DOLLAR TREE INC
For the period ended Aug 3, 2024. Filed Sep 4, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Aug 3, 2024 · Filed Sep 4, 2024
DLTR$131.14-4.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-05-04; filed 2024-06-05.
0000935703-24-000029
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-08-03; filed 2024-09-04.
0000935703-24-000041
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 113 previous paragraphs and 131 current paragraphs.
67 unchanged; 42 reworded; 19 added; 4 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
•Management’s estimates associated with our critical accounting estimates, including self-insurance liabilities for general liability claims.
Current report
•The effective tax rate was 24.0% and remained unchanged as compared to the prior year quarter.
Current report
99 Cents Only Stores Acquisition. During the second quarter of fiscal 2024, we acquired designation rights for up to 170 leases of 99 Cents Only Stores across Arizona, California, Nevada and Texas. The designation rights were acquired following the bankruptcy of 99 Cents Only Stores, which provided us an attractive opportunity to secure leases in priority markets. We have secured the leases for 164 of these stores and have opened approximately half of these stores under our Dollar Tree segment. We expect to open the remaining stores during the second half of fiscal 2024 under our Dollar Tree segment.
Current report
General Liability Claims Development. Our self-insured general liability claims related to customer accidents and other incidents at our stores continue to develop unfavorably due to the rising costs to reimburse, settle, or litigate the claims. As a result, our actuarially determined liabilities were increased during the second quarter, contributing to a $64.3 million increase in our general liability claim expenses compared to the prior year quarter. This increase was comprised of a $45.3 million increase in the Dollar Tree segment and a $19.0 million increase in the Family Dollar segment.
Current report
The liabilities related to our self-insurance programs, which include general liability claims, are estimates that require judgment and the use of assumptions. Refer to our “Critical Accounting Estimates and Assumptions” within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for more information on the estimates and assumptions related to these liabilities. Such estimates are inherently uncertain, and future changes in claim trends and assumptions could result in significant adjustments to our liabilities, which could materially and adversely affect our results of operations.
Current report
The increase in net sales in the 13 weeks ended August 3, 2024 was a result of the comparable store net sales increase in the Dollar Tree segment, and net sales of $336.2 million at non-comparable stores. The increase was partially offset by lower sales on the Family Dollar segment resulting from approximately 655 stores closed under the portfolio optimization review since the same period last year, and a comparable store net sales decrease for that segment. For the 13 weeks ended August 3, 2024, net sales at non-comparable stores included $10.7 million from the Family Dollar stores that were closed under the portfolio optimization review in the second quarter of this year.
Current report
Gross profit margin increased during the 13 weeks ended August 3, 2024 due to an 80 basis point decrease in cost of sales. The cost of sales rate decreased to 70.0% during the 13 weeks ended August 3, 2024 from 70.8% during the same period last year primarily due to lower freight costs, partially offset by increased sales of higher cost consumable merchandise, higher occupancy costs on the Dollar Tree segment resulting from the loss of leverage from the low single-digit comparable store net sales increase, and higher distribution costs on the Family Dollar segment.
Current report
The selling, general and administrative expense rate increased 200 basis points during the 13 weeks ended August 3, 2024 primarily due to unfavorable development of general liability claims, higher depreciation expense from store investments, temporary labor on the Dollar Tree segment to support our multi-price rollout, higher utilities costs, and loss of leverage from the low single-digit comparable store net sales increase. The increases were partially offset by lower incentive compensation costs.
Current report
Interest expense, net increased $4.7 million in the 13 weeks ended August 3, 2024 compared to the same period last year, due to a decrease in interest income resulting from lower invested cash, and interest incurred for short-term borrowings under our commercial paper program. There were no borrowings under our commercial paper program in the same period last year.
Current report
Interest expense, net increased $3.2 million in the 26 weeks ended August 3, 2024 compared to the same period last year, due to a decrease in interest income resulting from lower invested cash, and interest incurred for short-term borrowings under our commercial paper program. There were no borrowings under our commercial paper program in the same period last year.
Current report
The effective tax rate was 24.0% for the 13 weeks ended August 3, 2024 and remained unchanged as compared to the prior year quarter.
