Virginia
|
26-2018846
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
500 Volvo Parkway, Chesapeake, Virginia
|
23320
|
(Address of principal executive offices)
|
(Zip Code)
|
Securities registered pursuant to Section 12(b) of the Act:
|
|
Title of each class
|
Name of each exchange on which registered
|
Common Stock, par value $.01 per share
|
NASDAQ
|
Yes
ý
|
No
¨
|
Yes
¨
|
No
ý
|
Yes
ý
|
No
¨
|
Yes
ý
|
No
¨
|
¨
|
Large accelerated filer
ý
|
Accelerated filer
¨
|
Non-accelerated filer
¨
|
Smaller reporting company
¨
|
|
Emerging growth company
¨
|
¨
|
Yes
¨
|
No
ý
|
|
|
Page
|
|
PART I
|
|
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
PART II
|
|
|
|
|
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
|
|
|
|
PART III
|
|
|
|
|
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
|
|
|
|
PART IV
|
|
|
|
|
Item 15.
|
||
Item 16.
|
||
|
•
|
the potential effect of inflation and other general business or economic conditions on our costs and profitability, including the potential effect of future changes in prevailing wage rates and overtime regulations and our plans to address these changes, shipping rates, domestic and import freight costs (including the effects of potential disruptions and increases in domestic freight costs due to the shortage in truck drivers), fuel costs and wage and benefit costs, consumer spending levels, and population, employment and job growth and/or losses in our markets;
|
•
|
the ability to retain key personnel at Family Dollar and Dollar Tree, including in connection with the consolidation of the Family Dollar headquarters from North Carolina to Virginia;
|
•
|
our anticipated sales, comparable store net sales, net sales growth, gross profit margin, earnings and earnings growth, inventory levels and our ability to leverage selling, general and administrative and other fixed costs;
|
•
|
the outcome and costs of pending or potential litigation or governmental investigations;
|
•
|
our growth plans, including our plans to add, renovate, re-banner, expand, relocate or close stores and any related costs or charges, our anticipated square footage increase, and our ability to renew leases at existing store locations;
|
•
|
the effect of changes in trade and labor laws, including the actual and potential effect of Section 301 tariffs on Chinese goods imposed by the United States Trade Representative, the potential effect of anti-dumping duties imposed by the United States Department of Commerce, and the effect of the Fair Labor Standards Act as it relates to the qualification of our managers for exempt status, minimum wage and health care law;
|
•
|
the average size of our stores to be added in 2019 and beyond;
|
•
|
the effect of our consumable merchandise initiatives, including the increase in the number of our stores with freezers and coolers and the roll-outs of adult beverage and Snack Zone, on our results of operations;
|
•
|
the effect of the Family Dollar store support center consolidation, renovation initiative, store closings and other initiatives on Family Dollar’s sales and costs;
|
•
|
the net sales per square foot, net sales and operating income of our stores;
|
•
|
the benefits, results and effects of the Family Dollar acquisition and integration and the combined Company’s plans, objectives, expectations (financial or otherwise), including synergies, the cost to achieve synergies, the costs and length of time to complete the store support center consolidation and the effect on earnings per share;
|
•
|
the effect of changes in tax laws and regulatory interpretations of such laws;
|
•
|
our seasonal sales patterns including those relating to the length of the holiday selling seasons;
|
•
|
the capabilities of our inventory supply chain technology and other systems;
|
•
|
the reliability of, and cost associated with, our sources of supply, particularly imported goods such as those sourced from China;
|
•
|
the capacity, performance and cost of our distribution centers, including future automation;
|
•
|
our cash needs, including our ability to fund our future capital expenditures and working capital requirements and our ability to service our debt obligations, including our expected annual interest expense;
|
•
|
our expectations regarding competition and growth in our retail sector;
|
•
|
our assessment of the materiality and impact on our business of recent accounting pronouncements adopted by the Financial Accounting Standards Board;
|
•
|
our assessment of the impact on the Company of certain actions by activist shareholders and the Company’s potential responses to these actions; and
|
•
|
management’s estimates associated with our critical accounting policies, including inventory valuation, accrued expenses and valuations for impairment analyses.
|
•
|
variety merchandise, which includes toys, durable housewares, gifts, stationery, party goods, greeting cards, softlines, and other items; and
|
•
|
growing both the Dollar Tree and Family Dollar brands;
|
•
|
maintaining customer relevance by ensuring that we reinvent ourselves constantly through new merchandise categories and initiatives;
|
•
|
leveraging the complementary merchandise expertise of each segment including Dollar Tree’s sourcing and product development expertise and Family Dollar’s consumer package goods and national brands sourcing expertise; and
|
•
|
Savings from sourcing and procurement of merchandise and non-merchandise goods and services driven by leveraging the combined volume of the Dollar Tree and Family Dollar segments, among other things;
|
•
|
Re-bannering to optimize store formats;
|
•
|
A reduction in overhead and corporate selling, general and administrative expenses by eliminating redundant positions, optimizing processes, integrating our technology resources and consolidating our store support centers; and
|
•
|
Savings resulting from the optimization of distribution and logistics networks.
|
•
|
Shipping costs.
We could experience increases in shipping rates imposed by the trans-Pacific ocean carriers. Changes in import duties, import quotas and other trade sanctions could increase our costs.
|
•
|
Trucking costs.
We have experienced significant increases in trucking cost due to the truck driver shortage and other factors.
|
United States
|
|
Dollar Tree
|
|
Family Dollar
|
|
Total
|
|||
Alabama
|
|
132
|
|
|
160
|
|
|
292
|
|
Arizona
|
|
130
|
|
|
166
|
|
|
296
|
|
Arkansas
|
|
81
|
|
|
110
|
|
|
191
|
|
California
|
|
588
|
|
|
137
|
|
|
725
|
|
Colorado
|
|
100
|
|
|
129
|
|
|
229
|
|
Connecticut
|
|
63
|
|
|
56
|
|
|
119
|
|
Delaware
|
|
32
|
|
|
31
|
|
|
63
|
|
District of Columbia
|
|
3
|
|
|
3
|
|
|
6
|
|
Florida
|
|
509
|
|
|
598
|
|
|
1,107
|
|
Georgia
|
|
260
|
|
|
405
|
|
|
665
|
|
Idaho
|
|
38
|
|
|
51
|
|
|
89
|
|
Illinois
|
|
271
|
|
|
225
|
|
|
496
|
|
Indiana
|
|
144
|
|
|
209
|
|
|
353
|
|
Iowa
|
|
64
|
|
|
32
|
|
|
96
|
|
Kansas
|
|
60
|
|
|
50
|
|
|
110
|
|
Kentucky
|
|
108
|
|
|
217
|
|
|
325
|
|
Louisiana
|
|
117
|
|
|
328
|
|
|
445
|
|
Maine
|
|
39
|
|
|
62
|
|
|
101
|
|
Maryland
|
|
122
|
|
|
102
|
|
|
224
|
|
Massachusetts
|
|
132
|
|
|
97
|
|
|
229
|
|
Michigan
|
|
241
|
|
|
387
|
|
|
628
|
|
Minnesota
|
|
119
|
|
|
70
|
|
|
189
|
|
Mississippi
|
|
78
|
|
|
155
|
|
|
233
|
|
Missouri
|
|
156
|
|
|
117
|
|
|
273
|
|
Montana
|
|
15
|
|
|
15
|
|
|
30
|
|
Nebraska
|
|
29
|
|
|
36
|
|
|
65
|
|
Nevada
|
|
54
|
|
|
56
|
|
|
110
|
|
New Hampshire
|
|
39
|
|
|
29
|
|
|
68
|
|
New Jersey
|
|
174
|
|
|
108
|
|
|
282
|
|
New Mexico
|
|
49
|
|
|
134
|
|
|
183
|
|
New York
|
|
327
|
|
|
314
|
|
|
641
|
|
North Carolina
|
|
263
|
|
|
458
|
|
|
721
|
|
North Dakota
|
|
12
|
|
|
23
|
|
|
35
|
|
Ohio
|
|
281
|
|
|
476
|
|
|
757
|
|
Oklahoma
|
|
83
|
|
|
138
|
|
|
221
|
|
Oregon
|
|
95
|
|
|
—
|
|
|
95
|
|
Pennsylvania
|
|
307
|
|
|
315
|
|
|
622
|
|
Rhode Island
|
|
31
|
|
|
29
|
|
|
60
|
|
South Carolina
|
|
129
|
|
|
245
|
|
|
374
|
|
South Dakota
|
|
13
|
|
|
30
|
|
|
43
|
|
Tennessee
|
|
182
|
|
|
221
|
|
|
403
|
|
Texas
|
|
527
|
|
|
1,095
|
|
|
1,622
|
|
Utah
|
|
63
|
|
|
59
|
|
|
122
|
|
Vermont
|
|
11
|
|
|
14
|
|
|
25
|
|
Virginia
|
|
186
|
|
|
242
|
|
|
428
|
|
Washington
|
|
127
|
|
|
—
|
|
|
127
|
|
West Virginia
|
|
51
|
|
|
130
|
|
|
181
|
|
Wisconsin
|
|
129
|
|
|
141
|
|
|
270
|
|
Wyoming
|
|
12
|
|
|
31
|
|
|
43
|
|
Total
|
|
6,776
|
|
|
8,236
|
|
|
15,012
|
|
Canada
|
|
Dollar Tree
|
|
Alberta
|
|
37
|
|
British Columbia
|
|
49
|
|
Manitoba
|
|
13
|
|
Ontario
|
|
110
|
|
Saskatchewan
|
|
16
|
|
Total
|
|
225
|
|
•
|
employment-related matters;
|
•
|
infringement of intellectual property rights;
|
•
|
personal injury/wrongful death claims;
|
•
|
product safety matters, which may include product recalls in cooperation with the Consumer Products Safety Commission or other jurisdictions;
|
•
|
real estate matters related to store leases; and
|
•
|
environmental and safety issues.
