Annual report pursuant to Section 13 and 15(d)

Segment Reporting

v3.20.1
Segment Reporting
 12 Months Ended
Feb. 01, 2020
Segment Reporting [Abstract]  
Segment Reporting
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 CODM regularly reviews to analyze performance and allocate resources.
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 year, 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 consolidated its Matthews, North Carolina store support center with its store support center in Chesapeake, Virginia. The Company continues to own its facility in Matthews, North Carolina. Amounts for the years ended February 2, 2019 and February 3, 2018 have been reclassified to be comparable to the current year presentation.
Information for the Company’s segments, as well as for Corporate and support, including the reconciliation to Income (loss) before income taxes, is as follows:
 
 
Year Ended
 
 
February 1,
 
February 2,
 
February 3,
(in millions)
 
2020
 
2019
 
2018
Consolidated Statements of Operations Data:
 
 
 
 
 
 
Net sales:
 
 
 
 
 
 
Dollar Tree
 
$
12,507.9

 
$
11,712.1

 
$
11,164.4

Family Dollar
 
11,102.9

 
11,111.2

 
11,081.1

Consolidated Net sales
 
$
23,610.8

 
$
22,823.3

 
$
22,245.5

 
 
 
 
 
 
 
Gross profit:
 
 
 
 
 
 
Dollar Tree
 
$
4,342.9

 
$
4,137.5

 
$
3,998.5

Family Dollar
 
2,697.8

 
2,810.0

 
3,023.4

Consolidated Gross profit
 
$
7,040.7

 
$
6,947.5

 
$
7,021.9

 
 
 
 
 
 
 
Operating income (loss):
 
 
 
 
 
 
Dollar Tree
 
$
1,657.8

 
$
1,645.9

 
$
1,616.8

Family Dollar
 
(81.0
)
 
(2,320.0
)
 
630.0

Corporate and support
 
(314.6
)
 
(265.4
)
 
(247.7
)
Consolidated Operating income (loss)
 
1,262.2

 
(939.5
)
 
1,999.1

Interest expense, net
 
162.1

 
370.0

 
301.8

Other expense (income), net
 
1.4

 
(0.5
)
 
(6.7
)
Income (loss) before income taxes
 
$
1,098.7

 
$
(1,309.0
)
 
$
1,704.0

 
 
 
 
 
 
 
Depreciation and amortization expense:
 
 
 
 
 
 
Dollar Tree
 
$
277.7

 
$
254.0

 
$
241.1

Family Dollar
 
339.1

 
346.5

 
356.1

Corporate and support
 
28.9

 
20.9

 
14.3

Consolidated depreciation and amortization expense
 
$
645.7

 
$
621.4

 
$
611.5

 
 
As of
 
 
February 1,
 
February 2,
(in millions)
 
2020
 
2019
Consolidated Balance Sheet Data:
 
 
 
 
Goodwill:
 
 
 
 
Dollar Tree
 
$
423.8

 
$
376.5

Family Dollar
 
1,559.5

 
1,920.1

Consolidated Goodwill
 
$
1,983.3

 
$
2,296.6

 
 
 
 
 
Total assets:
 
 
 
 
Dollar Tree
 
$
7,694.0

 
$
3,992.6

Family Dollar
 
11,484.9

 
9,144.7

Corporate and support
 
395.7

 
363.9

Consolidated Total assets
 
$
19,574.6

 
$
13,501.2

 
 
 
 
 
Additions to property, plant and equipment:
 
 
 
 
Dollar Tree
 
$
547.5

 
$
455.6

Family Dollar
 
425.2

 
251.0

Corporate and support
 
62.1

 
110.5

Consolidated additions to property, plant and equipment
 
$
1,034.8

 
$
817.1

Goodwill is reassigned between segments when stores are re-bannered between segments. In 2019 and 2018, the Company reassigned $47.6 million and $31.0 million, respectively, of goodwill from Family Dollar to Dollar Tree as a result of re-bannering. In addition, in the fourth quarters of 2019 and 2018, the Company recorded goodwill impairment charges of $313.0 million and $2.73 billion, respectively, to write down the Family Dollar goodwill. Refer to Note 3 for additional detail regarding impairment of the Family Dollar goodwill.
Disaggregated Revenue
The following table summarizes net sales by merchandise category for the Company’s segments:
 
 
Year Ended
 
 
February 1,
 
February 2,
 
February 3,
(in millions)
 
2020
 
2019
 
2018
Dollar Tree segment net sales by
    merchandise category:
 
 
 
 
 
 
 
 
 
 
 
 
Consumable
 
$
6,155.3

 
49.2
%
 
$
5,703.8

 
48.7
%
 
$
5,470.6

 
49.0
%
Variety
 
5,732.1

 
45.8
%
 
5,457.8

 
46.6
%
 
5,169.1

 
46.3
%
Seasonal
 
620.5

 
5.0
%
 
550.5

 
4.7
%
 
524.7

 
4.7
%
Total Dollar Tree segment net sales
 
$
12,507.9

 
100.0
%
 
$
11,712.1

 
100.0
%
 
$
11,164.4

 
100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Family Dollar segment net sales by
    merchandise category:
 
 
 
 
 
 
 
 
 
 
 
 
Consumable
 
$
8,604.7

 
77.5
%
 
$
8,466.7

 
76.2
%
 
$
8,344.1

 
75.3
%
Home products
 
866.0

 
7.8
%
 
911.1

 
8.2
%
 
930.8

 
8.4
%
Apparel and accessories
 
644.0

 
5.8
%
 
700.0

 
6.3
%
 
731.3

 
6.6
%
Seasonal and electronics
 
988.2

 
8.9
%
 
1,033.4

 
9.3
%
 
1,074.9

 
9.7
%
Total Family Dollar segment net sales
 
$
11,102.9

 
100.0
%
 
$
11,111.2

 
100.0
%
 
$
11,081.1

 
100.0
%