Current report
Net sales for the Dollar Tree segment increased $426.0 million, or 5.5%, during the 26 weeks ended August 3, 2024 compared to the same period last year due to an increase in comparable store net sales of 1.5%, and net sales of $401.6 million at non-comparable stores. Customer traffic increased 2.1% and average ticket decreased 0.6%.
Current report
Gross profit margin in the Dollar Tree segment increased to 34.2% during the 13 weeks ended August 3, 2024 from 33.4% during the same period last year due to an 80 basis point decrease in cost of sales. The cost of sales rate decreased to 65.8% during the 13 weeks ended August 3, 2024 from 66.6% during the same period last year primarily due to lower freight costs, partially offset by increased sales of higher cost consumable merchandise and increased occupancy costs resulting from the loss of leverage from the low single-digit comparable store net sales increase.
Current report
Gross profit margin in the Dollar Tree segment increased to 34.8% during the 26 weeks ended August 3, 2024 from 34.4% during the same period last year due to a 40 basis point decrease in cost of sales. The cost of sales rate decreased to 65.2% during the 26 weeks ended August 3, 2024 from 65.6% during the same period last year primarily due to lower freight costs, partially offset by increased sales of higher cost consumable merchandise, increased shrink costs resulting from unfavorable inventory results, increased occupancy costs resulting from the loss of leverage from the low single-digit comparable store net sales increase and higher distribution costs.
Current report
Operating income margin for the Dollar Tree segment decreased to 10.5% during the 26 weeks ended August 3, 2024 from 12.0% during the same period last year as a result of an increase in the selling, general and administrative expense rate, partially offset by the gross profit margin increase noted above. The selling, general and administrative expense rate increased 195 basis points primarily due to unfavorable development of general liability claims, higher depreciation expense from store investments, temporary labor to support our multi-price rollout, higher utilities costs, and loss of leverage from the low single-digit comparable store net sales increase.
Current report
Net sales for the Family Dollar segment decreased $66.5 million, or 1.0%, during the 26 weeks ended August 3, 2024 compared to the same period last year resulting from approximately 655 stores closed under the portfolio optimization review since the same period last year. Comparable store net sales were flat. Net sales at non-comparable stores totaled $445.3 million and included $189.9 million of sales from the stores that were closed under the portfolio optimization review in the first half of this year. Customer traffic increased 0.8% and average ticket decreased 0.8%.
Current report
Gross profit margin in the Family Dollar segment increased to 24.9% during the 13 weeks ended August 3, 2024 from 24.4% during the same period last year due to a 50 basis point decrease in cost of sales. The cost of sales rate decreased to 75.1% during the 13 weeks ended August 3, 2024 from 75.6% during the same period last year primarily due to lower freight costs and lower occupancy costs resulting from the store closures in connection with the portfolio optimization review, partially offset by increased sales of higher cost consumable merchandise, higher distribution costs, and higher dated product markdowns.
Current report
Gross profit margin in the Family Dollar segment increased to 25.0% during the 26 weeks ended August 3, 2024 from 24.6% during the same period last year due to a 40 basis point decrease in cost of sales. The cost of sales rate decreased to 75.0% during the 26 weeks ended August 3, 2024 from 75.4% during the same period last year primarily due to lower freight costs and lower occupancy costs resulting from the store closures in connection with the portfolio optimization review, partially offset by increased sales of higher cost consumable merchandise, higher distribution costs, and higher dated product markdowns.
Current report
Operating income (loss) margin for the Family Dollar segment decreased to (0.4)% during the 13 weeks ended August 3, 2024 from 0.3% during the same period last year as a result of an increase in the selling, general and administrative expense rate, partially offset by the gross profit margin increase noted above. The selling, general and administrative expense rate increased 130 basis points primarily due to higher depreciation expense from store investments, unfavorable development of general liability claims, higher professional fees related to the review of Family Dollar strategic alternatives, and the loss of leverage from the comparable store net sales decrease.
Removed paragraphs (4)
Previous report
•The effective tax rate increased to 24.2% compared to 24.1%.
Previous report
Interest expense, net decreased $1.5 million in the 13 weeks ended May 4, 2024 compared to the same period last year, resulting from higher interest income earned on investments.
