DOLLAR TREE, INC.

Previous wording

•Our long-term approach to managing selling, general and administrative expenses;

Current wording

•Our management of operating expenses and long-term approach to managing selling, general and administrative expenses;

Previous wording

•Our plans to add, refresh and renovate stores, improve store standards and operations, and optimize and modernize stores and shelf space;

Current wording

•Our plans to add, refresh and renovate stores, improve store standards, operations and execution, and optimize and modernize stores and shelf space;

Previous wording

•Our customer connection and customer’s response to our product offerings, value and shopping experience;

Current wording

•Our expectations regarding traffic, and our customers’ response to our product offerings, value and shopping experience;

Previous wording

•Our expectations regarding the implementation and impact of investments in supply chain, distribution facilities, warehouse, inventory, transportation and human capital management systems, including new distribution centers, the expansion or conversion of existing distribution centers, and the capabilities of our distribution center network;

Current wording

•Our expectations regarding the implementation and impact of investments in supply chain, including new distribution centers, enhancements to distribution facilities, warehouse, inventory, and transportation management systems, and the capabilities of our distribution center network;

Previous wording

•Our expectations regarding the implementation and impact of investments in our technology infrastructure;

Current wording

•Our expectations regarding the implementation and impact of investments in our technology infrastructure, and our information security and cybersecurity plans, policies and procedures;

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 business;

Current wording

•The potential effect of general business or economic conditions on our customers and our business, including the direct and indirect effects of inflation, fuel prices, interest rates, labor shortages, consumer spending levels, and unemployment in our markets;

Previous wording

•The expected and possible outcome, costs, and impact of pending or potential litigation, arbitrations, other legal proceedings or governmental investigations, our plans regarding these matters, and the availability of indemnification or insurance with respect to such matters;

Current wording

•The expected and possible outcome, costs, and impact of pending or potential litigation, arbitrations, countervailing duties orders, other legal proceedings or governmental investigations, our plans regarding these matters, and the availability of indemnification or insurance with respect to such matters;

Previous wording

•Our capital allocation priorities, liquidity and cash needs, including our ability to fund our future capital expenditures and working capital requirements.

Current wording

•Our capital allocation priorities, liquidity, cash needs and estimated capital expenditures, our expectations regarding our capital investments and uses of cash, and our ability to fund our future capital expenditures and working capital requirements;

Previous wording

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

Current wording

•Our profitability is vulnerable to cost pressures from increases in merchandise, shipping, freight and fuel, wages, benefits and other operating costs.

Previous wording

•Risks associated with merchandise supply, including tariffs and other trade-related measures, restrictions and policies and any retaliatory counter measures, could adversely affect our financial performance.

Current wording

•Risks associated with merchandise supply could adversely affect our financial performance.

Previous wording

•Our tariff mitigation strategies could subject us to increased costs and other risks.

Current wording

•The direct and indirect impacts of tariffs and other related measures, our mitigation strategies, and our customers’ response and consumer behavior generally, could subject us to increased costs and other risks and adversely affect our financial performance.

Previous wording

•Higher costs and disruptions in our distribution network could have an adverse impact on our sales and profitability.

Current wording

•Higher costs and disruptions in our supply chain could have an adverse impact on our sales and profitability.

Previous wording

•Our profitability is affected by the mix of products we sell.

Current wording

•Our sales and profitability are affected by our product assortment and customer response to the value and mix of products we sell.

Previous wording

•Inflation, other changes in economic conditions or consumer spending habits could impact our sales or profitability.

Current wording

•Changes in economic conditions such as inflation, fuel prices, or interest rates, or consumer spending habits, could impact our sales or profitability.

Previous wording

•We may not be successful in anticipating the impacts of implementing, achieving or realizing the benefits of our strategies, initiatives and long-term goals, which may have an adverse impact on our business and financial results.

Current wording

•We may not be successful in executing important strategic initiatives, which may have an adverse impact on our business and financial results.

Previous wording

•We may not achieve the anticipated benefits of the sale of the Family Dollar business, and the transaction may expose us to new risks.

Current wording

•We may not achieve the anticipated benefits of the sale of the Family Dollar business.

Previous wording

•We have incurred and may in the future incur losses due to impairment of goodwill and other long-lived assets.