|
|
Year Ended
|
||||||||||||||||||
|
February 2,
2019 |
|
February 3,
2018 |
|
January 28,
2017 |
|
January 30,
2016 |
|
January 31,
2015 |
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
22,823.3
|
|
|
$
|
22,245.5
|
|
|
$
|
20,719.2
|
|
|
$
|
15,498.4
|
|
|
$
|
8,602.2
|
|
Gross profit
|
6,947.5
|
|
|
7,021.9
|
|
|
6,394.7
|
|
|
4,656.7
|
|
|
3,034.0
|
|
|||||
Selling, general and administrative expenses
|
7,887.0
|
|
|
5,022.8
|
|
|
4,689.9
|
|
|
3,607.0
|
|
|
1,993.8
|
|
|||||
Operating income (loss)
|
(939.5
|
)
|
|
1,999.1
|
|
|
1,704.8
|
|
|
1,049.7
|
|
|
1,040.2
|
|
|||||
Net income (loss)
|
(1,590.8
|
)
|
|
1,714.3
|
|
|
896.2
|
|
|
282.4
|
|
|
599.2
|
|
|||||
Margin Data (as a percentage of net sales):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
30.4
|
%
|
|
31.6
|
%
|
|
30.8
|
%
|
|
30.1
|
%
|
|
35.3
|
%
|
|||||
Selling, general and administrative expenses
|
34.5
|
%
|
|
22.6
|
%
|
|
22.6
|
%
|
|
23.3
|
%
|
|
23.2
|
%
|
|||||
Operating income (loss)
|
(4.1
|
)%
|
|
9.0
|
%
|
|
8.2
|
%
|
|
6.8
|
%
|
|
12.1
|
%
|
|||||
Net income (loss)
|
(7.0
|
)%
|
|
7.7
|
%
|
|
4.3
|
%
|
|
1.8
|
%
|
|
7.0
|
%
|
|||||
Per Share Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Diluted net income (loss) per share
|
$
|
(6.66
|
)
|
|
$
|
7.21
|
|
|
$
|
3.78
|
|
|
$
|
1.26
|
|
|
$
|
2.90
|
|
Diluted net income (loss) per share increase
(decrease)
|
(192.4
|
)%
|
|
90.7
|
%
|
|
200.0
|
%
|
|
(56.6
|
)%
|
|
6.6
|
%
|
|
As of
|
||||||||||||||||||
|
February 2,
2019 |
|
February 3,
2018 |
|
January 28,
2017 |
|
January 30,
2016 |
|
January 31,
2015 |
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents and short-term investments
|
$
|
422.1
|
|
|
$
|
1,097.8
|
|
|
$
|
870.4
|
|
|
$
|
740.1
|
|
|
$
|
864.1
|
|
Working capital
|
2,197.6
|
|
|
1,717.2
|
|
|
1,832.1
|
|
|
1,840.5
|
|
|
1,133.0
|
|
|||||
Total assets
|
13,501.2
|
|
|
16,332.8
|
|
|
15,701.6
|
|
|
15,901.2
|
|
|
3,492.7
|
|
|||||
Total debt, including capital lease obligations
|
4,300.0
|
|
|
5,732.7
|
|
|
6,391.8
|
|
|
7,465.5
|
|
|
757.0
|
|
|||||
Shareholders’ equity
|
5,642.9
|
|
|
7,182.3
|
|
|
5,389.5
|
|
|
4,406.9
|
|
|
1,785.0
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Year Ended
|
||||||||||||||||||
|
February 2,
2019 |
|
February 3,
2018 |
|
January 28,
2017 |
|
January 30,
2016 |
|
January 31,
2015 |
||||||||||
Selected Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Number of stores open at end of period
|
15,237
|
|
|
14,835
|
|
|
14,334
|
|
|
13,851
|
|
|
5,367
|
|
|||||
Dollar Tree
|
7,001
|
|
|
6,650
|
|
|
6,360
|
|
|
5,954
|
|
|
5,367
|
|
|||||
Family Dollar
|
8,236
|
|
|
8,185
|
|
|
7,974
|
|
|
7,897
|
|
|
—
|
|
|||||
Gross square footage at end of period
|
148.3
|
|
|
143.9
|
|
|
138.8
|
|
|
132.1
|
|
|
58.3
|
|
|||||
Dollar Tree
|
75.4
|
|
|
71.6
|
|
|
68.5
|
|
|
64.2
|
|
|
58.3
|
|
|||||
Family Dollar
|
72.9
|
|
|
72.3
|
|
|
70.3
|
|
|
67.9
|
|
|
—
|
|
|||||
Selling square footage at end of period
|
120.1
|
|
|
116.6
|
|
|
112.4
|
|
|
108.4
|
|
|
46.5
|
|
|||||
Dollar Tree
|
60.3
|
|
|
57.3
|
|
|
54.7
|
|
|
51.3
|
|
|
46.5
|
|
|||||
Family Dollar
|
59.8
|
|
|
59.3
|
|
|
57.7
|
|
|
57.1
|
|
|
—
|
|
|||||
Selling square footage annual growth
(2)
|
3.0
|
%
|
|
3.7
|
%
|
|
3.7
|
%
|
|
10.3
|
%
|
|
7.4
|
%
|
|||||
Net sales annual growth
(1)
|
2.6
|
%
|
|
7.4
|
%
|
|
8.6
|
%
|
|
8.5
|
%
|
|
9.7
|
%
|
|||||
Comparable store net sales increase
(1)
|
1.7
|
%
|
|
1.9
|
%
|
|
1.8
|
%
|
|
2.1
|
%
|
|
4.3
|
%
|
|||||
Net sales per selling square foot
(2)
|
$
|
193
|
|
|
$
|
194
|
|
|
$
|
188
|
|
|
$
|
191
|
|
|
$
|
192
|
|
Net sales per store
(2)
|
$
|
1.5
|
|
|
$
|
1.5
|
|
|
$
|
1.5
|
|
|
$
|
1.6
|
|
|
$
|
1.7
|
|
Selected Financial Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Return on assets
(2)
|
(10.7
|
)%
|
|
10.7
|
%
|
|
5.7
|
%
|
|
11.4
|
%
|
|
19.1
|
%
|
|||||
Return on equity
(2)
|
(24.8
|
)%
|
|
27.3
|
%
|
|
18.3
|
%
|
|
31.5
|
%
|
|
40.5
|
%
|
|||||
Inventory turns
(2)
|
4.1
|
|
|
4.4
|
|
|
4.1
|
|
|
4.5
|
|
|
4.4
|
|
•
|
what factors affect our business;
|
•
|
what our net sales, earnings or losses, gross margins and costs were in
2018
,
2017
and
2016
;
|
•
|
why those net sales, earnings or losses, gross margins and costs were different from the year before;
|
•
|
how all of this affects our overall financial condition;
|
•
|
what our expenditures for capital projects were in
2018
and
2017
and what we expect them to be in
2019
; and
|
•
|
where funds will come from to pay for future expenditures.
|
•
|
Integration of Family Dollar
|
◦
|
In the third quarter of 2018, we announced that we plan to consolidate our store support centers in Matthews, North Carolina and Chesapeake, Virginia to our newly-completed office tower in the Summit Pointe development in Chesapeake, Virginia.
|
◦
|
Based on our strategic and operational reassessment of the Family Dollar segment, following challenges that the business has experienced that have impacted our ability to grow the business at the originally estimated rate when we acquired Family Dollar in 2015, management determined there were indicators that the goodwill of the business may be impaired. Accordingly, a goodwill impairment test was performed in the fourth quarter of fiscal 2018. The results of the impairment test showed that the fair value of the Family Dollar business was lower than the carrying value resulting in a $2.73 billion non-cash pre-tax and after-tax goodwill impairment charge.
|
◦
|
On March 6, 2019, we announced plans for a store optimization program for Family Dollar. For fiscal 2019, this program includes rolling out a new model for both new and renovated Family Dollar stores, internally known as H2, to at least 1,000 stores, closing as many as 390 under-performing stores, re-bannering 200 Family Dollar stores to the Dollar Tree brand, installing adult beverages in approximately 1,000 stores and expanding freezers and coolers in approximately 400 stores.
|
•
|
Supply Chain
|
◦
|
In the second quarter of 2016, we completed construction of a new 1.5 million square foot distribution center in Cherokee County, South Carolina.
|
◦
|
In the third quarter of 2016, we completed a 0.3 million square foot expansion of our distribution center in Stockton, California.
|
◦
|
In the second quarter of 2018, we completed construction of a new 1.2 million square foot distribution center in Warrensburg, Missouri.
|
◦
|
During fiscal 2018, we began construction of a new 1.2 million square foot distribution center in Morrow County, Ohio which is expected to be operational in the third quarter of 2019.
|
◦
|
In fiscal 2019, we announced tentative plans to construct a new 1.2 million square foot distribution center in Rosenberg, Texas which is expected to be operational in the summer of 2020.
|
•
|
Long-term Debt
|
◦
|
During the first quarter of 2018, we redeemed the $750.0 million 5.25% Acquisition Notes due 2020 and accelerated the amortization of debt-issuance costs associated with the notes of $6.1 million.
|
◦
|
During the first quarter of 2018, we refinanced our long-term debt obligations as follows:
|
▪
|
We completed the registered offering of $750.0 million of Senior Floating Rate Notes due 2020, $1.0 billion of 3.70% Senior Notes due 2023, $1.0 billion of 4.00% Senior Notes due 2025 and $1.25 billion of 4.20% Senior Notes due 2028;
|
▪
|
We entered into a credit agreement for a $782.0 million term loan facility and a $1.25 billion revolving credit facility;
|
▪
|
We used the proceeds of the above offerings to repay the $2,182.7 million outstanding under our senior secured credit facilities and redeem the remaining $2,500.0 million outstanding under our acquisition debt, resulting in the acceleration of the expensing of $41.2 million of deferred financing costs and the incurrence of $114.3 million in prepayment penalties.
|
◦
|
During the fourth quarter of 2018, we prepaid the $782.0 million outstanding under the term loan facility and accelerated the expensing of $1.5 million of deferred financing costs.
|
•
|
Taxes
- On December 22, 2017, the Tax Cuts and Jobs Act (“TCJA”) was signed into law which lowered the statutory U.S. federal income tax rate from 35% to 21% and made numerous other law changes, effective as of January 1, 2018.