Previous report
Gross profit margin in the Dollar Tree segment increased to 35.4% during the 13 weeks ended May 4, 2024 from 35.3% during the same period last year due to a 10 basis point decrease in cost of sales. The cost of sales rate decreased to 64.6% during the 13 weeks ended May 4, 2024 from 64.7% during the same period last year primarily due to lower freight costs, partially offset by increased sales of higher cost consumable merchandise and increased shrink costs resulting from unfavorable physical inventory results.
Previous report
Gross profit margin in the Family Dollar segment increased to 25.2% during the 13 weeks ended May 4, 2024 from 24.8% during the same period last year due to a 40 basis point decrease in cost of sales. The cost of sales rate decreased to 74.8% during the 13 weeks ended May 4, 2024 from 75.2% during the same period last year primarily due to lower freight costs, partially offset by cost increases due to inflation and increased sales of higher cost consumable merchandise.
Reworded paragraphs (42)
Previous wording
•Our expectations regarding the implementation and impact of investments in our technology infrastructure and the design and implementation of internal controls around our technology transformation;
Current wording
•Our expectations regarding the implementation and impact of investments in our technology and the design and implementation of internal controls around our technology transformation;
Previous wording
•The potential effect of general business or economic conditions on our business and our customers, including the direct and indirect effects of inflation, interest rates and government benefits;
Current wording
•The potential effect of general business or economic conditions on our business and our customers, including the direct and indirect effects of inflation and interest rates on our sales and our operating costs and income;
Previous wording
•The impacts of tornado damage to our Dollar Tree distribution center in Marietta, Oklahoma, including expectations regarding inventory and property damage, related losses, the availability of insurance coverage and expected insurance recoveries, changes within our supply chain network and our customer shopping experience;
Current wording
•The impacts of tornado damage to our Dollar Tree distribution center in Marietta, Oklahoma, including expectations regarding inventory and property losses, the availability of insurance coverage and expected insurance recoveries, changes within our supply chain network and our customer shopping experience;
Previous wording
•Our expectations regarding the impact of inflation and interest rates on our business;
Current wording
•Risks related to inflation and interest rates;
Previous wording
•Our expectations regarding our commercial paper program, including our expected use of proceeds and repayment sources, and supply chain finance program; and
Current wording
•Our expectations regarding our commercial paper program and supply chain finance program;
Previous wording
•Our cash needs, including our ability to fund our future capital expenditures and working capital requirements.
Current wording
•Our liquidity and cash needs, including our ability to fund our future capital expenditures and working capital requirements; and
Previous wording
•Legal proceedings may adversely affect our reputation, business, results of operations or financial condition.
Current wording
•Legal proceedings may adversely affect our reputation and business, and higher costs related to reimbursing, settling, or litigating claims may impact our results of operations or financial condition.
Previous wording
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.
Current wording
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.
Previous wording
We are a leading operator of more than 16,300 retail discount stores and conduct our operations through two reporting segments. Our Dollar Tree segment is the leading operator of discount variety stores offering merchandise predominantly at the opening price point of $1.25, with additional offerings at $3, $4 and $5 price points. Our Family Dollar segment operates general merchandise retail discount stores providing consumers with a selection of competitively-priced merchandise in convenient neighborhood stores.
Current wording
We are a leading operator of more than 16,300 retail discount stores and conduct our operations through two reporting segments. Our Dollar Tree segment is the leading operator of discount variety stores offering merchandise predominantly at the opening price point of $1.25, with additional offerings at higher price points. Our Family Dollar segment operates general merchandise retail discount stores providing consumers with a selection of competitively-priced merchandise in convenient neighborhood stores.
Previous wording
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 which can be impacted by a number of factors including operational performance, competition, inflation and changes in the product assortment, pricing, or quality. 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, relocated or remodeled during the period in the calculation of comparable store net sales, which has the effect of increasing our comparable store net sales. Stores that have been re-bannered (i.e., Family Dollar stores converted to Dollar Tree stores, or vice versa) 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. Sales that are excluded from the calculation of comparable store net sales are referred to as non-comparable store sales and consist of sales from new stores open fifteen months or less and stores that are closed permanently or expected to be closed for more than 90 days.