Current wording

•We could incur losses due to impairment of goodwill and other long-lived assets.

Previous wording

•We rely on computer and technology systems in our operations, and any material failure, inadequacy, interruption or security failure of those systems, including because of a cyberattack, could harm our ability to effectively operate and grow our business and could adversely affect our financial results.

Current wording

•We rely on computer and technology systems in our operations, and any material failure, inadequacy or interruption of those systems, including because of a cyberattack, could harm our ability to effectively operate and grow our business and could adversely affect our financial results.

Previous wording

•Our business is subject to evolving disclosure requirements and expectations with respect to environmental, social and governance matters that could expose us to numerous risks.

Current wording

•Our business is subject to evolving disclosure requirements and expectations with respect to social, environmental, and similar matters that could expose us to numerous risks.

Previous wording

•Gross profit increased 10.8% to $1,700.5 million primarily due to our net store growth. Gross profit, as a percentage of net sales, increased 40 basis points to 35.8%.

Current wording

•Gross profit increased 10.9% to $1,829.5 million primarily due to our net store growth, the 3.5% comparable store net sales increase, and a 120 basis point improvement in gross profit margin.

Previous wording

•Selling, general and administrative expenses, as a percentage of total revenues, increased 140 basis points to 29.2%.

Current wording

•Selling, general and administrative expenses, as a percentage of total revenue, increased 50 basis points to 27.8%.

Previous wording

•Transition services agreement income, net was $23.8 million resulting from services provided to Family Dollar following the sale.

Current wording

•Transition services agreement income, net was $21.1 million resulting from services provided to Family Dollar following the sale.

Previous wording

•Operating income, as a percentage of total revenues, decreased 40 basis points to 7.2%.

Current wording

•Operating income, as a percentage of total revenue, increased 120 basis points to 9.5%.

Previous wording

•The effective tax rate was 23.9%, an increase of 70 basis points as compared to the prior year quarter.

Current wording

•The effective tax rate was 24.9%, a decrease of 100 basis points as compared to the prior year quarter.

Previous wording

•Income from continuing operations was $244.6 million, or $1.20 per diluted share, compared to $232.3 million, or $1.08 per diluted share in the prior year quarter.

Current wording

•Income from continuing operations was $347.3 million, or $1.76 per diluted share, compared to $313.5 million, or $1.47 per diluted share, in the prior year quarter.

Previous wording

At November 1, 2025, 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 1, 2025 was approximately 9,230 selling square feet. A breakdown of the changes in store count and square footage is as follows:

Current wording

At May 2, 2026, we operated stores in 48 states and the District of Columbia, as well as stores in seven Canadian provinces. The average size of stores opened during the 13 weeks ended May 2, 2026 was approximately 9,230 selling square feet. A breakdown of the changes in store count and square footage is as follows:

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, 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 were converted from Family Dollar stores to Dollar Tree stores 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 Dollar Tree brand. Additionally, 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 at new stores and at comparable stores. We use comparable store net sales to evaluate the performance of our existing stores from one year to the next. Comparable stores 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 year in the calculation of comparable store net sales. Stores that were converted from Family Dollar stores to Dollar Tree stores 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 Dollar Tree brand. Additionally, 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. Comparable store sales measures vary across the retail industry. As a result, our comparable store net sales calculation is not necessarily comparable to similarly titled measures reported by other companies.

Previous wording

Net sales per selling square foot is calculated based on total net sales for the preceding 12 months as of the end of the reporting period divided by the average selling square footage during the period. Selling square footage excludes the storage, receiving and office space that generally occupies approximately 20% of the total square footage of our stores. We believe that net sales per selling square foot more accurately depicts the productivity and operating performance of our stores as it reflects the portion of our footprint that is dedicated to selling merchandise. Net sales per selling square foot for the 52 weeks ended November 1, 2025 and November 2, 2024 is as follows:

Current wording

Net sales per selling square foot is calculated based on total net sales for the preceding 12 months as of the end of the reporting period divided by the average selling square footage during the period. Selling square footage excludes the storage, receiving and office space that generally occupies approximately 20% of the total square footage of our stores. We believe that net sales per selling square foot more accurately depicts the productivity and operating performance of our stores as it reflects the portion of our footprint that is dedicated to selling merchandise.