|
|
Year Ended
|
||||||||||||||||
|
February 2, 2019
|
|
February 3, 2018
|
||||||||||||||
|
Dollar Tree
|
|
Family Dollar
|
|
Total
|
|
Dollar Tree
|
|
Family Dollar
|
|
Total
|
||||||
Store Count:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Beginning
|
6,650
|
|
|
8,185
|
|
|
14,835
|
|
|
6,360
|
|
|
7,974
|
|
|
14,334
|
|
New stores
|
320
|
|
|
226
|
|
|
546
|
|
|
315
|
|
|
288
|
|
|
603
|
|
Re-bannered stores
|
52
|
|
|
(53
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
Closings
|
(21
|
)
|
|
(122
|
)
|
|
(143
|
)
|
|
(25
|
)
|
|
(77
|
)
|
|
(102
|
)
|
Ending
|
7,001
|
|
|
8,236
|
|
|
15,237
|
|
|
6,650
|
|
|
8,185
|
|
|
14,835
|
|
Relocations
|
54
|
|
|
13
|
|
|
67
|
|
|
82
|
|
|
31
|
|
|
113
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Selling Square Feet (in millions):
|
|
|
|
|
|
|
|
|
|
|
|||||||
Beginning
|
57.3
|
|
|
59.3
|
|
|
116.6
|
|
|
54.7
|
|
|
57.7
|
|
|
112.4
|
|
New stores
|
2.7
|
|
|
1.7
|
|
|
4.4
|
|
|
2.6
|
|
|
2.1
|
|
|
4.7
|
|
Re-bannered stores
|
0.4
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Closings
|
(0.2
|
)
|
|
(0.8
|
)
|
|
(1.0
|
)
|
|
(0.2
|
)
|
|
(0.5
|
)
|
|
(0.7
|
)
|
Relocations
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
Ending
|
60.3
|
|
|
59.8
|
|
|
120.1
|
|
|
57.3
|
|
|
59.3
|
|
|
116.6
|
|
•
|
A roll-out of a new model for both new and renovated Family Dollar stores internally known as H2. We tested the H2 model in 2018 on a limited basis with positive results. This H2 model has significantly improved merchandise offerings, including Dollar Tree $1.00 merchandise sections and establishing a minimum number of freezer and cooler doors, throughout the store. H2 has increased traffic and provided an average comparable store net sales lift in excess of 10% over control stores. H2 performs well in a variety of locations, and especially in locations where Family Dollar has been most challenged in the past. We started 2019 with approximately 200 H2 stores and plan to renovate at least 1,000 stores to this model in 2019 and expect an accelerated renovation schedule in future years.
|
•
|
We plan to close under-performing stores. In the fourth quarter of 2018, we closed 84 under-performing stores which brought our total closed stores for the year to 37 more than originally planned. In 2019 we will accelerate the pace of closings to as many as 390 stores. The normal cadence of Family Dollar closings on an annual basis is approximately 75 stores. We expect to incur approximately $28.0 million in store closure costs, which does not include the cost of rent and other lease obligation and fixture costs.
|
•
|
We plan to re-banner approximately 200 Family Dollar stores to the Dollar Tree brand in 2019. We re-bannered 52 stores to the Dollar Tree brand in 2018 and have re-bannered approximately 350 stores since the acquisition of Family Dollar in 2015.
|
•
|
Additionally, we plan to install adult beverage product in approximately 1,000 stores and expand freezers and coolers in approximately 400 stores in 2019.
|
•
|
We have experienced disruptions and higher than anticipated freight costs primarily due to the truck driver shortage in the United States. We expect that this will result in higher costs in future periods as merchandise is sold and could result in lower sales if product is not received in our stores on a timely basis.
|
•
|
The United States Trade Representative (USTR) has implemented Section 301 tariffs against $250 billion in Chinese goods. Although the tariff rate on $200 billion of those goods was originally expected to rise from 10 percent to 25 percent on March 2, 2019, President Trump announced on February 24, 2019 that he would be postponing the increase. The duration of the postponement is unknown, and the final tariffs are subject to the outcome of trade discussions between the United States and China. However, we do not expect that the tariffs will be material to our business or results of operations in 2019. When the tariffs were implemented, approximately nine percent of our products, measured by sales volume, would have been affected. To mitigate the potential adverse effect of the tariffs, we negotiated price concessions from vendors on certain products, canceled orders, changed product sizes and specifications, changed our product mix and changed vendors. As a result of our mitigation efforts, we believe that we have reduced most of the potential adverse effects of the tariffs on the Dollar Tree and Family Dollar segments in 2019. However, we can give no assurances as to the final scope, duration, or impact of any existing or future tariffs and such tariffs could have a material adverse effect on our business and results of operations if we do not continue to mitigate their impact.
|
|
|
Year Ended
|
|||||||
|
|
February 2,
2019 |
|
February 3,
2018 |
|
January 28,
2017 |
|||
Net sales
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
|
69.6
|
%
|
|
68.4
|
%
|
|
69.2
|
%
|
Gross profit
|
|
30.4
|
%
|
|
31.6
|
%
|
|
30.8
|
%
|
Selling, general and administrative expenses, excluding Goodwill
impairment and Receivable impairment
|
|
22.6
|
%
|
|
22.5
|
%
|
|
22.6
|
%
|
Goodwill impairment
|
|
11.9
|
%
|
|
—
|
%
|
|
—
|
%
|
Receivable impairment
|
|
—
|
%
|
|
0.1
|
%
|
|
—
|
%
|
Selling, general and administrative expenses
|
|
34.5
|
%
|
|
22.6
|
%
|
|
22.6
|
%
|
Operating income (loss)
|
|
(4.1
|
)%
|
|
9.0
|
%
|
|
8.2
|
%
|
Interest expense, net
|
|
1.6
|
%
|
|
1.3
|
%
|
|
1.8
|
%
|
Other income, net
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Income (loss) before income taxes
|
|
(5.7
|
)%
|
|
7.7
|
%
|
|
6.4
|
%
|
Provision for income taxes
|
|
1.3
|
%
|
|
—
|
%
|
|
2.1
|
%
|
Net income (loss)
|
|
(7.0
|
)%
|
|
7.7
|
%
|
|
4.3
|
%
|
•
|
Markdown expense increased approximately 30 basis points resulting primarily from expense related to sku rationalization and planned liquidations and higher promotional markdowns in the Family Dollar segment.
|
•
|
Merchandise cost, including freight, increased approximately 25 basis points resulting from higher domestic freight costs, partially offset by improvements in initial mark-on.
|
•
|
Shrink costs increased approximately 20 basis points due to unfavorable inventory results in the current year.
|
•
|
Occupancy costs increased approximately 20 basis points resulting from the de-leveraging from one fewer week of sales in the current year.
|
•
|
Distribution costs increased approximately 15 basis points resulting primarily from higher distribution center payroll costs.
|
•
|
Merchandise cost, including freight, decreased approximately 50 basis points primarily resulting from improved mark-on in 2017.
|
•
|
Markdowns decreased approximately 20 basis points resulting from fewer promotional markdowns in 2017.
|
•
|
Occupancy costs decreased approximately 10 basis points primarily resulting from the leverage from the sales in the 53rd week.
|
•
|
Depreciation costs decreased approximately 25 basis points as a result of assets becoming fully depreciated on the Family Dollar segment and leverage from the comparable store net sales increase for the Dollar Tree segment.
|
•
|
Store operating costs decreased approximately 15 basis points due to the leverage from the comparable store net sales increase.
|
•
|
Payroll expenses increased approximately 10 basis points, excluding the $12.6 million increase to the workers’ compensation reserve, resulting from higher incentive compensation costs and higher store hourly payroll costs.
|
•
|
Operating and corporate expenses increased approximately 15 basis points, excluding the receivable impairment, primarily resulting from higher advertising costs.
|
•
|
Merchandise cost, including freight, increased approximately 15 basis points primarily due to higher domestic freight costs, partially offset by increased initial mark-on and a greater percentage of sales of higher margin general merchandise.
|
•
|
Shrink costs increased approximately 15 basis points resulting from unfavorable physical inventory results in the current year.
|
•
|
Distribution costs increased approximately 10 basis points primarily resulting from higher distribution center payroll costs.
|
•
|
Occupancy costs increased approximately 10 basis points resulting from the de-leveraging from one fewer week of sales in the current year. Excluding the de-leveraging effect, occupancy costs decreased approximately 5 basis points resulting from the leverage from the comparable store net sales increase in 2018.
|
•
|
Merchandise cost, including freight, decreased approximately 15 basis points due primarily to improved mark-on.
|
•
|
Occupancy costs decreased approximately 20 basis points resulting primarily from the leverage from the increase in comparable store net sales and the 53rd week sales.
|
•
|
Shrink expense decreased approximately 15 basis points resulting from improved physical inventory results in the current year.
|
•
|
Payroll costs increased approximately 25 basis points resulting primarily from higher store hourly wages and higher incentive compensation expense.
|
•
|
Depreciation costs and utility costs decreased 10 basis points each resulting from the leverage from the comparable store net sales increase and sales in the 53rd week.
|
|
|
Year Ended
|
|||||||||||||||||||
|
|
February 2, 2019
|
|
February 3, 2018
|
|
January 28, 2017
|
|||||||||||||||
(in millions)
|
|
$
|
|
% of
Net Sales
|
|
$
|
|
% of
Net Sales
|
|
$
|
|
% of
Net Sales
|
|||||||||
Net sales
|
|
$
|
11,111.2
|
|
|
|
|
$
|
11,081.1
|
|
|
|
|
$
|
10,580.5
|
|
|
|
|||
Gross profit
|
|
2,810.0
|
|
|
25.3
|
%
|
|
3,023.4
|
|
|
27.3
|
%
|
|
2,810.0
|
|
|
26.6
|
%
|
|||
Operating income (loss)
|
|
(2,442.0
|
)
|
|
(22.0
|
)%
|
|
517.2
|
|
|
4.7
|
%
|
|
399.5
|
|
|
3.8
|
%
|
•
|
Markdown expense increased approximately 60 basis points resulting from expense related to sku rationalization and planned liquidations and higher promotional markdowns and seasonal markdowns.
|
•
|
Merchandise cost, including freight, increased approximately 50 basis points, primarily due to higher domestic freight costs, partially offset by increased initial mark-on.
|
•
|
Occupancy costs increased approximately 35 basis points resulting from the de-leveraging effect of the sales from the 53rd week in the prior year and the minimal increase in comparable store net sales.
|
•
|
Shrink costs increased approximately 30 basis points resulting from unfavorable physical inventory results in the current year.
|
•
|
Distribution costs increased approximately 25 basis points resulting primarily from higher merchandising and distribution payroll-related costs.
|
•
|
Payroll expenses increased approximately 40 basis points primarily due to higher store hourly payroll expenses as a result of the planned reinvestment of income tax savings, partially offset by decreased incentive compensation costs resulting from lower earnings compared to target in 2018.
|
•
|
Depreciation and amortization expense decreased approximately 10 basis points as a result of certain assets that were revalued upon the 2015 acquisition becoming fully depreciated and/or amortized.
|
•
|
Merchandise cost, including freight, decreased 65 basis points resulting primarily from higher initial mark-on.
|
•
|
Markdown expense decreased approximately 30 basis points resulting from lower promotional markdowns due to the improved sales performance.