Current wording
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 which can be impacted by a number of factors including operational performance, competition, inflation, consumer buying preference and changes in the product assortment, pricing, or quality. 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, relocated or remodeled during the period in the calculation of comparable store net sales, which has the effect of increasing our comparable store net sales. Stores that have been re-bannered (i.e., Family Dollar stores converted to Dollar Tree stores, or vice versa) 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. Sales that are excluded from the calculation of comparable store net sales are referred to as non-comparable store sales and consist of sales from new stores open fifteen months or less and stores that are closed permanently or expected to be closed for more than 90 days.
Previous wording
•Net sales increased 4.2% to $7,626.4 million, due to a 1.0% enterprise-wide comparable store net sales increase and net sales of $457.4 million at non-comparable stores.
Current wording
•Net sales increased 0.7% to $7,372.7 million, primarily due to a 0.7% enterprise-wide comparable store net sales increase.
Previous wording
•Gross profit, as a percentage of net sales, increased 30 basis points to 30.8%, primarily due to lower freight costs, offset partially by increased sales of higher cost consumable merchandise and higher shrink.
Current wording
•Gross profit, as a percentage of net sales, increased 80 basis points to 30.0%, primarily due to lower freight costs, partially offset by increased sales of higher cost consumable merchandise, and increased occupancy and distribution costs.
Previous wording
•Selling, general and administrative expenses, as a percentage of total revenues, increased 50 basis points to 25.3%, primarily due to an increase in temporary labor on the Dollar Tree segment to support our multi-price rollout, severance and retention-related costs for store closures on the Family Dollar segment, and higher depreciation expense, offset partially by decreases in legal costs on the Family Dollar segment.
Current wording
•Selling, general and administrative expenses, as a percentage of total revenues, increased 200 basis points to 27.3%, primarily due to unfavorable development of general liability claims, higher depreciation expense from store investments, increases in temporary labor on the Dollar Tree segment to support our multi-price rollout, and the loss of leverage from the low single-digit comparable store net sales increase, partially offset by lower incentive compensation.
Previous wording
•Operating income, as a percentage of total revenues, decreased 20 basis points to 5.5%.
Current wording
•Operating income, as a percentage of total revenues, decreased 110 basis points to 2.8%.
Previous wording
•Net income was $300.1 million, or $1.38 per diluted share, compared to $299.0 million, or $1.35 per diluted share.
Current wording
•Net income was $132.4 million, or $0.62 per diluted share, compared to $200.4 million, or $0.91 per diluted share.
Previous wording
At May 4, 2024, we operated stores in 48 states and the District of Columbia, as well as stores in five Canadian provinces. The average size of stores opened during the 13 weeks ended May 4, 2024 was approximately 9,300 selling square feet for the Dollar Tree segment and 8,940 selling square feet for the Family Dollar segment. A breakdown of store counts and square footage by segment for the 13 weeks ended May 4, 2024 and April 29, 2023 is as follows:
Current wording
At August 3, 2024, we operated stores in 48 states and the District of Columbia, as well as stores in five Canadian provinces. The average size of stores opened during the 26 weeks ended August 3, 2024 was approximately 9,330 selling square feet for the Dollar Tree segment and 8,840 selling square feet for the Family Dollar segment. A breakdown of store counts and square footage by segment for the 26 weeks ended August 3, 2024 and July 29, 2023 is as follows:
Previous wording
Stores are included as re-banners when they close or open, respectively. During the fourth quarter of fiscal 2023, we initiated a comprehensive store portfolio optimization review, including identifying stores as candidates for closure, re-bannering, or relocation. See the “Strategic Initiatives and Recent Developments” section below for additional detail.
Current wording
The store counts above do not include new stores until they are opened for sales. Stores are included as re-banners when they close or open, respectively. During the fourth quarter of fiscal 2023, we initiated a comprehensive store portfolio optimization review, including identifying stores as candidates for closure, re-bannering, or relocation. See the “Strategic Initiatives and Recent Developments” section below for additional detail.
Previous wording
The percentage change in comparable store net sales for the 13 weeks ended May 4, 2024, as compared with the preceding year, is as follows:
Current wording
The percentage change in comparable store net sales for the 13 and 26 weeks ended August 3, 2024, as compared with the preceding year, is as follows:
Previous wording
Dollar Tree Merchandising. We continue to expand our brand assortment at the $1.25 price point to provide greater value to our customers and increase customer traffic and store productivity. We are continuing to expand our multi-price product assortment, which began with the introduction of $3 and $5 Dollar Tree Plus product in select discretionary categories, expanded into $3, $4 and $5 frozen and refrigerated product, and now comprises a wide assortment of other consumable and discretionary product. We are currently taking actions to improve operating efficiencies and prepare for expanded multi-price products within our stores, including raising shelf heights, implementing space productivity, and rightsizing assortments. In fiscal 2024, we expect to expand our multi-price assortment in approximately 3,000 stores.
