from our two reporting business segments. These costs include operating expenses for our store support center and the results of operations for our Summit Pointe property in Chesapeake, Virginia.

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Information for our segments, as well as for Corporate, support and Other, including the reconciliation to Income before income taxes, is as follows:
 13 Weeks Ended39 Weeks Ended
 October 30,October 31,October 30,October 31,
(in millions)2021202020212020
Condensed Consolidated Income Statement Data:
Net sales:
Dollar Tree $3,417.4 $3,303.2 $10,003.0 $9,557.6 
Family Dollar2,998.0 2,873.5 9,229.4 9,183.5 
Consolidated Net sales$6,415.4 $6,176.7 $19,232.4 $18,741.1 
Gross profit:
Dollar Tree $1,031.1 $1,154.2 $3,207.1 $3,206.8 
Family Dollar732.6 769.9 2,381.7 2,428.4 
Consolidated Gross profit$1,763.7 $1,924.1 $5,588.8 $5,635.2 
Operating income (loss):
Dollar Tree $290.5 $417.9 $1,019.2 $1,006.5 
Family Dollar88.6 131.4 456.3 472.0 
Corporate, support and Other(68.6)(83.8)(242.9)(272.2)
Consolidated Operating income310.5 465.5 1,232.6 1,206.3 
Interest expense, net33.4 38.1 99.4 113.1 
Other expense, net0.2 0.1 0.2 0.8 
Income before income taxes$276.9 $427.3 $1,133.0 $1,092.4 
 As of
 October 30,January 30,October 31,
(in millions)202120212020
Condensed Consolidated Balance Sheet Data:
Goodwill:
Dollar Tree $425.8 $424.9 $423.6 
Family Dollar1,559.5 1,559.5 1,559.5 
Consolidated Goodwill$1,985.3 $1,984.4 $1,983.1 
Total assets:
Dollar Tree $8,954.7 $8,669.3 $8,467.4 
Family Dollar11,869.8 11,562.2 11,703.0 
Corporate, support and Other565.5 464.5 481.8 
Consolidated Total assets$21,390.0 $20,696.0 $20,652.2 


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Disaggregated Revenue
The following table summarizes net sales by merchandise category for our segments:
 13 Weeks Ended39 Weeks Ended
 October 30,October 31,October 30,October 31,
(in millions)2021202020212020
Dollar Tree segment net sales by
    merchandise category:
Consumable$1,563.0 45.7 %$1,564.1 47.4 %$4,671.4 46.7 %$4,778.8 50.0 %
Variety1,596.3 46.7 %1,520.9 46.0 %4,961.5 49.6 %4,473.0 46.8 %
Seasonal258.1 7.6 %218.2 6.6 %370.1 3.7 %305.8 3.2 %
Total Dollar Tree segment net sales$3,417.4 100.0 %$3,303.2 100.0 %$10,003.0 100.0 %$9,557.6 100.0 %
Family Dollar segment net sales by
    merchandise category:
Consumable$2,359.4 78.7 %$2,255.7 78.5 %$7,065.3 76.6 %$7,077.5 77.1 %
Home products228.7 7.6 %240.1 8.3 %777.0 8.4 %802.7 8.7 %
Apparel and accessories178.3 6.0 %157.4 5.5 %592.4 6.4 %517.8 5.6 %
Seasonal and electronics231.6 7.7 %220.3 7.7 %794.7 8.6 %785.5 8.6 %
Total Family Dollar segment net sales$2,998.0 100.0 %$2,873.5 100.0 %$9,229.4 100.0 %$9,183.5 100.0 %

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Note Regarding Forward-Looking Statements: This document contains “forward-looking statements” as that term is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they address future events, developments and results and do not relate strictly to historical facts. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Forward-looking statements include, without limitation, statements preceded by, followed by or including words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “view,” “target” or “estimate,” “may,” “will,” “should,” “predict,” “possible,” “potential,” “continue,” “strategy,” and similar expressions. For example, our forward-looking statements include, without limitation, statements regarding:
The impact of delays in receiving imported merchandise from Asia on our product availability, product mix, sales and merchandise margin;
Our expectations regarding higher oceanic shipping and domestic freight and fuel costs, and our plans to manage those cost increases;
The reliability of, and cost associated with, our sources of supply, particularly imported goods sourced from Asia and higher cost domestic goods;
Our plans to address the labor shortages at our distribution centers and stores;
Our expectations regarding increased expenses for higher wages and bonuses paid to associates, including increases in the minimum wage by States and localities and potential federal legislation increasing the minimum wage;
The potential effect of general business or economic conditions on our business including the direct and indirect effects of the COVID-19 pandemic, inflation, labor shortages, consumer spending levels, unemployment, the physical and financial health of our customers, the effectiveness and duration of government assistance programs to individuals, households and businesses to support consumer spending, and proposals to raise federal corporate tax rates;
Our expectations regarding reductions in COVID-19-related expenses and the level of shrink in fiscal 2021;
Our plans to renovate existing Family Dollar stores and build new stores in the H2 store format, including an increase in the number of stores with adult beverages, and the performance of that format on our results of operations;
Our plans and expectations relating to the introduction of additional price points above $1 in our Dollar Tree stores;
Our plans and expectations relating to new store openings and the adoption, testing, implementation and performance of new store concepts such as Dollar Tree Plus and our Combo Store format;
Our expectations regarding higher commodity and other costs associated with the build-out of new stores and the renovation of existing stores, and construction, permitting and inspection delays related to new store openings; and
The expected and possible outcome, costs, and impact of pending or potential litigation, arbitrations, other legal proceedings or governmental investigations (including the proceeding by the Food and Drug Administration).