|
•
|
Shrink expense increased approximately 15 basis points primarily due to unfavorable physical inventory results in 2017.
|
•
|
Depreciation costs decreased approximately 40 basis points as a result of certain assets that were revalued upon the 2015 acquisition becoming fully depreciated and/or amortized.
|
•
|
Store occupancy costs decreased approximately 25 basis points resulting primarily from lower repairs and maintenance and utility costs as a percentage of net sales.
|
•
|
Operating and corporate expenses increased approximately 35 basis points resulting from higher advertising and store supply costs.
|
|
|
Year Ended
|
||||||||||
|
|
February 2,
|
|
February 3,
|
|
January 28,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
||||||
Operating activities
|
|
$
|
1,766.0
|
|
|
$
|
1,510.2
|
|
|
$
|
1,673.3
|
|
Investing activities
|
|
(816.7
|
)
|
|
(627.9
|
)
|
|
(483.6
|
)
|
|||
Financing activities
|
|
(1,599.9
|
)
|
|
(651.5
|
)
|
|
(1,060.5
|
)
|
Contractual Obligations
|
Total
|
2019
|
2020
|
2021
|
2022
|
2023
|
Thereafter
|
||||||||||||||
Lease Financing
|
|
|
|
|
|
|
|
||||||||||||||
Operating lease obligations
|
$
|
7,307.6
|
|
$
|
1,435.9
|
|
$
|
1,176.7
|
|
$
|
1,100.0
|
|
$
|
899.6
|
|
$
|
729.1
|
|
$
|
1,966.3
|
|
Long-term Borrowings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Principal
|
4,300.0
|
|
—
|
|
750.0
|
|
300.0
|
|
—
|
|
1,000.0
|
|
2,250.0
|
|
|||||||
Interest
|
960.2
|
|
171.1
|
|
149.8
|
|
129.2
|
|
129.7
|
|
104.2
|
|
276.2
|
|
|||||||
Total obligations
|
$
|
12,567.8
|
|
$
|
1,607.0
|
|
$
|
2,076.5
|
|
$
|
1,529.2
|
|
$
|
1,029.3
|
|
$
|
1,833.3
|
|
$
|
4,492.5
|
|
Commitments
|
Total
|
Expiring in 2019
|
Expiring in 2020
|
Expiring in 2021
|
Expiring in 2022
|
Expiring in 2023
|
Thereafter
|
||||||||||||||
Letters of credit and surety bonds
|
$
|
415.5
|
|
$
|
413.1
|
|
$
|
2.2
|
|
$
|
0.2
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Purchase obligations
|
176.1
|
|
75.4
|
|
32.6
|
|
27.6
|
|
20.6
|
|
14.5
|
|
5.4
|
|
|||||||
Total commitments
|
$
|
591.6
|
|
$
|
488.5
|
|
$
|
34.8
|
|
$
|
27.8
|
|
$
|
20.6
|
|
$
|
14.5
|
|
$
|
5.4
|
|
•
|
The potential future revenue, EBITDA and cash flows of the reporting unit.
The projections use management’s assumptions about economic and market conditions over the projected period as well as our estimates of future performance and reporting unit revenue, gross margin, expenses and other factors. The resulting revenue, EBITDA and cash flow estimates are based on our most recent business operating plans, and various growth rates have been assumed for years beyond the current business plan period. We believe that the assumptions, estimates and rates used in our fiscal 2018 impairment evaluations are reasonable; however, variations in the assumptions, estimates and rates could result in significantly different estimates of fair value.
|
•
|
Selection of an appropriate discount rate.
Calculating the present value of future cash flows requires the selection of an appropriate discount rate, which is based on a weighted-average cost of capital analysis. The discount rate is affected by changes in short-term interest rates and long-term yield as well as variances in the typical capital structure of marketplace participants. Given current economic conditions, it is possible that the discount rate will fluctuate in the near term. We engaged third party experts to assist in the determination of the weighted-average cost of capital used to discount the cash flows for our Family Dollar reporting unit. The weighted-average cost of capital used to discount the cash flows for our evaluation was 8.0% for our fiscal 2018 analysis.
|
|
Page
|
|
|
|
|
Year Ended
|
||||||||||
|
|
February 2,
|
|
February 3,
|
|
January 28,
|
||||||
(in millions, except per share data)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net sales
|
|
$
|
22,823.3
|
|
|
$
|
22,245.5
|
|
|
$
|
20,719.2
|
|
Cost of sales
|
|
15,875.8
|
|
|
15,223.6
|
|
|
14,324.5
|
|
|||
Gross profit
|
|
6,947.5
|
|
|
7,021.9
|
|
|
6,394.7
|
|
|||
Selling, general and administrative expenses, excluding Goodwill
impairment and Receivable impairment
|
|
5,160.0
|
|
|
5,004.3
|
|
|
4,689.9
|
|
|||
Goodwill impairment
|
|
2,727.0
|
|
|
—
|
|
|
—
|
|
|||
Receivable impairment
|
|
—
|
|
|
18.5
|
|
|
—
|
|
|||
Selling, general and administrative expenses
|
|
7,887.0
|
|
|
5,022.8
|
|
|
4,689.9
|
|
|||
Operating income (loss)
|
|
(939.5
|
)
|
|
1,999.1
|
|
|
1,704.8
|
|
|||
Interest expense, net
|
|
370.0
|
|
|
301.8
|
|
|
375.5
|
|
|||
Other income, net
|
|
(0.5
|
)
|
|
(6.7
|
)
|
|
(0.1
|
)
|
|||
Income (loss) before income taxes
|
|
(1,309.0
|
)
|
|
1,704.0
|
|
|
1,329.4
|
|
|||
Provision for income taxes
|
|
281.8
|
|
|
(10.3
|
)
|
|
433.2
|
|
|||
Net income (loss)
|
|
$
|
(1,590.8
|
)
|
|
$
|
1,714.3
|
|
|
$
|
896.2
|
|
Basic net income (loss) per share
|
|
$
|
(6.69
|
)
|
|
$
|
7.24
|
|
|
$
|
3.80
|
|
Diluted net income (loss) per share
|
|
$
|
(6.66
|
)
|
|
$
|
7.21
|
|
|
$
|
3.78
|
|
|
|
Year Ended
|
||||||||||
|
|
February 2,
|
|
February 3,
|
|
January 28,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Net income (loss)
|
|
$
|
(1,590.8
|
)
|
|
$
|
1,714.3
|
|
|
$
|
896.2
|
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
|
(6.0
|
)
|
|
5.3
|
|
|
5.5
|
|
|||
|
|
|
|
|
|
|
||||||
Total comprehensive income (loss)
|
|
$
|
(1,596.8
|
)
|
|
$
|
1,719.6
|
|
|
$
|
901.7
|
|
(in millions, except share and per share data)
|
|
February 2, 2019
|
|
February 3, 2018
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
422.1
|
|
|
$
|
1,097.8
|
|
Merchandise inventories
|
|
3,536.0
|
|
|
3,169.3
|
|
||
Other current assets
|
|
335.2
|
|
|
309.2
|
|
||
Total current assets
|
|
4,293.3
|
|
|
4,576.3
|
|
||
Property, plant and equipment, net of accumulated depreciation of $3,690.6 and $3,192.1,
respectively
|
|
3,445.3
|
|
|
3,200.7
|
|
||
Restricted cash
|
|
24.6
|
|
|
—
|
|
||
Goodwill
|
|
2,296.6
|
|
|
5,025.2
|
|
||
Favorable lease rights, net of accumulated amortization of $287.8 and $230.9, respectively
|
|
288.7
|
|
|
375.3
|
|
||
Trade name intangible asset
|
|
3,100.0
|
|
|
3,100.0
|
|
||
Other assets
|
|
52.7
|
|
|
55.3
|
|
||
Total assets
|
|
$
|
13,501.2
|
|
|
$
|
16,332.8
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Current portion of long-term debt
|
|
$
|
—
|
|
|
$
|
915.9
|
|
Accounts payable
|
|
1,416.4
|
|
|
1,174.8
|
|
||
Income taxes payable
|
|
60.0
|
|
|
31.5
|
|
||
Other current liabilities
|
|
619.3
|
|
|
736.9
|
|
||
Total current liabilities
|
|
2,095.7
|
|
|
2,859.1
|
|
||
Long-term debt, net, excluding current portion
|
|
4,265.3
|
|
|
4,762.1
|
|
||
Unfavorable lease rights, net of accumulated amortization of $76.9 and $61.1, respectively
|
|
78.8
|
|
|
100.0
|
|
||
Deferred income taxes, net
|
|
973.2
|
|
|
985.2
|
|
||
Income taxes payable, long-term
|
|
35.4
|
|
|
43.8
|
|
||
Other liabilities
|
|
409.9
|
|
|
400.3
|
|
||
Total liabilities
|
|
7,858.3
|
|
|
9,150.5
|
|
||
Commitments and contingencies
|
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
|
|
|
||
Common stock, par value $0.01; 600,000,000 shares authorized, 238,081,664 and
237,325,963 shares issued and outstanding at February 2, 2019 and February 3, 2018,
respectively
|
|
2.4
|
|
|
2.4
|
|
||
Additional paid-in capital
|
|
2,602.7
|
|
|
2,545.3
|
|
||
Accumulated other comprehensive loss
|
|
(38.3
|
)
|
|
(32.3
|
)
|
||
Retained earnings
|
|
3,076.1
|
|
|
4,666.9
|
|
||
Total shareholders’ equity
|
|
5,642.9
|
|
|
7,182.3
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
13,501.2
|
|
|
$
|
16,332.8
|
|
(in millions)
|
|
Common
Stock
Shares
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
Share-
holders’
Equity
|
|||||||||||
Balance at January 30, 2016
|
|
235.0
|
|
|
$
|
2.4
|
|
|
$
|
2,391.2
|
|
|
$
|
(43.1
|
)
|
|
$
|
2,056.4
|
|
|
$
|
4,406.9
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
896.2
|
|
|
896.2
|
|
|||||
Total other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.5
|
|
|
—
|
|
|
5.5
|
|
|||||
Issuance of stock under Employee Stock
Purchase Plan
|
|
0.1
|
|
|
—
|
|
|
8.0
|
|
|
—
|
|
|
—
|
|
|
8.0
|
|
|||||
Exercise of stock options
|
|
0.6
|
|
|
—
|
|
|
33.5
|
|
|
—
|
|
|
—
|
|
|
33.5
|
|
|||||
Stock-based compensation, net
|
|
0.4
|
|
|
—
|
|
|
39.4
|
|
|
—
|
|
|
—
|
|
|
39.4
|
|
|||||
Balance at January 28, 2017
|
|
236.1
|
|
|
2.4
|
|
|
2,472.1
|
|
|
(37.6
|
)
|
|
2,952.6
|
|
|
5,389.5
|
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,714.3
|
|
|
1,714.3
|
|
|||||
Total other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.3
|
|
|
—
|
|
|
5.3
|
|
|||||
Issuance of stock under Employee Stock
Purchase Plan
|
|
0.2
|
|
|
—
|
|
|
8.4
|
|
|
—
|
|
|
—
|
|
|
8.4
|
|
|||||
Exercise of stock options
|
|
0.5
|
|
|
—
|
|
|
26.6
|
|
|
—
|
|
|
—
|
|
|
26.6
|
|
|||||
Stock-based compensation, net
|
|
0.5
|
|
|
—
|
|
|
38.2
|
|
|
—
|
|
|
—
|
|
|
38.2
|
|
|||||
Balance at February 3, 2018
|
|
237.3
|
|
|
2.4
|
|
|
2,545.3
|
|
|
(32.3
|
)
|
|
4,666.9
|
|
|
7,182.3
|
|
|||||
Net income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,590.8
|
)
|
|
(1,590.8
|
)
|
|||||
Total other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.0
|
)
|
|
—
|
|
|
(6.0
|
)
|
|||||
Issuance of stock under Employee Stock
Purchase Plan
|
|
0.2
|
|
|
—
|
|
|
10.0
|
|
|
—
|
|
|
—
|
|
|
10.0
|
|
|||||
Exercise of stock options
|
|
0.1
|
|
|
—
|
|
|
7.5
|
|
|
—
|
|
|
—
|
|
|
7.5
|
|
|||||
Stock-based compensation, net
|
|
0.5
|
|
|
—
|
|
|
39.9
|
|
|
—
|
|
|
—
|
|
|
39.9
|
|
|||||
Balance at February 2, 2019
|
|
238.1
|
|
|
$
|
2.4
|
|
|
$
|
2,602.7
|
|
|
$
|
(38.3
|
)
|
|
$
|
3,076.1
|
|
|
$
|
5,642.9
|
|
|
|
Year Ended
|
||||||||||
|
|
February 2,
|
|
February 3,
|
|
January 28,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
(1,590.8
|
)
|
|
$
|
1,714.3
|
|
|
$
|
896.2
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|||
Goodwill impairment
|
|
2,727.0
|
|
|
—
|
|
|
—
|
|
|||
Receivable impairment
|
|
—
|
|
|
18.5
|
|
|
—
|
|
|||
Depreciation and amortization
|
|
621.1
|
|
|
611.2
|
|
|
637.5
|
|
|||
Provision for deferred income taxes
|
|
(12.1
|
)
|
|
(473.5
|
)
|
|
(124.1
|
)
|
|||
Stock-based compensation expense
|
|
63.1
|
|
|
65.7
|
|
|
61.6
|
|
|||
Amortization of debt discount and debt-issuance costs
|
|
57.2
|
|
|
15.4
|
|
|
55.2
|
|
|||
Other non-cash adjustments to net income (loss)
|
|
7.8
|
|
|
10.9
|
|
|
9.4
|
|
|||
Loss on debt extinguishment
|
|
114.7
|
|
|
—
|
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|||
Merchandise inventories
|
|
(369.2
|
)
|
|
(300.9
|
)
|
|
21.9
|
|
|||
Other current assets
|
|
(20.2
|
)
|
|
(114.6
|
)
|
|
117.2
|
|
|||
Accounts payable
|
|
242.6
|
|
|
54.5
|
|
|
(133.8
|
)
|
|||
Income taxes payable
|
|
28.5
|
|
|
(58.5
|
)
|
|
77.1
|
|
|||
Other current liabilities
|
|
(105.4
|
)
|
|
(22.7
|
)
|
|
30.4
|
|
|||
Other liabilities
|
|
1.7
|
|
|
(10.1
|
)
|
|
24.7
|
|
|||
Net cash provided by operating activities
|
|
1,766.0
|
|
|
1,510.2
|
|
|
1,673.3
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|||
Capital expenditures
|
|
(817.1
|
)
|
|
(632.2
|
)
|
|
(564.7
|
)
|
|||
Purchase of restricted investments
|
|
—
|
|
|
—
|
|
|
(36.1
|
)
|
|||
Proceeds from sale of restricted and unrestricted investments
|
|
—
|
|
|
4.0
|
|
|
118.1
|
|
|||
Proceeds from (payments for) fixed asset disposition
|
|
0.4
|
|
|
0.3
|
|
|
(0.9
|
)
|
|||
Net cash used in investing activities
|
|
(816.7
|
)
|
|
(627.9
|
)
|
|
(483.6
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|||
Proceeds from long-term debt, net of discount
|
|
4,775.8
|
|
|
—
|
|
|
2,962.5
|
|
|||
Principal payments for long-term debt
|
|
(6,214.7
|
)
|
|
(659.1
|
)
|
|
(4,036.2
|
)
|
|||
Debt-issuance and debt extinguishment costs
|
|
(155.3
|
)
|
|
—
|
|
|
(6.1
|
)
|
|||
Proceeds from revolving credit facility
|
|
50.0
|
|
|
—
|
|
|
140.0
|
|
|||
Repayments of revolving credit facility
|
|
(50.0
|
)
|
|
—
|
|
|
(140.0
|
)
|
|||
Proceeds from stock issued pursuant to stock-based compensation plans
|
|
17.5
|
|
|
35.0
|
|
|
41.5
|
|
|||
Cash paid for taxes on exercises/vesting of stock-based compensation
|
|
(23.2
|
)
|
|
(27.4
|
)
|
|
(22.2
|
)
|
|||
Net cash used in financing activities
|
|
(1,599.9
|
)
|
|
(651.5
|
)
|
|
(1,060.5
|
)
|
|||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
|
(0.5
|
)
|
|
0.6
|
|
|
1.1
|
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
(651.1
|
)
|
|
231.4
|
|
|
130.3
|
|
|||
Cash, cash equivalents and restricted cash at beginning of year
|
|
1,097.8
|
|
|
866.4
|
|
|
736.1
|
|
|||
Cash, cash equivalents and restricted cash at end of year
|
|
$
|
446.7
|
|
|
$
|
1,097.8
|
|
|
$
|
866.4
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|
|||
Cash paid for:
|
|
|
|
|
|
|
|
|
|
|||
Interest, net of amounts capitalized
|
|
$
|
383.4
|
|
|
$
|
286.5
|
|
|
$
|
329.1
|
|
Income taxes
|
|
$
|
277.5
|
|
|
$
|
552.4
|
|
|
$
|
501.8
|
|
Non-cash transactions:
|
|
|
|
|
|
|
||||||
Accrued capital expenditures
|
|
$
|
43.2
|
|
|
$
|
45.0
|
|
|
$
|
30.3
|
|
Buildings
|
39 to 40 years
|
Furniture, fixtures and equipment
|
3 to 15 years
|
|
|
February 2,
|
|
February 3,
|
||||
(in millions)
|
|
2019
|
|
2018
|
||||
Prepaid rent
|
|
$
|
142.5
|
|
|
$
|
138.3
|
|
Accounts receivable, net
|
|
100.9
|
|
|
90.4
|
|
||
Prepaid store supplies
|
|
46.3
|
|
|
47.1
|
|
||
Other prepaid assets
|
|
45.5
|
|
|
33.4
|
|
||
Total other current assets
|
|
$
|
335.2
|
|
|
$
|
309.2
|
|
|
|
February 2,
|
|
February 3,
|
||||
(in millions)
|
|
2019
|
|
2018
|
||||
Land
|
|
$
|
215.3
|
|
|
$
|
208.0
|
|
Buildings
|
|
1,300.7
|
|
|
1,092.5
|
|
||
Leasehold improvements
|
|
2,037.4
|
|
|
1,860.2
|
|
||
Furniture, fixtures and equipment
|
|
3,348.7
|
|
|
3,003.3
|
|
||
Construction in progress
|
|
233.8
|
|
|
228.8
|
|
||
Total property, plant and equipment
|
|
7,135.9
|
|
|
6,392.8
|
|
||
Less: accumulated depreciation
|
|
3,690.6
|
|
|
3,192.1
|
|
||
Total property, plant and equipment, net
|
|
$
|
3,445.3
|
|
|
$
|
3,200.7
|
|
|
|
February 2,
|
|
February 3,
|
||||
(in millions)
|
|
2019
|
|
2018
|
||||
Taxes (other than income taxes)
|
|
$
|
159.5
|
|
|
$
|
176.6
|
|
Compensation and benefits
|
|
122.1
|
|
|
155.2
|
|
||
Insurance
|
|
106.0
|
|
|
105.4
|
|
||
Accrued construction costs
|
|
43.2
|
|
|
45.0
|
|
||
Rent-related liabilities
|
|
37.5
|
|
|
34.1
|
|
||
Accrued interest
|
|
29.1
|
|
|
91.1
|
|
||
Accrued utility expenses
|
|
23.1
|
|
|
23.9
|
|
||
Other
|
|
98.8
|
|
|
105.6
|
|
||
Total other current liabilities
|
|
$
|
619.3
|
|
|
$
|
736.9
|
|
|
|
February 2,
|
|
February 3,
|
||||
(in millions)
|
|
2019
|
|
2018
|
||||
Insurance
|
|
$
|
221.6
|
|
|
$
|
230.2
|
|
Deferred rent
|
|
142.8
|
|
|
136.5
|
|
||
Other
|
|
45.5
|
|
|
33.6
|
|
||
Total other long-term liabilities
|
|
$
|
409.9
|
|
|
$
|
400.3
|
|
(in millions)
|
|
Dollar Tree
|
|
Family Dollar
|
|
Total
|
||||||
Balance at January 28, 2017
|
|
$
|
345.4
|
|
|
$
|
4,678.1
|
|
|
$
|
5,023.5
|
|
Foreign currency translation adjustments
|
|
1.7
|
|
|
—
|
|
|
1.7
|
|
|||