Current wording
Dollar Tree Merchandising. We continue to expand our brand assortment at the $1.25 price point to provide greater value to our customers and increase customer traffic and store productivity. We are continuing to expand our multi-price product assortment, which began with the introduction of $3 and $5 Dollar Tree Plus product in select discretionary categories, expanded into $3, $4 and $5 frozen and refrigerated product, and now comprises a wide assortment of other consumable and discretionary product at varying price points. We are currently taking actions to improve operating efficiencies and prepare for expanded multi-price products within our stores, including raising shelf heights, implementing space productivity, and rightsizing assortments. As of August 3, 2024, we have expanded our multi-price assortment in approximately 1,600 stores.
Previous wording
Family Dollar Merchandising. Our store design initiatives at Family Dollar provide significantly improved merchandise offerings and establish a minimum number of cooler doors. We tailor space and assortment to local demographics with emerging formats including H2.5, our primary store format with optimized layout and expanded frozen and refrigerated doors; larger rural stores where assortments may include Dollar Tree product; and XSB (Extra Small Box), which adds elements of H2.5 optimized to our smaller stores, particularly in urban markets. As of May 4, 2024, we have more than 2,050 stores across these three formats.
Current wording
Family Dollar Merchandising. Our store design initiatives at Family Dollar provide significantly improved merchandise offerings and establish a minimum number of cooler doors. We tailor space and assortment to local demographics with emerging formats including H2.5, our primary store format with optimized layout and expanded frozen and refrigerated doors; larger rural stores where assortments may include Dollar Tree product; and XSB (Extra Small Box), which adds elements of H2.5 optimized to our smaller stores, particularly in urban markets. As of August 3, 2024, we have more than 2,150 stores across these three formats.
Previous wording
Across all of Family Dollar’s formats we are expanding our SKUs, continuing to add cooler doors, increasing our standard shelf profile, and implementing planogram and category resets. We continue to introduce new private brands at Family Dollar, convert control brands to private brands and align our “Family” brand message across key categories.
Current wording
Across all of Family Dollar’s formats we are expanding our SKUs, continuing to add cooler doors, increasing our standard shelf height presentation, and implementing planogram and category resets. We continue to introduce new private brands at Family Dollar, convert control brands to private brands and align our “Family” brand message across key categories.
Previous wording
Store Portfolio Optimization and Family Dollar Strategic Alternatives Reviews. Additionally, during the fourth quarter of fiscal 2023, we announced that we had initiated a comprehensive store portfolio optimization review which involved identifying stores for closure, relocation or re-bannering based on an evaluation of current market conditions and individual store performance, among other factors. As a result of the portfolio optimization review, we identified approximately 970 underperforming Family Dollar stores, including approximately 600 stores to be closed in the first half of fiscal 2024, and approximately 370 stores to be closed at the end of each store's current lease term. As of May 4, 2024, we have closed approximately 550 stores identified under the portfolio optimization review and expect to close an additional 150 during the remainder of fiscal 2024.
Current wording
Store Portfolio Optimization and Family Dollar Strategic Alternatives Reviews. During the fourth quarter of fiscal 2023, we announced that we had initiated a comprehensive store portfolio optimization review which involved identifying stores for closure, relocation or re-bannering based on an evaluation of current market conditions and individual store performance, among other factors. As a result of the portfolio optimization review, we identified approximately 970 underperforming Family Dollar stores, including approximately 600 stores to be closed in the first half of fiscal 2024, and approximately 370 stores to be closed at the end of each store's current lease term. As of August 3, 2024, we have closed approximately 655 stores identified under the portfolio optimization review and expect to close an additional 45 during the remainder of fiscal 2024.
Previous wording
Subsequent to the quarter ended May 4, 2024, we announced that we had initiated a formal review of strategic alternatives for the Family Dollar business segment, which could include among others, a potential sale, spin-off or other disposition of the business. There is not a set deadline or definitive timetable for the completion of the strategic alternatives review process, and there can be no assurance that this process will result in any transaction or particular outcome.
