01—Abstract
Summary
Summary of the 10-K/A filed March 26, 2018. Cited figures are marked; the original filing is the authoritative source.
Dollar Tree, Inc. operates as a leading discount variety retailer with two primary segments: Dollar Tree, known for its fixed $1.00a price point, and Family Dollar, a neighborhood variety store with prices generally ranging from $1.00 to $10.00.
As of February 3, 2018, the company operated a substantial network of 14,835 stores across North America. The company's strategy includes growing both banners, optimizing store formats, and leveraging synergies from the significant acquisition of Family Dollar in July 2015. The fiscal year ended February 3, 2018, saw net sales increase to $22.2 billionb, driven by new store openings, comparable store sales growth, and the inclusion of a 53rd week.
The company reported a significant net income of $1.7 billionc, boosted by the Tax Cuts and Jobs Act (TCJA) which provided a substantial tax benefit. Efforts to integrate Family Dollar and achieve cost synergies are ongoing, with targets set for mid-2018. The company is also investing in store renovations and infrastructure, including new distribution centers, to support its growth strategy.
02—Key points
Key Highlights
- Operates 14,835 discount variety stores under the Dollar Tree and Family Dollar banners across North America.
- Net sales reached $22.2 billion for the fiscal year ended February 3, 2018.
- Reported net income of $1.7 billion, significantly impacted by a tax benefit from the Tax Cuts and Jobs Act.
- Achieved a gross profit margin of 31.6% and an operating income margin of 9.0%.
- Family Dollar segment is undergoing renovations to improve the shopping experience and productivity.
- The company is on track to achieve approximately $300 million in annual cost synergies from the Family Dollar acquisition by mid-2018.
- Investments in new distribution centers and store enhancements are part of the ongoing growth strategy.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2018, Dollar Tree, Inc. kept $0.08.
- Revenue$22.25B100.0%
- Cost of revenue−$15.22B68.4%
- Gross profit$7.02B31.6%
- Operating costs−$5.02B22.6%
- Operating income$2.00B9.0%
- Interest, other & tax−$284.8M1.3%
- Net income$1.71B7.7%
Where FY2018 revenue went
$22.25B- Cost of revenue: $15.22B, 68% of revenue
- SG&A: $5.00B, 22% of revenue
- Net income: $1.71B, 7.7% of revenue
- Interest, other & tax: $284.8M, 1.3% of revenue
Kept 7.7% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-K/AFY2018filed March 26, 2018Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $22.25B$20.72B | +7.4% |
| Cost of Revenue | $15.22B$14.32B | +6.3% |
| Gross Profit | $7.02B$6.39B | +9.8% |
| SG&A Expenses | $5.00B$4.69B | +6.7% |
| Operating Income | $2.00B$1.70B | +17.3% |
| Net Income | $1.71B$896.20M | +91.3% |
| EPS (Basic) | $7.24$3.80 | +90.5% |
| EPS (Diluted) | $7.21$3.78 | +90.7% |
| Shares Outstanding (Basic) | 236.80M235.70M | +0.5% |
| Shares Outstanding (Diluted) | 237.70M236.80M | +0.4% |
05—Questions
Frequently Asked Questions
What are the two main business segments of Dollar Tree, Inc.?
Dollar Tree, Inc. operates in two main segments: the Dollar Tree segment, which is a fixed-price discount variety store where all items are $1.00 or less (or $1.25 CAD in Canada), and the Family Dollar segment, which is a neighborhood discount store offering a variety of merchandise at prices generally ranging from $1.00 to $10.00.
How did the acquisition of Family Dollar impact the company's financials and operations?
The acquisition of Family Dollar, completed in July 2015, significantly expanded Dollar Tree's store count and geographic reach. It created the largest discount retailer by store count in North America. The integration of Family Dollar is ongoing, with the company working to achieve significant cost synergies and implementing store renovations to improve performance. The acquisition increased the company's total assets, liabilities, and debt substantially.
What is the company's strategy for future growth?
Dollar Tree's growth strategy focuses on opening new stores for both the Dollar Tree and Family Dollar banners, expanding its geographic footprint, and leveraging the complementary strengths of each banner. The company also aims to drive sales growth through store expansions and remodels, and by continuously offering a compelling merchandise assortment at attractive price points. Efforts to achieve cost synergies from the Family Dollar acquisition are also a key part of their strategy.
How has the Tax Cuts and Jobs Act (TCJA) affected Dollar Tree's financial results?
The Tax Cuts and Jobs Act (TCJA), enacted in December 2017, significantly lowered the U.S. federal corporate tax rate. For Dollar Tree, this resulted in a substantial one-time tax benefit, which significantly increased net income and diluted earnings per share for the fiscal year ended February 3, 2018. The company plans to reinvest a portion of these tax savings into areas like increased store hours, employee wages, and benefits.
06—Continue