Balance at February 3, 2018
|
|
347.1
|
|
|
4,678.1
|
|
|
5,025.2
|
|
|||
Foreign currency translation adjustments
|
|
(1.6
|
)
|
|
—
|
|
|
(1.6
|
)
|
|||
Goodwill reassignment for re-bannered stores
|
|
31.0
|
|
|
(31.0
|
)
|
|
—
|
|
|||
Goodwill impairment
|
|
—
|
|
|
(2,727.0
|
)
|
|
(2,727.0
|
)
|
|||
Balance at February 2, 2019
|
|
$
|
376.5
|
|
|
$
|
1,920.1
|
|
|
$
|
2,296.6
|
|
|
|
Year Ended
|
||||||||||
|
|
February 2,
|
|
February 3,
|
|
January 28,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Current taxes:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
245.6
|
|
|
$
|
439.3
|
|
|
$
|
480.5
|
|
State
|
|
47.8
|
|
|
23.8
|
|
|
79.5
|
|
|||
Foreign
|
|
0.4
|
|
|
0.3
|
|
|
0.8
|
|
|||
Total current taxes
|
|
293.8
|
|
|
463.4
|
|
|
560.8
|
|
|||
Deferred taxes:
|
|
|
|
|
|
|
||||||
Federal
|
|
0.3
|
|
|
(456.0
|
)
|
|
(37.7
|
)
|
|||
State
|
|
(12.3
|
)
|
|
(17.7
|
)
|
|
(89.9
|
)
|
|||
Total deferred taxes
|
|
(12.0
|
)
|
|
(473.7
|
)
|
|
(127.6
|
)
|
|||
Provision for income taxes
|
|
$
|
281.8
|
|
|
$
|
(10.3
|
)
|
|
$
|
433.2
|
|
|
|
Year Ended
|
|||||||
|
|
February 2, 2019
|
|
February 3, 2018
|
|
January 28, 2017
|
|||
Statutory U.S. federal income tax (benefit) rate
|
|
(21.0
|
)%
|
|
33.7
|
%
|
|
35.0
|
%
|
Effect of:
|
|
|
|
|
|
|
|||
Goodwill impairment
|
|
43.7
|
|
|
—
|
|
|
—
|
|
State and local income taxes, net of federal income tax benefit
|
|
3.0
|
|
|
2.5
|
|
|
3.0
|
|
Work Opportunity Tax Credit
|
|
(2.0
|
)
|
|
(1.3
|
)
|
|
(1.6
|
)
|
State tax election
|
|
—
|
|
|
—
|
|
|
(1.4
|
)
|
Deferred tax rate change
|
|
—
|
|
|
(0.6
|
)
|
|
(1.6
|
)
|
Incremental tax expense (benefit) of exercises/vesting of
equity-based compensation |
|
0.1
|
|
|
(0.8
|
)
|
|
(0.6
|
)
|
Change in valuation allowance
|
|
0.3
|
|
|
(0.1
|
)
|
|
0.1
|
|
Tax Cuts and Jobs Act
|
|
(1.3
|
)
|
|
(33.0
|
)
|
|
—
|
|
Other, net
|
|
(1.3
|
)
|
|
(1.0
|
)
|
|
(0.3
|
)
|
Effective tax (benefit) rate
|
|
21.5
|
%
|
|
(0.6
|
)%
|
|
32.6
|
%
|
(in millions)
|
|
February 2,
2019 |
|
February 3,
2018 |
||||
Deferred tax assets:
|
|
|
|
|
||||
Deferred rent
|
|
$
|
44.3
|
|
|
$
|
42.7
|
|
Accrued expenses
|
|
18.0
|
|
|
17.8
|
|
||
Net operating losses, interest expense and credit carryforwards
|
|
90.7
|
|
|
75.6
|
|
||
Accrued compensation expense
|
|
31.6
|
|
|
23.2
|
|
||
State tax election
|
|
20.9
|
|
|
22.8
|
|
||
Other
|
|
3.0
|
|
|
—
|
|
||
Total deferred tax assets
|
|
208.5
|
|
|
182.1
|
|
||
Valuation allowance
|
|
(42.6
|
)
|
|
(38.6
|
)
|
||
Deferred tax assets, net
|
|
165.9
|
|
|
143.5
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
|
||
Property and equipment
|
|
(235.5
|
)
|
|
(218.5
|
)
|
||
Other intangibles
|
|
(864.0
|
)
|
|
(880.5
|
)
|
||
Inventory
|
|
(17.8
|
)
|
|
(27.1
|
)
|
||
Prepaids
|
|
(21.8
|
)
|
|
—
|
|
||
Other
|
|
—
|
|
|
(2.6
|
)
|
||
Total deferred tax liabilities
|
|
(1,139.1
|
)
|
|
(1,128.7
|
)
|
||
Deferred income taxes, net
|
|
$
|
(973.2
|
)
|
|
$
|
(985.2
|
)
|
(in millions)
|
|
February 2, 2019
|
|
February 3, 2018
|
||||
Beginning Balance
|
|
$
|
43.8
|
|
|
$
|
71.2
|
|
Additions, based on tax positions related to current year
|
|
4.6
|
|
|
2.5
|
|
||
Additions for tax positions of prior years
|
|
4.5
|
|
|
9.8
|
|
||
Reductions for tax positions of prior years
|
|
—
|
|
|
(31.7
|
)
|
||
Settlements
|
|
(2.2
|
)
|
|
(2.9
|
)
|
||
Lapses in statutes of limitation
|
|
(15.3
|
)
|
|
(5.1
|
)
|
||
Ending balance
|
|
$
|
35.4
|
|
|
$
|
43.8
|
|
|
(in millions)
|
||
2019
|
$
|
1,435.9
|
|
2020
|
1,176.7
|
|
|
2021
|
1,100.0
|
|
|
2022
|
899.6
|
|
|
2023
|
729.1
|
|
|
Thereafter
|
1,966.3
|
|
|
Total minimum lease payments
|
$
|
7,307.6
|
|
|
|
Year Ended
|
||||||||||
|
|
February 2,
|
|
February 3,
|
|
January 28,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Minimum rentals
|
|
$
|
1,404.0
|
|
|
$
|
1,343.5
|
|
|
$
|
1,276.6
|
|
Contingent rentals
|
|
7.3
|
|
|
5.2
|
|
|
6.3
|
|
|
|
As of February 2, 2019
|
|
As of February 3, 2018
|
||||||||||||
(in millions)
|
|
Principal
|
|
Unamortized Debt Discount, Premium and Issuance Costs
|
|
Principal
|
|
Unamortized Debt Discount, Premium and Issuance Costs
|
||||||||
5.25% Acquisition Notes, due 2020
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
750.0
|
|
|
$
|
6.1
|
|
5.75% Acquisition Notes, due 2023
|
|
—
|
|
|
—
|
|
|
2,500.0
|
|
|
30.8
|
|
||||
Term Loan A-1
|
|
—
|
|
|
—
|
|
|
1,532.7
|
|
|
3.4
|
|
||||
Term Loan B-2
|
|
—
|
|
|
—
|
|
|
650.0
|
|
|
8.6
|
|
||||
$1.25 billion Tranche A Revolving Credit Facility
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12.6
|
|
||||
5.00% Senior Notes, due 2021
|
|
300.0
|
|
|
(4.6
|
)
|
|
300.0
|
|
|
(6.8
|
)
|
||||
$1.25 billion Revolving Credit Facility, interest
payable at LIBOR, reset periodically, plus
1.25%, which was 3.76% at February 2, 2019
|
|
—
|
|
|
10.2
|
|
|
—
|
|
|
—
|
|
||||
Senior Floating Rate Notes, due 2020, interest
payable at LIBOR, reset quarterly, plus 0.70%,
which was 3.43% at February 2, 2019
|
|
750.0
|
|
|
3.2
|
|
|
—
|
|
|
—
|
|
||||
3.70% Senior Notes, due 2023
|
|
1,000.0
|
|
|
7.5
|
|
|
—
|
|
|
—
|
|
||||
4.00% Senior Notes, due 2025
|
|
1,000.0
|
|
|
7.2
|
|
|
—
|
|
|
—
|
|
||||
4.20% Senior Notes, due 2028
|
|
1,250.0
|
|
|
11.2
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
4,300.0
|
|
|
$
|
34.7
|
|
|
$
|
5,732.7
|
|
|
$
|
54.7
|
|
2019
|
2020
|
2021
|
2022
|
2023
|
Thereafter
|
||||||||||||
$
|
—
|
|
$
|
750.0
|
|
$
|
300.0
|
|
$
|
—
|
|
$
|
1,000.0
|
|
$
|
2,250.0
|
|
(in millions)
|
|
February 2,
2019 |
|
February 3,
2018 |
||||
Level 1
|
|
|
|
|
||||
Deferred compensation plan assets
|
|
$
|
21.8
|
|
|
$
|
20.7
|
|
|
|
February 2, 2019
|
|
February 3, 2018
|
||||||||||||
(in millions)
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
||||||||
Level 1
|
|
|
|
|
|
|
|
|
||||||||
Senior Notes and Acquisition Notes
|
|
$
|
4,198.6
|
|
|
$
|
4,275.5
|
|
|
$
|
3,684.6
|
|
|
$
|
3,519.9
|
|
Level 2
|
|
|
|
|
|
|
|
|
||||||||
Term loans
|
|
—
|
|
|
—
|
|
|
2,187.6
|
|
|
2,170.7
|
|
|
|
Year Ended
|
||||||||||
|
|
February 2,
|
|
February 3,
|
|
January 28,
|
||||||
(in millions, except per share data)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Basic net income (loss) per share:
|
|
|
|
|
|
|
||||||
Net income (loss)
|
|
$
|
(1,590.8
|
)
|
|
$
|
1,714.3
|
|
|
$
|
896.2
|
|
Weighted average number of shares outstanding
|
|
237.9
|
|
|
236.8
|
|
|
235.7
|
|
|||
Basic net income (loss) per share
|
|
$
|
(6.69
|
)
|
|
$
|
7.24
|
|
|
$
|
3.80
|
|
Diluted net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|||
Net income (loss)
|
|
$
|
(1,590.8
|
)
|
|
$
|
1,714.3
|
|
|
$
|
896.2
|
|
Weighted average number of shares outstanding
|
|
237.9
|
|
|
236.8
|
|
|
235.7
|
|
|||
Dilutive effect of stock options and restricted stock (as determined by
applying the treasury stock method) |
|
0.8
|
|
|
0.9
|
|
|
1.1
|
|
|||
Weighted average number of shares and dilutive potential shares
outstanding |
|
238.7
|
|
|
237.7
|
|
|
236.8
|
|
|||
Diluted net income (loss) per share
|
|
$
|
(6.66
|
)
|
|
$
|
7.21
|
|
|
$
|
3.78
|
|
|
|
Year Ended
|
||||||||||
|
|
February 2,
|
|
February 3,
|
|
January 28,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Dollar Tree Retirement Savings Plan, formerly Dollar Tree
Inc. Affiliates and Subsidiaries Profit Sharing and 401(k)
Retirement Plan
|
|
$
|
41.4
|
|
|
$
|
52.9
|
|
|
$
|
39.9
|
|
Family Dollar Employee Savings and Retirement Plan and
Trust |
|
—
|
|
|
—
|
|
|
9.2
|
|
|||
Total
|
|
$
|
41.4
|
|
|
$
|
52.9
|
|
|
$
|
49.1
|
|
|