A forward-looking statement is neither a prediction nor a guarantee of future results, events or circumstances. You should not place undue reliance on forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. Our forward-looking statements are all based on currently available operating, financial and business information. The outcome of the events described in these forward-looking statements is subject to a variety of factors, including, but not limited to, the risks and uncertainties summarized below and the more detailed discussions in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections and elsewhere in our Annual Report on Form 10-K for the fiscal year ended January 30, 2021, and in this Quarterly Report on Form 10-Q. The following risks could have a material adverse impact on our sales, costs, profitability, financial performance or implementation of strategic initiatives:
We are experiencing disruptions in our supply chain, including shipping delays, port closings and congestion, that have had and could have an adverse impact on our product availability, product mix, sales and merchandise margin.
Our profitability is vulnerable to increases in oceanic shipping costs, domestic freight and fuel costs, higher wages, substitution of higher cost domestic goods and increases in other operating costs.
The labor shortages at our distribution centers and stores has had and could have an adverse impact on the operating efficiency of our distribution centers and our ability to transport merchandise to and operate our stores, and could result in lower sales.
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If the COVID-19 pandemic in North America or at our sources of supply overseas worsens or continues longer than expected, there could be a material adverse impact on our business and results of operations.
Inflation or other adverse change or downturn in economic conditions could adversely impact our sales or profitability.
Our business and results of operations could be materially harmed if we experience a decline in consumer confidence and spending as a result of unfavorable economic conditions, for example because government assistance to households and businesses terminate or are reduced.
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, including lack of customer acceptance, shipping delays, supply chain disruptions and other factors that could affect the timeliness, cost or availability of adequate levels of necessary domestic and imported merchandise, which may have an adverse impact on our business and financial results.
Duties, tariffs or other restrictions on trade could adversely affect our financial performance.
Our supply chain may be disrupted by changes in United States trade policy with China.
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 cyber-attack could harm our ability to effectively operate and grow our business and could adversely affect our financial results.
The potential unauthorized access to customer information 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 business.
Litigation, arbitration and government proceedings may adversely affect our business, financial condition and results of operations.
Changes in laws and government regulations, including any increase in federal corporate tax rates, or our failure to adequately estimate the impact of such changes, could increase our expenses, expose us to legal risks or otherwise adversely affect us.
We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements. Moreover, new risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on our forward-looking statements.
We do not undertake to publicly update or revise any forward-looking statements after the date of this Form 10-Q, whether as a result of new information, future events, or otherwise.
Investors should also be aware that while we do, from time to time, communicate with securities analysts and others, it is against our policy to disclose to them any material, nonpublic information or other confidential commercial information. Accordingly, shareholders should not assume that we agree with any statement or report issued by any securities analyst regardless of the content of the statement or report. Furthermore, we have a policy against confirming projections, forecasts or opinions issued by others. Thus, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not our responsibility.
The Impact of COVID-19
As an essential business, our stores and distribution centers have remained open during the pandemic; however, our business trends and financial results in 2020 were materially different than in prior years. During March 2020, our Dollar Tree and Family Dollar stores began to experience a significant increase in customer demand and sales of essential products and comparable store net sales increased significantly. However, beginning the last week of March 2020 and continuing into April during the peak of the 2020 Easter selling season, comparable store net sales at our Dollar Tree stores decreased. After the 2020 Easter selling season, in both banners, we experienced an increase in demand for and sales of discretionary products and our seasonal business for the other holidays throughout 2020 was strong. Easter sales were strong in both banners during 2021. Our results of operations through the third quarter of fiscal 2020 include approximately $254.3 million of COVID-19-related expenses; these expenses totaled $22.1 million through the third quarter of fiscal 2021.