Previous wording

During fiscal 2025, we have experienced increased costs associated with the tariff environment and implementation of our mitigation strategies, including discrete price-change costs. We expect our results to continue to be impacted by near-term challenges, including higher costs due to the volatility in the tariff environment, in the fourth quarter of fiscal 2025. Additionally, implementation costs associated with our mitigation strategies may continue to be experienced before the benefits from those efforts are expected to materialize. The ultimate impact of cost inflation, including tariffs and other related measures, remains uncertain and will depend on several factors, including whether additional or incremental tariffs or other measures are announced or imposed, to what extent other countries implement tariffs or other retaliatory measures in response, the overall magnitude and duration of these measures, and the costs and effectiveness of, and consumer response to, our mitigation efforts.

Current wording

The tariff environment remains fluid, and we expect our results to continue to be impacted by near-term challenges, potentially including higher costs due to increases or variability in tariffs. Further, we may continue to experience implementation costs associated with our mitigation strategies that impact us before the benefits from those efforts are expected to materialize.

Previous wording

In April 2025, we announced that we will be returning to Marietta, Oklahoma with a new, enhanced distribution center that is expected to be fully operational by spring 2027 with the capacity to serve 700 stores across the West and Southwest regions of the country. We broke ground on the new Marietta distribution center in September 2025. In October 2025, we announced that we purchased a 1.25 million square foot distribution center outside of Phoenix, Arizona, which we expect to open in spring 2026. This new distribution center will strengthen our supply chain in the Southwest, servicing stores in Arizona, Colorado, Nevada, New Mexico and Utah.

Current wording

In April 2025, we announced plans to return to Marietta, Oklahoma, with a new, enhanced distribution center expected to be fully operational by spring 2027, with capacity to serve approximately 700 stores across the West and Southwest regions. Reconstruction of the Marietta, Oklahoma distribution center commenced in September 2025.

Previous wording

Family Dollar Strategic Alternatives Review. On March 25, 2025, we entered into a definitive agreement to sell the Family Dollar business to 1959 Holdings, LLC, and on July 5, 2025, we completed the sale for a purchase consideration of $1,007.5 million, subject to certain adjustments, including with respect to working capital and net indebtedness. Net proceeds from the sale consisted of $665 million paid at closing and $22 million to be received post-closing, subject to final adjustment under the terms of the purchase agreement. In addition, the Company monetized approximately $113 million of cash from Family Dollar prior to the closing date primarily through a reduction of net working capital. Together, the total cash monetized from the sale of the Family Dollar business approximates $800 million. As of November 1, 2025, the remaining receivable for estimated net proceeds to be received totaled $14.7 million. 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 information on discontinued operations, refer to Note 10 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

Sale and Separation of Family Dollar. 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 information on discontinued operations, refer to Note 10 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

The following table contains results of operations data for the 13 and 39 weeks ended November 1, 2025 and November 2, 2024:

Current wording

The following table contains results of operations data for the 13 weeks ended May 2, 2026 and May 3, 2025:

Previous wording

The increase in net sales in the 13 weeks ended November 1, 2025 was a result of the comparable store net sales increase and net sales of $351.7 million at non-comparable stores. Comparable store net sales increased 4.2% in the 13 weeks ended November 1, 2025, as a result of a 4.5% increase in average ticket, partially offset by a 0.3% decrease in customer traffic.

Current wording

The increase in net sales in the 13 weeks ended May 2, 2026 was primarily the result of the comparable store net sales increase and net sales of $259.0 million at non-comparable stores. Comparable store net sales increased 3.5% in the 13 weeks ended May 2, 2026, as a result of a 4.5% increase in average ticket, partially offset by a 1.0% decrease in customer traffic. The increase in average ticket was as a result of targeted retail price changes executed during the second and third quarters of fiscal year 2025 and higher mix of multi-price penetration.

Previous wording

Gross profit margin increased during the 13 weeks ended November 1, 2025 due to a 40 basis point decrease in cost of sales. The cost of sales rate decreased to 64.2% during the 13 weeks ended November 1, 2025 from 64.6% during the same period last year primarily due to improved mark-on from pricing initiatives, lower domestic and import freight costs, and favorable sales mix resulting from increased sales of higher margin discretionary merchandise as a percentage of net sales, partially offset by higher tariff costs, higher markdowns, and higher shrink costs resulting from unfavorable inventory results.