Current wording
During the second quarter of fiscal 2024, we announced that we had initiated a formal review of strategic alternatives for the Family Dollar business segment, which could include among others, a potential sale, spin-off or other disposition of the business. There is not a set deadline or definitive timetable for the completion of the strategic alternatives review process, and there can be no assurance that this process will result in any transaction or particular outcome.
Previous wording
Technology Investment. We continue our multi-year plan for significant investment in our technology across our business, including our store network and point-of-sale, merchandising and supply chain. We believe these improvements can promote operational efficiencies and deliver an elevated customer experience.
Current wording
Technology Investment. We continue our multi-year plan for significant investment in our technology across our business, including our store systems, merchandising and supply chain. We believe these improvements can promote operational efficiencies and deliver an elevated customer experience.
Previous wording
Marietta, Oklahoma Distribution Center. On April 28, 2024, a tornado destroyed our Dollar Tree distribution center in Marietta, Oklahoma. Based on the significant damage sustained by the facility, the inventory contained in the facility and the facility itself are not salvageable. We have pivoted our supply chain network to deliver product to the approximately 600 Marietta-serviced Dollar Tree stores, and we expect that these efforts will limit disruption to the Dollar Tree shopping experience. We anticipate incurring additional costs within our supply chain as a result of servicing these impacted stores, including additional stem miles for delivered product and outside storage, and expect such costs to negatively impact gross margin in the near term.
Current wording
Marietta, Oklahoma Distribution Center. On April 28, 2024, a tornado destroyed our Dollar Tree distribution center in Marietta, Oklahoma. Based on the significant damage sustained by the facility, the inventory contained in the facility and the facility itself are not salvageable. We have pivoted our supply chain network to deliver products to the approximately 600 Marietta-serviced Dollar Tree stores, and we expect that these efforts will limit disruption to the Dollar Tree shopping experience. We are incurring additional costs within our supply chain as a result of servicing these impacted stores, including additional stem miles for delivered product and outside storage, and expect such costs to continue negatively impacting gross margin in the near term.
Previous wording
The following table contains results of operations data for the 13 weeks ended May 4, 2024 and April 29, 2023:
Current wording
The following table contains results of operations data for the 13 and 26 weeks ended August 3, 2024 and July 29, 2023:
Previous wording
The increase in net sales in the 13 weeks ended May 4, 2024 was a result of the comparable store net sales increases in the Dollar Tree and Family Dollar segments, and net sales of$457.4 million at non-comparable stores. For the 13 weeks ended May 4, 2024, net sales at non-comparable stores include sales from the Family Dollar stores that were closed under the portfolio optimization review in the first quarter of this year.
Current wording
The increase in net sales in the 26 weeks ended August 3, 2024 was a result of the comparable store net sales increase in the Dollar Tree segment, and net sales of $846.9 million at non-comparable stores. The increase was partially offset by lower sales on the Family Dollar segment resulting from approximately 655 stores closed under the portfolio optimization review since the same period last year. For the 26 weeks ended August 3, 2024, net sales at non-comparable stores included $189.9 million from the Family Dollar stores that were closed under the portfolio optimization review in the first half of this year.
Previous wording
Enterprise comparable store net sales increased 1.0% in the 13 weeks ended May 4, 2024, as a result of a 2.1% increase in customer traffic, partially offset by a 1.1% decrease in average ticket. Comparable store net sales increased 1.7% in the Dollar Tree segment and increased 0.1% in the Family Dollar segment. The low single-digit comparable store net sales increase was primarily impacted by the Easter calendar shift to earlier in the quarter this year and a softer than expected sell through. In addition, the macro environment continues to impact our customers due to the impact of inflationary pressures, higher interest rates, and reduced government benefits.
Current wording
Enterprise comparable store net sales increased 0.8% in the 26 weeks ended August 3, 2024, as a result of a 1.6% increase in customer traffic, partially offset by a 0.8% decrease in average ticket. Comparable store net sales increased 1.5% in the Dollar Tree segment and was flat in the Family Dollar segment. The low single-digit comparable store net sales increase was primarily impacted by the macro economic environment which continues to affect our customers due to the impact of inflationary pressures and higher interest rates. We expect these sales trends, and the resulting negative impact on operating income, to continue into the second half of fiscal 2024.
