Discontinued Operations |
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| Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Discontinued Operations | Discontinued Operations On July 5, 2025, we completed our sale of the Family Dollar business to 1959 Holdings, LLC. Total cash generated from the sale approximated $793 million, consisting of approximately $680 million of net proceeds, including from settlement of net working capital and net indebtedness, and approximately $113 million monetized primarily through a reduction of net working capital prior to the date of sale. The Company has continuing involvement with Family Dollar under a transition services agreement, through which the Company and Family Dollar continue to provide certain services to each other for a period of 18 months following the date of sale. For the 13 and 26 weeks ended August 1, 2026, we recorded $17.7 million and $38.8 million, respectively, of net income from transition services between the two companies. For the 13 and 26 weeks ended August 2, 2025, we recorded $8.0 million of net income from transition services between the two companies. In addition, the Company is guaranteeing lease obligations for certain Family Dollar stores amounting to $20.0 million and $10.0 million in the second and third year following the date of sale, respectively. The fair value of the lease guarantee is immaterial.
The results of Family Dollar are presented as discontinued operations in the accompanying unaudited Condensed Consolidated Income Statements for the prior year comparable period.
Financial Information of Discontinued Operations
“Income from discontinued operations, net of tax” in the accompanying unaudited Condensed Consolidated Income Statements for the prior year comparable period reflects the after-tax results of the Family Dollar business and does not include any allocation of general corporate overhead expense or interest expense of the Company.
The following table summarizes the results of operations of the Family Dollar business that are being reported as discontinued operations:
Assets and liabilities classified as held for sale are required to be recorded at the lower of carrying value or fair value less costs to sell. As of May 3, 2025, we remeasured the fair value of the Family Dollar business, including costs to sell and recorded an additional valuation allowance of $258.4 million. On July 5, 2025, the effective date of the sale, we recorded an additional loss on disposal totaling $144.1 million. The fair value of the Family Dollar business was estimated using the expected sale price as negotiated with the third party buyer. The valuation allowance was recorded within “Loss on held for sale and disposal of discontinued operations” in the summarized results of operations of discontinued operations for the 13 and 26 weeks ended August 2, 2025.
Capital expenditures related to discontinued operations were $77.8 million for the 26 weeks ended August 2, 2025.
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