Current wording

Gross profit margin increased during the 13 weeks ended May 2, 2026 due to a 120 basis point decrease in cost of sales. The cost of sales rate decreased to 63.2% during the 13 weeks ended May 2, 2026 from 64.4% during the same period last year primarily due to improved mark-on from pricing initiatives executed during the second and third quarters of fiscal year 2025, lower import freight costs, and lower shrink from favorable inventory count results, partially offset by higher tariff costs and higher markdowns.

Previous wording

The selling, general and administrative expense rate increased 140 basis points during the 13 weeks ended November 1, 2025 primarily due to higher store payroll in support of our pricing initiatives and from wage increases, higher general liability claims costs, and higher depreciation expense from store investments, partially offset by lower stock compensation, lower corporate payroll, and leverage from the comparable store net sales increase.

Current wording

The selling, general and administrative expense rate increased 50 basis points during the 13 weeks ended May 2, 2026 primarily due to increased investments in marketing, higher general liability claims costs, and higher depreciation expense from store investments, partially offset by lower payroll expenses. Payroll expenses decreased primarily due to lower temporary labor used to support our multi-price rollout, lower corporate payroll and incentive compensation, partially offset by higher store payroll from wage increases. Selling, general and administrative expenses include costs to support the transition services agreement with Family Dollar.

Previous wording

Operating income margin decreased to 7.2% for the 13 weeks ended November 1, 2025 compared to 7.6% 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, and income from the transition services agreement with Family Dollar.

Current wording

Operating income margin increased to 9.5% for the 13 weeks ended May 2, 2026 compared to 8.3% for the same period last year, resulting from the increase in gross profit margin as described above, and income from the transition services agreement with Family Dollar, partially offset by the increase in the selling, general and administrative expense rate.

Previous wording

Interest expense, net decreased $6.4 million in the 13 weeks ended November 1, 2025 compared to the same period last year, primarily due to the repayment of our $1.0 billion principal amount of 4.00% Senior Notes in the second quarter of fiscal 2025, and higher interest income on investments, partially offset by higher borrowings of commercial paper.

Current wording

Interest expense, net decreased $6.4 million in the 13 weeks ended May 2, 2026 compared to the same period last year, primarily due to the repayment of our $1.0 billion principal amount of 4.00% Senior Notes in the second quarter of fiscal 2025, partially offset by lower interest income on investments, and interest on our new $500 million Term Loan.

Previous wording

Other income, net was $62.0 million in the 39 weeks ended November 1, 2025 compared to expense of $0.2 million in the same period last year, primarily due to an insurance gain of approximately $62.0 million recognized in the first quarter of fiscal 2025 for the excess of the insurance proceeds received over the losses incurred for damaged property and equipment and damaged inventory associated with the tornado that destroyed our Marietta, Oklahoma Dollar Tree distribution center.

Current wording

Other income, net decreased $56.3 million in the 13 weeks ended May 2, 2026 compared to the same period last year, primarily due to a higher insurance gain recognized in the prior year for the excess of the insurance proceeds received over the losses incurred for damaged property and equipment and damaged inventory associated with the tornado that destroyed our Marietta, Oklahoma Dollar Tree distribution center. The insurance gain recognized in the first quarter of fiscal 2026 totaled $5.2 million compared to $62.0 million in fiscal 2025.

Previous wording

The effective tax rate increased to 25.1% for the 39 weeks ended November 1, 2025 compared to 23.8% for the comparable prior year period, primarily due to an increase in expected state taxes and reduced benefits from the vesting of share-based payment awards, partially offset by a decrease in non-deductible compensation.

Current wording

The effective tax rate decreased to 24.9% for the 13 weeks ended May 2, 2026 compared to 25.9% for the comparable prior year period, primarily due to increased benefits from the vesting of share-based payment awards, partially offset by an increase in expected state taxes and lower Work Opportunity Tax credits.

Previous wording

The following table compares our cash flows for the 39 weeks ended November 1, 2025 and November 2, 2024:

Current wording

The following table compares our cash flows for the 13 weeks ended May 2, 2026 and May 3, 2025: