Dollar Tree, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

SEGMENTS

SEGMENTS

3 Months Ended

May 04, 2019

Segments

The Company operates a chain of more than 15,200 retail discount stores in 48 states and five Canadian provinces. The Company’s operations are conducted in two reporting business segments: Dollar Tree and Family Dollar. The Company defines its segments as those operations whose results its 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 at the fixed price of $1.00. The Dollar Tree segment includes the Company’s operations under the “Dollar Tree” and “Dollar Tree Canada” brands, 12 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 the Company’s operations under the “Family Dollar” brand and 11 distribution centers.

The Company measures the results of its segments using, among other measures, each segment’s net sales, gross profit and operating income. The CODM reviews these metrics for each of the Company’s reporting segments. The Company 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. In the current quarter, the Company identified Corporate and support costs, mainly store support center costs that are considered shared services, and excluded these selling, general and administrative costs from its two reporting business segments. These costs include operating expenses for the Company’s store support centers in Chesapeake, Virginia and Matthews, North Carolina. During fiscal 2019 the Company is consolidating its Matthews, North Carolina store support center with its store support center in Chesapeake, Virginia in its newly-completed office tower in the Summit Pointe development in Chesapeake, Virginia. Amounts for the 13 weeks ended May 5, 2018 have been reclassified to be comparable to the current period presentation.

Information for the Company’s segments, as well as for Corporate and support, including the reconciliation to Income before income taxes, is as follows:



	13 Weeks Ended
	May 4,			May 5,
(in millions)	2019			2018
Condensed Consolidated Income Statement Data:
Net sales:
Dollar Tree	$	2,959.3		$	2,784.5
Family Dollar	2,849.4			2,769.2
Consolidated Net sales	$	5,808.7		$	5,553.7

Gross profit:
Dollar Tree	$	1,021.2		$	960.8
Family Dollar	706.0			738.8
Consolidated Gross profit	$	1,727.2		$	1,699.6

Operating income (loss):
Dollar Tree	$	390.9		$	372.7
Family Dollar	90.4			143.8
Corporate and support	(95.8		)	(78.9		)
Consolidated Operating income	385.5			437.6
Interest expense, net	41.4			230.0
Other expense, net	0.2			0.2
Income before income taxes	$	343.9		$	207.4



	As of
	May 4,		February 2,		May 5,
(in millions)	2019		2019		2018
Condensed Consolidated Balance Sheet Data:
Goodwill:
Dollar Tree	$	386.9	$	376.5	$	346.1
Family Dollar	1,909.0		1,920.1		4,678.1
Consolidated Goodwill	$	2,295.9	$	2,296.6	$	5,024.2

Total assets:
Dollar Tree	$	6,996.0	$	3,992.6	$	3,598.9
Family Dollar	12,004.3		9,144.7		11,892.9
Corporate and support	354.0		363.9		335.3
Consolidated Total assets	$	19,354.3	$	13,501.2	$	15,827.1

*Goodwill is reassigned between segments when stores are re-bannered between segments. In the 13 weeks ended May 4, 2019, the Company reassigned $11.1 million of goodwill from Family Dollar to Dollar Tree as a result of re-bannering. There were no stores re-bannered between segments in the 13 weeks ended May 5, 2018.