Quarterly report pursuant to Section 13 or 15(d)

Segments

v3.20.2
Segments
 6 Months Ended
Aug. 01, 2020
Segment Reporting [Abstract]  
Segments Segments
We operate a chain of more than 15,400 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 at the fixed price of $1.00. The Dollar Tree segment includes our operations under the “Dollar Tree” and “Dollar Tree Canada” brands, 13 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.
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 and support costs consist 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 centers in Chesapeake, Virginia and Matthews, North Carolina. During fiscal 2019, we consolidated our Matthews, North Carolina store support center with our store support center in Chesapeake, Virginia. We continue to own our facility in Matthews, North Carolina.
Information for our segments, as well as for Corporate and support, including the reconciliation to Income before income taxes, is as follows:
 
 
13 Weeks Ended
 
26 Weeks Ended
 
 
August 1,
 
August 3,
 
August 1,
 
August 3,
(in millions)
 
2020
 
2019
 
2020
 
2019
Condensed Consolidated Income Statement Data:
 
 
 
 
 
 
 
 
Net sales:
 
 
 
 
 
 
 
 
Dollar Tree
 
$
3,176.9

 
$
2,957.7

 
$
6,254.4

 
$
5,917.1

Family Dollar
 
3,100.7

 
2,782.9

 
6,310.0

 
5,632.2

Consolidated Net sales
 
$
6,277.6

 
$
5,740.6

 
$
12,564.4

 
$
11,549.3

 
 
 
 
 
 
 
 
 
Gross profit:
 
 
 
 
 
 
 
 
Dollar Tree
 
$
1,071.9

 
$
999.0

 
$
2,052.6

 
$
2,020.2

Family Dollar
 
844.3

 
649.5

 
1,658.5

 
1,355.5

Consolidated Gross profit
 
$
1,916.2

 
$
1,648.5

 
$
3,711.1

 
$
3,375.7

 
 
 
 
 
 
 
 
 
Operating income (loss):
 
 
 
 
 
 
 
 
Dollar Tree
 
$
306.6

 
$
337.1

 
$
588.6

 
$
731.3

Family Dollar
 
165.1

 
16.8

 
340.6

 
108.7

Corporate and support
 
(96.8
)
 
(85.0
)
 
(188.4
)
 
(185.6
)
Consolidated Operating income
 
374.9

 
268.9

 
740.8

 
654.4

Interest expense, net
 
34.8

 
40.1

 
75.0

 
81.5

Other expense, net
 
0.2

 
0.4

 
0.7

 
0.6

Income before income taxes
 
$
339.9

 
$
228.4

 
$
665.1

 
$
572.3

 
 
As of
 
 
August 1,
 
February 1,
 
August 3,
(in millions)
 
2020
 
2020
 
2019
Condensed Consolidated Balance Sheet Data:
 
 
 
 
 
 
Goodwill:
 
 
 
 
 
 
Dollar Tree
 
$
423.5

 
$
423.8

 
$
412.3

Family Dollar
 
1,559.5

 
1,559.5

 
1,884.0

Consolidated Goodwill
 
$
1,983.0

 
$
1,983.3

 
$
2,296.3

 
 
 
 
 
 
 
Total assets:
 
 
 
 
 
 
Dollar Tree
 
$
8,531.2

 
$
7,694.0

 
$
7,147.2

Family Dollar
 
11,689.7

 
11,484.9

 
11,982.2

Corporate and support
 
450.1

 
395.7

 
364.4

Consolidated Total assets
 
$
20,671.0

 
$
19,574.6

 
$
19,493.8

 
 
 
 
 
 
 

*Goodwill is reassigned between segments when previously acquired stores are re-bannered between segments. The goodwill related to previously acquired re-bannered stores in the 26 weeks ended August 1, 2020 was not material. In the 26 weeks ended August 3, 2019, we reassigned $36.1 million of goodwill from Family Dollar to Dollar Tree as a result of re-bannering.
Disaggregated Revenue
The following table summarizes net sales by merchandise category for our segments:
 
 
13 Weeks Ended
 
26 Weeks Ended
 
 
August 1,
 
August 3,
 
August 1,
 
August 3,
(in millions)
 
2020
 
2019
 
2020
 
2019
Dollar Tree segment net sales by
    merchandise category:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumable
 
$
1,528.2

 
48.1
%
 
$
1,514.4

 
51.2
%
 
$
3,214.7

 
51.4
%
 
$
3,011.8

 
50.9
%
Variety
 
1,641.1

 
51.7
%
 
1,440.4

 
48.7
%
 
2,952.1

 
47.2
%
 
2,798.8

 
47.3
%
Seasonal
 
7.6

 
0.2
%
 
2.9

 
0.1
%
 
87.6

 
1.4
%
 
106.5

 
1.8
%
Total Dollar Tree segment net sales
 
$
3,176.9

 
100.0
%
 
$
2,957.7

 
100.0
%
 
$
6,254.4

 
100.0
%
 
$
5,917.1

 
100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Family Dollar segment net sales by
    merchandise category:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumable
 
$
2,289.7

 
73.8
%
 
$
2,144.6

 
77.1
%
 
$
4,821.8

 
76.4
%
 
$
4,347.2

 
77.2
%
Home products
 
289.8

 
9.3
%
 
204.2

 
7.3
%
 
562.6

 
8.9
%
 
446.3

 
7.9
%
Apparel and accessories
 
206.3

 
6.7
%
 
176.5

 
6.3
%
 
360.4

 
5.7
%
 
350.3

 
6.2
%
Seasonal and electronics
 
314.9

 
10.2
%
 
257.6

 
9.3
%
 
565.2

 
9.0
%
 
488.4

 
8.7
%
Total Family Dollar segment net sales
 
$
3,100.7

 
100.0
%
 
$
2,782.9

 
100.0
%
 
$
6,310.0

 
100.0
%
 
$
5,632.2

 
100.0
%