Dollar Tree Reports Mixed Financial Results, Decline in Operating Income and Net Income

Dollar Tree, Inc. reported its financial results for the 13 and 26 weeks ended August 3, 2024, showing mixed performance compared to the previous fiscal period. Net sales for the 13 weeks reached $7,372.7 million, a slight increase of 0.7% from $7,320.1 million in the same period last year. Total revenue for the same period was $7,378.8 million, up from $7,325.3 million. However, operating income significantly declined to $203.1 million from $287.8 million, reflecting a decrease of 29.4%. Net income also fell to $132.4 million, down from $200.4 million, resulting in a basic net income per share of $0.62, compared to $0.91 in the prior year.

For the 26 weeks ended August 3, 2024, net sales totaled $14,999.1 million, an increase from $14,639.6 million, while total revenue rose to $15,011.6 million from $14,649.1 million. Operating income for this period decreased to $623.7 million from $707.5 million, and net income was $432.5 million, down from $499.4 million, leading to a basic net income per share of $2.00, down from $2.26.

The Dollar Tree segment performed well, with net sales for the 13 weeks increasing to $4,065.5 million from $3,873.4 million, and gross profit rising to $1,391.3 million. However, the Family Dollar segment saw a decline in net sales to $3,307.2 million from $3,446.7 million, attributed to the closure of approximately 655 underperforming stores.

The company faced challenges, including losses from a tornado that damaged its Marietta, Oklahoma distribution center, resulting in $117.0 million in losses, partially offset by $70.8 million in insurance proceeds. Additionally, general liability claims expenses increased significantly, impacting profitability.

Dollar Tree has initiated a formal review of strategic alternatives for the Family Dollar segment, which may include a potential sale or spin-off. The company also continues to invest in its supply chain and store operations, with plans to close more underperforming Family Dollar stores and enhance its distribution capabilities.

As of August 3, 2024, Dollar Tree operated 16,388 stores across the U.S. and Canada, with a total asset value of $22,616.6 million, down from $23,428.0 million a year earlier. The company repurchased 3,283,837 shares at a cost of $403.6 million during the 26 weeks, with $952.4 million remaining under its $2.5 billion repurchase authorization.