The future impact of COVID-19 on our customers and our business is difficult to predict. The course of the pandemic, including the spread of the Delta variant, the effectiveness of health measures such as vaccines, and the impact of ongoing economic stabilization efforts is uncertain and government assistance payments may not provide enough funding to support future consumer
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spending at levels experienced during the first nine months of fiscal 2021. For example, although the American Rescue Plan Act of 2021 (“Rescue Act”), which was enacted on March 11, 2021, provided U.S. government funding to address the continuing impact of COVID-19 on the economy, public health, individuals and businesses, some of the enacted benefits, including $1,400 direct payments to individuals and supplemental unemployment benefits, were temporary and have been discontinued. Given the level of volatility and uncertainty surrounding the future impact of COVID-19 on our customers, suppliers and the broader economies in the locations that we operate as well as uncertainty around the future impact on our supply chain and the global supply chain, it is challenging to predict our future operations and financial results.
For further discussion of the impacts that COVID-19 had on our financial condition and results of operations during fiscal 2020, refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended January 30, 2021.
Overview
We are a leading operator of more than 15,900 retail discount stores and we conduct our operations in two reporting segments. Our Dollar Tree segment is the leading operator of discount variety stores offering merchandise predominantly at the fixed price point of $1.00. Our Family Dollar segment operates general merchandise retail discount stores providing consumers with a selection of competitively-priced merchandise in convenient neighborhood stores.
Our net sales are derived from the sale of merchandise. Two major factors tend to affect our net sales trends. First is our success at opening new stores. Second is the performance of stores once they are open. Sales vary at our existing stores from one year to the next. We refer to this as a change in comparable store net sales, because we include only those stores that are open throughout both of the periods being compared, beginning after the first fifteen months of operation. We include sales from stores expanded or remodeled during the period in the calculation of comparable store net sales, which has the effect of increasing our comparable store net sales. The term ‘expanded’ also includes stores that are relocated. Stores that have been re-bannered 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.
At October 30, 2021, we operated stores in 48 states and the District of Columbia, as well as stores in five Canadian provinces. A breakdown of store counts and square footage by segment for the 39 weeks ended October 30, 2021 and October 31, 2020 is as follows:
39 Weeks Ended
October 30, 2021October 31, 2020
Dollar TreeFamily DollarTotalDollar TreeFamily DollarTotal
Store Count:
Beginning7,805 7,880 15,685 7,505 7,783 15,288 
New stores214 148 362 262 111 373 
Re-bannered stores(1)(1)(2)(3)
Closings(34)(45)(79)(23)(33)(56)
Ending7,984 7,982 15,966 7,741 7,865 15,606 
Relocations45 55 100 46 31 77 
Selling Square Feet (in millions):
Beginning67.4 57.7 125.1 64.6 56.7 121.3 
New stores1.9 1.3 3.2 2.3 0.9 3.2 
Re-bannered stores— — — (0.1)0.1 — 
Closings(0.3)(0.3)(0.6)(0.2)(0.2)(0.4)
Relocations0.1 0.1 0.2 0.1 0.1 0.2 
Ending69.1 58.8 127.9 66.7 57.6 124.3 
Stores are included as re-banners when they close or open, respectively.
The average size of stores opened during the 39 weeks ended October 30, 2021 was approximately 8,760 selling square feet for the Dollar Tree segment and 8,960 selling square feet for the Family Dollar segment. We believe that these size stores are in the
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ranges of our optimal sizes operationally and give our customers a shopping environment which invites them to shop longer, buy more and make return visits.
The percentage change in comparable store net sales on a constant currency basis for the 13 and 39 weeks ended October 30, 2021, as compared with the preceding year, is as follows:
13 Weeks Ended October 30, 202139 Weeks Ended October 30, 2021
Sales GrowthChange in
Customer Traffic
Change in
Average Ticket
Sales GrowthChange in
Customer Traffic
Change in
Average Ticket
Consolidated1.6 %(1.8)%3.5 %0.4 %(3.6)%4.1 %
Dollar Tree Segment0.6 %(1.1)%1.8 %1.7 %(1.4)%3.1 %
Family Dollar Segment2.7 %(3.0)%5.8 %(0.8)%(6.5)%6.1 %
Constant currency basis refers to the calculation excluding the impact of currency exchange rate fluctuations. We calculated the constant currency basis change by translating the current year’s comparable store net sales in Canada using the prior year’s currency exchange rates. We believe that the constant currency basis provides a more accurate measure of comparable store net sales performance. Comparable store net sales are positively affected by our expanded and relocated 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.
