DOLLAR TREE INC

Previous wording

•Our expectations regarding the implementation and impact of investments in supply chain, distribution facilities, truck fleet and transportation management systems, store delivery and equipment, store appearance, wage investments and other workforce investments and goals;

Current wording

•Our expectations regarding the implementation and impact of investments in supply chain, distribution facilities, truck fleet and transportation management systems, store delivery and equipment, the in-store experience, wage investments and other workforce investments and goals;

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 and interest rates on our sales and our operating costs and income;

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 income;

Previous 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;

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, costs and other changes within our supply chain network and our customer shopping experience;

Previous wording

•Our profitability is vulnerable to increases in merchandise, shipping, freight and fuel costs, wage and benefit and other operating costs.

Current wording

•Our profitability is vulnerable to increases in merchandise, shipping, tariffs, freight and fuel costs, wage and benefit and other operating costs.

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.

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. 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.

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 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.

Current wording

We are a leading operator of more than 16,500 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

•Net sales increased 0.7% to $7,372.7 million, primarily due to a 0.7% enterprise-wide comparable store net sales increase.

Current wording

•Net sales increased 3.5% to $7,561.7 million, primarily due to a 1.8% enterprise-wide comparable store net sales increase.

Previous 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.

Current wording

•Gross profit, as a percentage of net sales, increased 120 basis points to 30.9%, primarily due to lower freight costs and improved shrink results in relation to accruals, partially offset by increased distribution costs.

Previous 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.

Current wording

•Selling, general and administrative expenses, as a percentage of total revenues, increased 90 basis points to 26.6%, primarily due to higher depreciation expense from store investments, higher professional fees related to the review of Family Dollar strategic alternatives, 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.

Previous wording

•Operating income, as a percentage of total revenues, decreased 110 basis points to 2.8%.

Current wording

•Operating income, as a percentage of total revenues, increased 30 basis points to 4.4%.

Previous wording

•Net income was $132.4 million, or $0.62 per diluted share, compared to $200.4 million, or $0.91 per diluted share.

Current wording

•Net income was $233.3 million, or $1.08 per diluted share, compared to $212.0 million, or $0.97 per diluted share in the prior year quarter.

Previous 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:

Current wording

At November 2, 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 39 weeks ended November 2, 2024 was approximately 11,050 selling square feet for the Dollar Tree segment and 8,850 selling square feet for the Family Dollar segment. A breakdown of store counts and square footage by segment for the 39 weeks ended November 2, 2024 and October 28, 2023 is as follows:

Previous 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:

Current wording

The percentage change in comparable store net sales for the 13 and 39 weeks ended November 2, 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 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.

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. As of November 2, 2024, we have expanded our multi-price assortment in approximately 2,300 stores.

Previous wording

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 wording

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 secured the leases for 164 of these stores and substantially all have opened under our Dollar Tree segment.

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 August 3, 2024, we have more than 2,150 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 November 2, 2024, we have more than 2,180 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 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.

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, updating in-store signage, implementing planogram and category resets and updating our pricing strategy. 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. 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.

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 November 2, 2024, we have closed approximately 670 stores identified under the portfolio optimization review and expect to close an additional 25 during the remainder of fiscal 2024.

Previous 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.

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. We continue to progress in our strategic review to position Family Dollar in an optimal ownership structure. 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

Our Workforce & Our Workplace. Across both of our segments, we are investing in our talent, including initiatives to provide competitive pay and benefits, enhanced training, and attractive career opportunities to deliver an enhanced associate experience, reduce turnover, and improve our store standards and efficiencies and ultimately the customer experience. Additional initiatives include projects to optimize and modernize our stores, with a focus on improving store appearance, delivering consistent experiences across all stores, and driving positive sales trends.

Current wording

Our Workforce & Our Workplace. Across both of our segments, we are investing in our talent, including initiatives to provide competitive pay and benefits, enhanced training, and attractive career opportunities to deliver an enhanced associate experience, reduce turnover, and improve our store standards and efficiencies and ultimately the customer experience. Additional initiatives include projects to optimize and modernize our stores, with a focus on improving the in-store experience through renovations and customer service enhancements.

Previous 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.

Current wording

Technology Investment. We continue our multi-year plan for significant investment in our technology across our business, including our mobile apps, 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 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.

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-to-mid term.

Previous wording

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 wording

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 second 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.

Previous wording

Our results of operations and period-over-period changes are discussed in the following section. Note that gross profit margin is calculated as gross profit (i.e., net sales less cost of sales) divided by net sales. The cost of sales rate is calculated by dividing cost of sales by net sales. The selling, general and administrative expense rate, operating income margin and net income margin are calculated by dividing the applicable amount by total revenue. Basis points, as referred to below, are a percentage of net sales for expense categories within gross profit and cost of sales, and are a percentage of total revenue for all other expense categories. A 100 basis point increase equals 1.00% and a 1 basis point increase equals 0.01%.

Current wording

Note that the cost of sales rate is calculated by dividing cost of sales by net sales. Gross profit margin is calculated as gross profit (i.e., net sales less cost of sales) divided by net sales. The selling, general and administrative expense rate, operating income margin and net income margin are calculated by dividing the applicable amount by total revenue. Basis points, as referred to below, are a percentage of net sales for expense categories within gross profit and cost of sales, and are a percentage of total revenue for all other expense categories. A 100 basis point increase equals 1.00% and a 1 basis point increase equals 0.01%.