Previous wording
Gross profit margin increased during the 13 weeks ended May 4, 2024 due to a 30 basis point decrease in cost of sales. The cost of sales rate decreased to 69.2% during the 13 weeks ended May 4, 2024 from 69.5% during the same period last year primarily due to lower freight costs, partially offset by increased sales of higher cost consumable merchandise and increased shrink costs due to unfavorable physical inventory results.
Current wording
Gross profit margin increased during the 26 weeks ended August 3, 2024 due to a 60 basis point decrease in cost of sales. The cost of sales rate decreased to 69.6% during the 26 weeks ended August 3, 2024 from 70.2% during the same period last year primarily due to lower freight costs, partially offset by increased sales of higher cost consumable merchandise, higher distribution costs and increased shrink costs due to unfavorable physical inventory results.
Previous wording
The selling, general and administrative expense rate increased 50 basis points primarily due to temporary labor on the Dollar Tree segment to support our multi-price rollout, higher depreciation expense from store investments and loss of leverage from the low-single digit comparable store net sales increase, and severance and retention-related expenses for Family Dollar stores closed in connection with the portfolio optimization review in the first quarter of this year. The increases were partially offset by a decrease in legal costs as the prior year quarter included a $30.0 million accrual for DC 202-related legal matters on the Family Dollar segment.
Current wording
The selling, general and administrative expense rate increased 130 basis points during the 26 weeks ended August 3, 2024 primarily due to unfavorable development of general liability claims, higher depreciation expense from store investments, temporary labor on the Dollar Tree segment to support our multi-price rollout, higher utilities costs, and loss of leverage from the low single-digit comparable store net sales increase. The increases were partially offset by a decrease in legal costs as the prior year included a $30.0 million accrual for DC 202-related legal matters on the Family Dollar segment.
Previous wording
Operating income margin decreased to 5.5% for the 13 weeks ended May 4, 2024 compared to 5.7% for the same period last year, resulting from the increase in the selling, general and administrative expense rate, partially offset by the increase in gross profit margin, as described above.
Current wording
Operating income margin decreased to 2.8% for the 13 weeks ended August 3, 2024 compared to 3.9% for the same period last year, resulting from the increase in the selling, general and administrative expense rate, partially offset by the increase in gross profit margin, as described above.
Previous wording
The effective tax rate was 24.2% for the 13 weeks ended May 4, 2024 compared to 24.1% for the comparable prior year period, resulting from higher tax expense in the current year related to restricted stock vesting, partially offset by lower non-deductible expenses.
Current wording
The effective tax rate was 24.2% for the 26 weeks ended August 3, 2024 compared to 24.0% for the comparable prior year period, resulting primarily from higher tax expense in the current year related to restricted stock vesting, partially offset by lower non-deductible expenses.
Previous wording
Net sales for the Dollar Tree segment increased $233.9 million, or 5.9%, during the 13 weeks ended May 4, 2024 compared to the same period last year due to an increase in comparable store net sales of 1.7%, and net sales of$184.7 million at non-comparable stores. Customer traffic increased 2.8% and average ticket decreased 1.1%.
Current wording
Net sales for the Dollar Tree segment increased $192.1 million, or 5.0%, during the 13 weeks ended August 3, 2024 compared to the same period last year due to an increase in comparable store net sales of 1.3%, and net sales of $207.5 million at non-comparable stores. Customer traffic increased 1.4% and average ticket decreased 0.1%.
Previous wording
Operating income margin for the Dollar Tree segment decreased to 12.5% during the 13 weeks ended May 4, 2024 from 13.6% during the same period last year as a result of an increase in the selling, general and administrative expense rate, partially offset by the gross profit margin increase noted above. The selling, general and administrative expense rate increased 120 basis points primarily due to temporary labor to support our multi-price rollout, higher depreciation expense from store investments and loss of leverage from the low-single digit comparable store net sales increase.