20% after two years of service
|
|
40% after three years of service
|
|
60% after four years of service
|
|
100% after five years of service
|
|
|
Year Ended
|
||||||||||
|
|
February 2,
|
|
February 3,
|
|
January 28,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cost of sales
|
|
$
|
12.1
|
|
|
$
|
12.8
|
|
|
$
|
10.8
|
|
Selling, general and administrative expense
|
|
51.2
|
|
|
53.0
|
|
|
49.5
|
|
|||
Total stock-based compensation expense
|
|
$
|
63.3
|
|
|
$
|
65.8
|
|
|
$
|
60.3
|
|
|
|
Number of Shares
|
|
Weighted Average Grant Date Fair Value
|
|||
Nonvested at February 3, 2018
|
|
1,525,252
|
|
|
$
|
79.37
|
|
Granted
|
|
838,335
|
|
|
94.34
|
|
|
Vested
|
|
(681,202
|
)
|
|
79.84
|
|
|
Forfeited
|
|
(236,285
|
)
|
|
84.23
|
|
|
Nonvested at February 2, 2019
|
|
1,446,100
|
|
|
$
|
86.96
|
|
|
|
Fiscal 2016
|
||
Expected term in years
|
|
6.50
|
|
|
Expected volatility
|
|
24.51
|
%
|
|
Annual dividend yield
|
|
—
|
%
|
|
Risk free interest rate
|
|
2.09
|
%
|
|
Weighted-average fair value of options granted
during the period
|
|
$
|
22.10
|
|
|
|
Number of Shares
|
|
Weighted Average Per Share Exercise Price
|
|
Weighted Average Remaining Term
|
|
Aggregate Intrinsic Value
(in millions)
|
|||||
Outstanding, beginning of period
|
|
523,083
|
|
|
$
|
70.14
|
|
|
|
|
|
||
Granted
|
|
9,804
|
|
|
87.82
|
|
|
|
|
|
|||
Exercised
|
|
(136,073
|
)
|
|
54.89
|
|
|
|
|
|
|||
Forfeited
|
|
(29,618
|
)
|
|
71.05
|
|
|
|
|
|
|||
Outstanding, end of period
|
|
367,196
|
|
|
$
|
76.17
|
|
|
5.94
|
|
$
|
5.3
|
|
Options vested and exercisable at February 2,
2019 |
|
230,378
|
|
|
$
|
77.41
|
|
|
5.94
|
|
$
|
3.0
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Range of Exercise Prices
|
|
Options Outstanding at February 2, 2019
|
|
Weighted Average Remaining Contractual Life
|
|
Weighted Average Exercise Price
|
|
Options Exercisable at February 2, 2019
|
|
Weighted Average Exercise Price
|
||||||
$56.90 to $76.72
|
|
181,940
|
|
|
5.61
|
|
$
|
73.97
|
|
|
46,196
|
|
|
$
|
73.73
|
|
$76.73 to $76.97
|
|
151,404
|
|
|
5.70
|
|
76.97
|
|
|
151,404
|
|
|
76.97
|
|
||
$76.98 to $79.75
|
|
12,031
|
|
|
6.38
|
|
78.14
|
|
|
10,957
|
|
|
78.10
|
|
||
$79.76 to $85.00
|
|
11,581
|
|
|
7.77
|
|
82.46
|
|
|
11,581
|
|
|
82.46
|
|
||
$85.01 to $107.31
|
|
10,240
|
|
|
8.82
|
|
94.02
|
|
|
10,240
|
|
|
94.02
|
|
||
$56.90 to $107.31
|
|
367,196
|
|
|
5.94
|
|
$
|
76.17
|
|
|
230,378
|
|
|
$
|
77.41
|
|
|
Fiscal 2018
|
|
Fiscal 2017
|
|
Fiscal 2016
|
|||
Expected term
|
3 months
|
|
3 months
|
|
3 months
|
|||
Expected volatility
|
18.8
|
%
|
|
10.9
|
%
|
|
14.6
|
%
|
Annual dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Risk free interest rate
|
1.9
|
%
|
|
1.1
|
%
|
|
0.4
|
%
|
|
|
Year Ended
|
|||||||||||||||||||
|
|
February 2,
|
|
February 3,
|
|
January 28,
|
|||||||||||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
Dollar Tree segment net sales by
merchandise type:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Consumable
|
|
$
|
5,703.8
|
|
|
48.7
|
%
|
|
$
|
5,470.6
|
|
|
49.0
|
%
|
|
$
|
4,957.8
|
|
|
48.9
|
%
|
Variety
|
|
5,457.8
|
|
|
46.6
|
%
|
|
5,169.1
|
|
|
46.3
|
%
|
|
4,714.5
|
|
|
46.5
|
%
|
|||
Seasonal
|
|
550.5
|
|
|
4.7
|
%
|
|
524.7
|
|
|
4.7
|
%
|
|
466.4
|
|
|
4.6
|
%
|
|||
Total net sales
|
|
$
|
11,712.1
|
|
|
100.0
|
%
|
|
$
|
11,164.4
|
|
|
100.0
|
%
|
|
$
|
10,138.7
|
|
|
100.0
|
%
|
|
|
Year Ended
|
||||||||||
|
|
February 2,
|
|
February 3,
|
|
January 28,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Gross profit:
|
|
|
|
|
|
|
||||||
Dollar Tree
|
|
$
|
4,137.5
|
|
|
$
|
3,998.5
|
|
|
$
|
3,584.7
|
|
Family Dollar
|
|
2,810.0
|
|
|
3,023.4
|
|
|
2,810.0
|
|
|||
Total gross profit
|
|
$
|
6,947.5
|
|
|
$
|
7,021.9
|
|
|
$
|
6,394.7
|
|
|
|
Year Ended
|
||||||||||
|
|
February 2,
|
|
February 3,
|
|
January 28,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Depreciation and amortization expense:
|
|
|
|
|
|
|
||||||
Dollar Tree
|
|
$
|
271.7
|
|
|
$
|
251.8
|
|
|
$
|
241.3
|
|
Family Dollar
|
|
349.7
|
|
|
359.7
|
|
|
396.5
|
|
|||
Total depreciation and amortization expense
|
|
$
|
621.4
|
|
|
$
|
611.5
|
|
|
$
|
637.8
|
|
|
|
Year Ended
|
||||||||||
|
|
February 2,
|
|
February 3,
|
|
January 28,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Operating income (loss):
|
|
|
|
|
|
|
||||||
Dollar Tree
|
|
$
|
1,502.5
|
|
|
$
|
1,481.9
|
|
|
$
|
1,305.3
|
|
Family Dollar
|
|
(2,442.0
|
)
|
|
517.2
|
|
|
399.5
|
|
|||
Total operating income (loss)
|
|
$
|
(939.5
|
)
|
|
$
|
1,999.1
|
|
|
$
|
1,704.8
|
|
|
|
Year Ended
|
||||||||||
|
|
February 2,
|
|
February 3,
|
|
January 28,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
|
2017
|
||||||
Capital expenditures:
|
|
|
|
|
|
|
||||||
Dollar Tree
|
|
$
|
556.5
|
|
|
$
|
383.1
|
|
|
$
|
404.9
|
|
Family Dollar
|
|
260.6
|
|
|
249.1
|
|
|
159.8
|
|
|||
Total capital expenditures
|
|
$
|
817.1
|
|
|
$
|
632.2
|
|
|
$
|
564.7
|
|
|
|
As of
|
||||||
|
|
February 2,
|
|
February 3,
|
||||
(in millions)
|
|
2019
|
|
2018
|
||||
Total assets:
|
|
|
|
|
||||
Dollar Tree
|
|
$
|
4,310.1
|
|
|
$
|
4,113.4
|
|
Family Dollar
|
|
9,191.1
|
|
|
12,219.4
|
|
||
Total assets
|
|
$
|
13,501.2
|
|
|
$
|
16,332.8
|
|
|
|
As of
|
||||||
|
|
February 2,
|
|
February 3,
|
||||
(in millions)
|
|
2019
|
|
2018
|
||||
Total goodwill:
|
|
|
|
|
||||
Dollar Tree
|
|
$
|
376.5
|
|
|
$
|
347.1
|
|
Family Dollar
|
|
1,920.1
|
|
|
4,678.1
|
|
||
Total goodwill
|
|
$
|
2,296.6
|
|
|
$
|
5,025.2
|
|
(dollars in millions, except diluted net income (loss) per share data)
|
|
First
Quarter
1
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Fiscal 2018:
|
|
|
|
|
|
|
|
|
||||||||
Net sales
|
|
$
|
5,553.7
|
|
|
$
|
5,525.6
|
|
|
$
|
5,538.8
|
|
|
$
|
6,205.2
|
|
Gross profit
2
|
|
$
|
1,699.6
|
|
|
$
|
1,663.9
|
|
|
$
|
1,671.9
|
|
|
$
|
1,912.1
|
|
Operating income (loss)
3
|
|
$
|
437.6
|
|
|
$
|
382.5
|
|
|
$
|
387.8
|
|
|
$
|
(2,147.4
|
)
|
Net income (loss)
2,3,4
|
|
$
|
160.5
|
|
|
$
|
273.9
|
|
|
$
|
281.8
|
|
|
$
|
(2,307.0
|
)
|
Diluted net income (loss) per share
2,3,4
|
|
$
|
0.67
|
|
|
$
|
1.15
|
|
|
$
|
1.18
|
|
|
$
|
(9.66
|
)
|
Stores open at end of quarter
|
|
14,957
|
|
|
15,073
|
|
|
15,187
|
|
|
15,237
|
|
||||
Comparable store net sales change
|
|
1.4
|
%
|
|
1.9
|
%
|
|
1.0
|
%
|
|
2.3
|
%
|
||||
Fiscal 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales
|
|
$
|
5,287.1
|
|
|
$
|
5,281.2
|
|
|
$
|
5,316.6
|
|
|
$
|
6,360.6
|
|
Gross profit
|
|
$
|
1,627.1
|
|
|
$
|
1,627.8
|
|
|
$
|
1,666.0
|
|
|
$
|
2,101.0
|
|
Operating income
5
|
|
$
|
388.8
|
|
|
$
|
419.5
|
|
|
$
|
425.2
|
|
|
$
|
765.6
|
|
Net income
6
|
|
$
|
200.5
|
|
|
$
|
233.8
|
|
|
$
|
239.9
|
|
|
$
|
1,040.1
|
|
Diluted net income per share
6
|
|
$
|
0.85
|
|
|
$
|
0.98
|
|
|
$
|
1.01
|
|
|
$
|
4.37
|
|
Stores open at end of quarter
|
|
14,482
|
|
|
14,581
|
|
|
14,744
|
|
|
14,835
|
|
||||
Comparable store net sales change
|
|
0.5
|
%
|
|
2.4
|
%
|
|
3.3
|
%
|
|
2.5
|
%
|
1.
|
Documents filed as part of this report
:
|
1.
|
Financial Statements. Reference is made to the Index to the Consolidated Financial Statements set forth under Part II, Item 8, on page 42 of this Form 10-K.
|
2.
|
Financial Statement Schedules. All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions, are not applicable, or the information is included in the Consolidated Financial Statements, and therefore have been omitted.
|
3.
|
Exhibits. The following exhibits, are filed as part of, or incorporated by reference into, this report.