Previous wording

The following table contains results of operations data for the 13 and 26 weeks ended August 3, 2024 and July 29, 2023:

Current wording

The following table contains results of operations data for the 13 and 39 weeks ended November 2, 2024 and October 28, 2023:

Previous wording

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 wording

The increase in net sales in the 13 weeks ended November 2, 2024 was a result of comparable store net sales increases in the Dollar Tree and Family Dollar segments, and net sales of $401.4 million at non-comparable stores. The increase was partially offset by lower sales on the Family Dollar segment resulting from approximately 670 stores closed under the portfolio optimization review since the same period last year.

Previous 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.

Current wording

Enterprise comparable store net sales increased 1.8% in the 13 weeks ended November 2, 2024, as a result of a 1.6% increase in customer traffic and a 0.2% increase in average ticket. Comparable store net sales increased 1.8% in the Dollar Tree segment and increased 1.9% 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 for the remainder of fiscal 2024.

Previous 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.

Current wording

The increase in net sales in the 39 weeks ended November 2, 2024 was a result of comparable store net sales increases in the Dollar Tree and Family Dollar segments, and net sales of $1.3 billion at non-comparable stores. The increase was partially offset by lower sales on the Family Dollar segment resulting from approximately 670 stores closed under the portfolio optimization review since the same period last year. For the 39 weeks ended November 2, 2024, net sales at non-comparable stores included $200.0 million from the Family Dollar stores that were closed under the portfolio optimization review in the first three quarters of this year.

Previous wording

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 wording

Enterprise comparable store net sales increased 1.2% in the 39 weeks ended November 2, 2024, as a result of a 1.6% increase in customer traffic, partially offset by a 0.5% decrease in average ticket. Comparable store net sales increased 1.6% in the Dollar Tree segment and 0.6% in the Family Dollar segment.

Previous wording

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 wording

Gross profit margin increased during the 13 weeks ended November 2, 2024 due to a 120 basis point decrease in cost of sales. The cost of sales rate decreased to 69.1% during the 13 weeks ended November 2, 2024 from 70.3% during the same period last year primarily due to lower freight costs and improved shrink results in relation to accruals, partially offset by increased distribution costs.

Previous 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.

Current wording

Gross profit margin increased during the 39 weeks ended November 2, 2024 due to an 80 basis point decrease in cost of sales. The cost of sales rate decreased to 69.4% during the 39 weeks ended November 2, 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 and higher distribution costs.

Previous wording

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 wording

The selling, general and administrative expense rate increased 90 basis points during the 13 weeks ended November 2, 2024 primarily due to higher depreciation expense from store investments, higher professional fees related to the review of Family Dollar strategic alternatives, 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.

Previous 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.

Current wording

The selling, general and administrative expense rate increased 120 basis points during the 39 weeks ended November 2, 2024 primarily due to higher depreciation expense from store investments, unfavorable development of general liability claims, 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 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.

Current wording

Operating income margin increased to 4.4% for the 13 weeks ended November 2, 2024 compared to 4.1% for the same period last year, resulting from the increase in gross profit margin, partially offset by the increase in the selling, general and administrative expense rate, as described above.

Previous wording

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.

Current wording

Operating income margin decreased to 4.2% for the 39 weeks ended November 2, 2024 compared to 4.6% 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

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 wording

Interest expense, net increased $0.3 million in the 39 weeks ended November 2, 2024 compared to the same period last year, primarily due to higher interest incurred for short-term borrowings under our commercial paper program.

Previous 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.

Current wording

The effective tax rate was 24.0% for the 39 weeks ended November 2, 2024 compared to 23.4% for the comparable prior year period, resulting primarily from higher tax expense in the current year related to restricted stock vesting and lower Work Opportunity Tax Credits, partially offset by lower non-deductible expenses.

Previous wording

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 wording

Gross profit margin in the Dollar Tree segment increased to 35.4% during the 13 weeks ended November 2, 2024 from 34.8% during the same period last year due to a 60 basis point decrease in cost of sales. The cost of sales rate decreased to 64.6% during the 13 weeks ended November 2, 2024 from 65.2% during the same period last year primarily due to lower freight costs, partially offset by increased markdown costs for slow moving items, higher distribution costs, 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.

Previous wording

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 wording

Gross profit margin in the Dollar Tree segment increased to 35.0% during the 39 weeks ended November 2, 2024 from 34.5% during the same period last year due to a 50 basis point decrease in cost of sales. The cost of sales rate decreased to 65.0% during the 39 weeks ended November 2, 2024 from 65.5% 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, increased occupancy costs resulting from the loss of leverage from the low single-digit comparable store net sales increase, increased markdown costs for slow moving items, and increased shrink costs resulting from unfavorable inventory results.

Previous 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.

Current wording

Operating income margin for the Dollar Tree segment decreased to 10.7% during the 13 weeks ended November 2, 2024 from 12.1% 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 180 basis points primarily due to 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.