Current wording
Operating income margin for the Dollar Tree segment decreased to 8.4% during the 13 weeks ended August 3, 2024 from 10.3% during the same period last year as a result of an increase in the selling, general and administrative expense rate, partially offset by the gross profit margin increase noted above. The selling, general and administrative expense rate increased 270 basis points primarily due to unfavorable development of general liability claims, higher depreciation expense from store investments, temporary labor to support our multi-price rollout, higher utilities costs, and loss of leverage from the low single-digit comparable store net sales increase.
Previous wording
Net sales for the Family Dollar segment increased $73.0 million, or 2.2%, during the 13 weeks ended May 4, 2024 compared to the same period last year due to an increase in comparable store net sales of 0.1%, and net sales of $272.7 million at non-comparable stores. For the 13 weeks ended May 4, 2024, net sales at non-comparable stores include sales from the stores that were closed under the portfolio optimization review in the first quarter of this year. Customer traffic increased 0.9% and average ticket decreased 0.8%.
Current wording
Net sales for the Family Dollar segment decreased $139.5 million, or 4.0%, during the 13 weeks ended August 3, 2024 compared to the same period last year resulting from approximately 655 stores closed under the portfolio optimization review since the same period last year, and a decrease in comparable store net sales of 0.1%. Net sales at non-comparable stores totaled $128.7 million and included $10.7 million of sales from the stores that were closed under the portfolio optimization review in the second quarter of this year. Customer traffic increased 0.7% and average ticket decreased 0.8%.
Previous wording
Operating income margin for the Family Dollar segment increased to 1.1% during the 13 weeks ended May 4, 2024 from 0.3% during the same period last year resulting from the increase in gross profit margin noted above and a decrease in the selling, general and administrative expense rate. The selling, general and administrative expense rate decreased 40 basis points primarily due to a decrease in legal costs as the prior year quarter included a $30.0 million accrual for DC 202-related legal matters. The decrease was partially offset by severance and retention-related expenses for stores closed in connection with the portfolio optimization review in the first quarter of this year, higher depreciation expense from store investments and loss of leverage from the low comparable store net sales increase.
Current wording
Operating income margin for the Family Dollar segment was 0.3% for the 26 weeks ended August 3, 2024 and remained unchanged compared to the same period last year as a result of an increase in the selling, general and administrative expense rate, offset by the gross profit margin increase noted above. The selling, general and administrative expense rate increased 40 basis points primarily due to higher depreciation expense from store investments, unfavorable development of general liability claims, higher professional fees related to the review of Family Dollar strategic alternatives, and loss of leverage from the flat comparable store net sales. These increases were partially offset by a decrease in legal costs as the prior year included a $30.0 million accrual for DC 202-related legal matters.
Previous wording
The following table compares cash flow-related information for the 13 weeks ended May 4, 2024 and April 29, 2023:
Current wording
The following table compares cash flow-related information for the 26 weeks ended August 3, 2024 and July 29, 2023:
Previous wording
Net cash provided by operating activities decreased $56.3 million primarily due to inventory levels decreasing at a lower rate compared to the prior year and decreases in other current liabilities, partially offset by increases in accounts payable.
Current wording
Net cash provided by operating activities increased $78.8 million primarily due to higher current year earnings, excluding non-cash items. In addition, an increase in accounts payable was partially offset by inventory levels decreasing at a lower rate compared to the prior year and other changes in operating assets and liabilities.
Previous wording
Net cash used in investing activities increased $120.3 million due to higher capital expenditures in the current year.
Current wording
Net cash used in investing activities increased $169.0 million primarily due to higher capital expenditures.
Previous wording
Net cash used in financing activities increased $120.2 million primarily due to higher payments for stock repurchases in the current year.
Current wording
Net cash used in financing activities decreased $107.3 million primarily due to borrowings under our commercial paper program in the current year, partially offset by an increase in stock repurchases.
Showing the first 40 of 42 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
Enterprise comparable store net sales increased 0.7% in the 13 weeks ended August 3, 2024, as a result of a 1.1% increase in customer traffic, partially offset by a 0.5% decrease in average ticket. Comparable store net sales increased 1.3% in the Dollar Tree segment and decreased 0.1% in the Family Dollar segment.
Current report — wording carried from elsewhere
Operating income margin decreased to 4.2% for the 26 weeks ended August 3, 2024 compared to 4.8% for the same period last year, resulting from the increase in the selling, general and administrative expense rate, partially offset by the increase in gross profit margin, as described above.