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit
|
|
Exhibit Description
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
|
Filed Herewith
|
2.1
|
|
|
8-K
|
|
2.1
|
|
7/29/2014
|
|
|
|
2.2
|
|
|
8-K
|
|
2.1
|
|
9/5/2014
|
|
|
|
3.1
|
|
|
8-K
|
|
3.1
|
|
6/21/2013
|
|
|
|
3.2
|
|
|
8-K
|
|
3.1
|
|
3/6/2019
|
|
|
|
4.1
|
|
|
8-K
|
|
4.1
|
|
3/13/2008
|
|
|
|
4.2.1
|
|
|
S-3 ASR
|
|
4.1
|
|
4/2/2018
|
|
|
|
4.2.2
|
|
|
8-K
|
|
4.1
|
|
4/20/2018
|
|
|
|
10.1.1
|
*
|
|
DEF 14A
|
|
C
|
|
4/30/2003
|
|
|
|
10.1.2
|
*
|
|
8-K
|
|
10.7
|
|
3/3/2008
|
|
|
|
10.1.3
|
*
|
|
10-K
|
|
10.1
|
|
4/1/2008
|
|
|
|
10.2
|
*
|
|
8-K
|
|
10.1
|
|
2/3/2005
|
|
|
|
10.3
|
*
|
|
8-K
|
|
10.1
|
|
3/20/2007
|
|
|
|
10.4
|
*
|
|
10-K
|
|
10.6
|
|
4/4/2007
|
|
|
|
10.5
|
*
|
|
8-K
|
|
10.5
|
|
1/23/2008
|
|
|
|
10.6
|
*
|
|
8-K
|
|
N/A
|
|
1/23/2008
|
|
|
|
10.7
|
*
|
|
8-K
|
|
10.5
|
|
3/3/2008
|
|
|
|
10.8.1
|
*
|
|
8-K
|
|
10.1
|
|
12/5/2008
|
|
|
|
10.8.2
|
*
|
|
8-K
|
|
10.1
|
|
10/11/2011
|
|
|
|
10.9
|
*
|
|
10-Q
|
|
10.1
|
|
5/19/2011
|
|
|
|
10.10.1
|
*
|
|
8-K
|
|
10.1
|
|
6/22/2011
|
|
|
|
10.10.2
|
*
|
|
10-Q
|
|
10.1
|
|
9/2/2016
|
|
|
|
10.11
|
*
|
|
8-K
|
|
10.2
|
|
6/22/2011
|
|
|
|
10.12
|
*
|
|
8-K
|
|
10.3
|
|
6/22/2011
|
|
|
|
10.13
|
*
|
|
8-K
|
|
10.4
|
|
6/22/2011
|
|
|
|
10.14
|
*
|
|
8-K
|
|
10.1
|
|
3/21/2012
|
|
|
|
10.15
|
*
|
|
8-K
|
|
10.2
|
|
3/21/2012
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
||||
Exhibit
|
|
Exhibit Description
|
|
Form
|
|
Exhibit
|
|
Filing Date
|
|
Filed Herewith
|
10.16
|
*
|
|
10-Q
|
|
10.2
|
|
8/16/2012
|
|
|
|
10.17
|
*
|
|
10-Q
|
|
10.3
|
|
8/16/2012
|
|
|
|
10.18
|
*
|
|
10-Q
|
|
10.2
|
|
8/22/2013
|
|
|
|
10.19
|
*
|
|
S-8
|
|
4.0
|
|
10/28/2015
|
|
|
|
10.20
|
*
|
|
8-K
|
|
10.1
|
|
10/15/2012
|
|
|
|
10.21
|
*
|
|
10-K
|
|
10.36
|
|
10/19/2012
|
|
|
|
10.22
|
*
|
|
8-K
|
|
10.1
|
|
3/23/2016
|
|
|
|
10.23
|
*
|
|
10-Q
|
|
10.3
|
|
6/9/2016
|
|
|
|
10.24
|
*
|
|
10-K
|
|
10.54
|
|
3/28/2017
|
|
|
|
10.25
|
*
|
|
10-K
|
|
10.55
|
|
3/28/2017
|
|
|
|
10.26
|
*
|
|
10-Q
|
|
10.1
|
|
8/24/2017
|
|
|
|
10.27
|
*
|
|
10-K
|
|
10.35
|
|
3/16/2018
|
|
|
|
10.28
|
|
|
8-K
|
|
10.1
|
|
4/20/2018
|
|
|
|
10.29
|
*
|
|
10-Q
|
|
10.1
|
|
11/29/2018
|
|
|
|
10.30
|
*
|
|
10-Q
|
|
10.2
|
|
11/29/2018
|
|
|
|
10.31
|
*
|
|
|
|
|
|
|
|
X
|
|
10.32
|
*
|
|
|
|
|
|
|
|
X
|
|
10.33
|
*
|
|
|
|
|
|
|
|
X
|
|
10.34
|
*
|
|
|
|
|
|
|
|
X
|
|
21.1
|
|
|
|
|
|
|
|
|
X
|
|
23.1
|
|
|
|
|
|
|
|
|
X
|
|
31.1
|
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
|
|
|
|
|
|
|
X
|
|
32.1
|
|
|
|
|
|
|
|
|
X
|
|
|
|
DOLLAR TREE, INC.
|
|
|
|
|
DATE:
|
March 27, 2019
|
By:
|
/s/ Gary Philbin
|
|
|
Gary Philbin
|
|
|
|
President and Chief Executive Officer
|
Signature
|
Title
|
Date
|
|
|
|
/s/ Gary Philbin
|
|
|
Gary Philbin
|
Director, President and Chief Executive Officer
|
March 27, 2019
|
|
(principal executive officer)
|
|
|
|
|
/s/ Bob Sasser
|
|
|
Bob Sasser
|
Executive Chairman; Director
|
March 27, 2019
|
|
|
|
/s/ Gregory M. Bridgeford
|
|
|
Gregory M. Bridgeford
|
Lead Independent Director
|
March 27, 2019
|
|
|
|
/s/ Arnold S. Barron
|
|
|
Arnold S. Barron
|
Director
|
March 27, 2019
|
|
|
|
/s/ Thomas W. Dickson
|
|
|
Thomas W. Dickson
|
Director
|
March 27, 2019
|
|
|
|
/s/ Conrad M. Hall
|
|
|
Conrad M. Hall
|
Director
|
March 27, 2019
|
|
|
|
/s/ Lemuel E. Lewis
|
|
|
Lemuel E. Lewis
|
Director
|
March 27, 2019
|
|
|
|
/s/ Kathleen E. Mallas
|
|
|
Kathleen E. Mallas
|
Senior Vice President - Principal Accounting Officer
|
March 27, 2019
|
|
(principal accounting officer)
|
|
|
|
|
/s/ Jeffrey Naylor
|
|
|
Jeffrey Naylor
|
Director
|
March 27, 2019
|
|
|
|
/s/ Thomas A. Saunders III
|
|
|
Thomas A. Saunders III
|
Director
|
March 27, 2019
|
|
|
|
/s/ Stephanie Stahl
|
|
|
Stephanie Stahl
|
Director
|
March 27, 2019
|
|
|
|
/s/ Kevin S. Wampler
|
|
|
Kevin S. Wampler
|
Chief Financial Officer
|
March 27, 2019
|
|
(principal financial officer)
|
|
|
|
|
/s/ Carrie A. Wheeler
|
|
|
Carrie A. Wheeler
|
Director
|
March 27, 2019
|
|
|
|
/s/ Thomas E. Whiddon
|
|
|
Thomas E. Whiddon
|
Director
|
March 27, 2019
|
|
|
|
/s/ Dr. Carl P. Zeithaml
|
|
|
Dr. Carl P. Zeithaml
|
Director
|
March 27, 2019
|
Subsidiary Name
|
|
State or Jurisdiction of Incorporation
|
|
D/B/A
|
Dollar Tree Stores, Inc.
|
|
Virginia
|
|
Dollar Tree
|
Dollar Tree Management, Inc.
|
|
Virginia
|
|
N/A
|
Family Dollar Stores, Inc. (1)
|
|
Delaware
|
|
Family Dollar
|
Family Dollar, Inc. (1)
|
|
North Carolina
|
|
Family Dollar
|
Family Dollar Merchandising, LLC
|
|
Delaware
|
|
N/A
|
Family Dollar Services, LLC
|
|
North Carolina
|
|
N/A
|
Family Dollar Stores of Ohio, Inc. (1)
|
|
Virginia
|
|
Family Dollar
|
Greenbrier International, Inc.
|
|
Delaware
|
|
N/A
|
Dollar Tree Distribution, Inc.
|
|
Virginia
|
|
N/A
|
Dollar Tree Insurance, Inc.
|
|
South Carolina
|
|
N/A
|
Dollar Tree Stores Canada, Inc. (2)
|
|
British Columbia
|
|
Dollar Tree Canada
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Gary Philbin
|
|
Gary Philbin
|
|
President and Chief Executive Officer
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Kevin S. Wampler
|
|
Kevin S. Wampler
|
|
Chief Financial Officer
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
March 27, 2019
|
/s/ Gary Philbin
|
Date
|
Gary Philbin
|
|
President and Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
March 27, 2019
|
/s/ Kevin S. Wampler
|
Date
|
Kevin S. Wampler
|
|
Chief Financial Officer
|