Dollar Tree Initiatives
Following the announcement of our new pricing initiative in September 2021, we increased the price point on a majority of our $1 merchandise to $1.25 in more than 100 legacy Dollar Tree stores by October 30, 2021. We have continued the rollout in November to additional stores and plan to expand the $1.25 price point initiative to more than 2,000 additional Dollar Tree stores in December 2021, and expect to complete the rollout of this initiative to all Dollar Tree stores by the end of the first quarter of fiscal 2022. We believe that the new pricing strategy will enable us to introduce new products and expand our merchandise assortment in Dollar Tree stores while maintaining great value for our customers.
We are also continuing to implement our Dollar Tree Plus initiative which introduces products priced at the $3 and $5 price points and provides our customers with extraordinary value in discretionary categories. As of October 30, 2021, we have approximately 460 Dollar Tree Plus stores and expect to have nearly 600 stores by the end of fiscal 2021, exceeding our previous target of 500 stores. We also plan to accelerate the implementation of the Dollar Tree Plus initiative in fiscal 2022 by adding the concept to an additional 1,500 stores.
The roll-out of our Crafter’s Square initiative to all of our Dollar Tree stores was completed during fiscal 2020. The Crafter’s Square assortment carries mark-ups which are higher than our average mark-up.
After a successful launch of the Instacart platform in the Family Dollar segment, we began testing the online service delivery at Dollar Tree stores in the third quarter of fiscal 2021. As of October 30, 2021, the Instacart platform covers almost 7,000 Dollar Tree stores. This enables our customers to shop online and receive same-day delivery without having to visit a store.
We believe that our Dollar Tree initiatives have and will continue to positively affect our comparable store net sales and earnings.
Family Dollar Initiatives
We are executing several initiatives in our Family Dollar stores to increase sales. In March 2021, we announced the development of a new combination store format, which we refer to as a Combo Store, that leverages the strengths of the Dollar Tree and Family Dollar brands under one roof. We have taken Family Dollar’s great value and assortment and blended in select Dollar Tree merchandise categories to create a new store format targeted for small towns and rural communities. The Combo store provides another way to introduce the multi-price assortment to Dollar Tree customers and the one-dollar assortment to Family Dollar customers. As of October 30, 2021, we had 155 Combo Stores in operation. Due to the success of the initiative, we plan to accelerate expansion of the program in fiscal 2022, and anticipate adding 400 new, renovated, or relocated Combo Stores in fiscal 2022.
After a successful pilot program in 2020, we entered into a partnership with Instacart, an online merchandise delivery platform, in February 2021 that enables our Family Dollar customers to shop online and receive same-day delivery of merchandise without having to visit a store. The Instacart platform covers approximately 6,000 Family Dollar stores across the United States.
We are also continuing to execute our store optimization programs. Our H2 stores have significantly improved merchandise offerings throughout the store, including the addition of approximately 20 Dollar Tree $1.00 merchandise sections and establishing a minimum number of freezer and cooler doors. These stores have higher customer traffic and provide a higher average comparable store net sales lift, when compared to non-renovated stores, in the first year following renovation. H2 stores perform well in a variety
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of locations and especially in locations where our Family Dollar stores have been most challenged in the past. As of October 30, 2021, we have approximately 3,750 H2 stores. We have renovated more than 1,250 stores to this format in fiscal 2021 and have also built new stores in this format. In addition, we plan to add adult beverage to 185 stores in fiscal 2021. We believe the addition of adult beverage to our assortment will drive traffic to our stores.
Additional Considerations
The following trends or uncertainties have already impacted or could impact our business or results of operations during 2021 or in the future:
Shipping Delays. We rely heavily on Trans-Pacific shipping to acquire merchandise for our stores, and we are experiencing significant shipping delays as a result of the shipping capacity shortage which have negatively impacted our sales and the availability of product in the stores. We are also experiencing issues with port congestion and pandemic-related port closings and ship diversions. If the shipping delays do not improve they would continue to have a material adverse impact on product availability and product mix, and on our sales and merchandise margin. Sales could be negatively impacted if imported goods do not arrive in time to stock our stores, including the timely delivery of adequate levels of seasonal merchandise for the important Christmas holidays. If higher cost domestic goods are substituted for delayed imports, our merchandise margin could be adversely impacted. To address delays in shipments, we are prioritizing product categories for shipment in an effort to obtain seasonal assortments in advance of holiday seasons, adding and evaluating the use of long-term and short-term chartered vessels, and adding alternative sources of supply from North American factories.
Freight Costs. We are experiencing significantly higher international and domestic freight costs as a result of disruptions in the global supply chain. This trend is likely to continue. The combination of increased demand and limited availability of Trans-Pacific shipping capacity has caused spot market prices to increase substantially. We are a large importer of merchandise from Asia and particularly sensitive to freight costs. Freight costs for fiscal 2021 are now expected to be $2.00 per diluted share higher than fiscal year 2020. We are working to reduce our freight costs by using chartered vessels, evaluating and securing long-term contracts with our carriers for vessels dedicated in large part to our needs, and adding alternative sources of supply that do not rely on Trans-Pacific shipping.
Labor Shortage. We are experiencing a shortage of associates and applicants to fill staffing requirements at our distribution centers and stores due to the current labor shortage affecting businesses. This has adversely affected the operating efficiency of our distribution centers and our ability to transport merchandise from our distribution centers to our stores. The steps we have taken to address the labor shortage at our distribution centers include hosting national hiring events, paying sign-on bonuses, offering enhanced wages in select competitive markets and paying tuition reimbursement.
Minimum Wage Increases. In 2021, the minimum wage has increased in certain States and localities and we expect additional minimum wage increases by States and localities in 2022. In addition, the federal minimum wage may increase depending on the outcome of legislation proposed in Congress. Minimum wage increases in States and localities are expected to increase our costs by $45.0 to $50.0 million in 2021.
Build-out and Construction Costs and Delays. We have experienced higher commodity and other costs associated with the build-out of new stores and the renovation of existing stores. In addition, we have experienced delays in new store openings due to inspection, permitting and contractor delays. We anticipate these increased costs and delays may continue for the foreseeable future.
COVID-19 Costs. The amount of COVID-19-related costs for premium pay including bonuses, supplies, protective equipment, and similar items was $279.0 million in fiscal 2020. We expect these costs to be approximately $30.0 million in fiscal 2021.
Shrink Costs. We expect shrink at cost as a percentage of net sales to be significantly lower in fiscal 2021 than fiscal 2020.
For additional information regarding the risks related to our business and operations, including risks relating to the implementation of our Dollar Tree and Family Dollar initiatives, see Item 1A. Risk Factors in this Form 10-Q.
Results of Operations
Our results of operations and period-over-period changes are discussed in the following section. Note that 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 and operating income margin are calculated by dividing the applicable amount by total revenue.

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Net Sales
13 Weeks Ended39 Weeks Ended
October 30,October 31,Percentage
Change
October 30,October 31,Percentage
Change
(dollars in millions)2021202020212020
Net sales$6,415.4 $6,176.7 3.9 %$19,232.4 $18,741.1 2.6 %
Comparable store net sales change,
    on a constant currency basis
1.6 %5.1 %0.4 %6.5 %
The increase in net sales in the 13 weeks ended October 30, 2021 was a result of sales of $177.5 million at new stores, and comparable store net sales increases in the Family Dollar and Dollar Tree segments.
Enterprise comparable store net sales increased 1.6% on a constant currency basis in the 13 weeks ended October 30, 2021, as a result of a 3.5% increase in average ticket, partially offset by a 1.8% decrease in customer traffic. Comparable store net sales increased the same 1.6% when including the impact of Canadian currency fluctuations. On a constant currency basis, comparable store net sales increased 2.7% in the Family Dollar segment and 0.6% in the Dollar Tree segment.
The increase in net sales in the 39 weeks ended October 30, 2021 was a result of sales of $514.9 million at new stores and a comparable store net sales increase in the Dollar Tree segment, partially offset by a comparable store net sales decrease in the Family Dollar segment.
Enterprise comparable store net sales increased 0.4% on a constant currency basis in the 39 weeks ended October 30, 2021, as a result of a 4.1% increase in average ticket, partially offset by a 3.6% decrease in customer traffic. Comparable store net sales increased 0.5% when including the impact of Canadian currency fluctuations. On a constant currency basis, comparable store net sales increased 1.7% in the Dollar Tree segment and decreased 0.8% in the Family Dollar segment. In the same period last year, the Family Dollar segment had a comparable store net sales increase of 11.2% as we saw an increase in demand for essential products in the early stages of the COVID-19 pandemic. The Dollar Tree segment had a comparable store net sales increase of 2.1% in the same period last year, as the higher average ticket was partially offset by lower traffic resulting from the COVID-19 pandemic which negatively affected Easter sales.
Gross Profit
13 Weeks Ended39 Weeks Ended
October 30,October 31,Percentage
Change
October 30,October 31,Percentage
Change
(dollars in millions)2021202020212020
Gross profit$1,763.7 $1,924.1 (8.3)%$5,588.8 $5,635.2