Dollar Tree, Inc. (DLTR): history, ownership, mission, how it works & makes money

A Brief History of Dollar Tree, Inc.

Company Overview

Dollar Tree, Inc. operates more than 16,300 retail discount stores in 48 states and five Canadian provinces. The company primarily offers merchandise at the price point of $1.25, with additional offerings at higher price points. The two main segments of the company are Dollar Tree and Family Dollar, with 15 distribution centers in the United States and two in Canada.

Recent Financial Performance

As of August 3, 2024, Dollar Tree reported the following financial metrics for the 13-week and 26-week periods ended on that date:

Store Count and Operations

As of August 3, 2024, Dollar Tree operated the following store counts:

Recent Strategic Developments

On June 5, 2024, Dollar Tree initiated a formal review of strategic alternatives for the Family Dollar segment, which might include a potential sale or spin-off.

Capital Structure and Shareholder Returns

As of August 3, 2024, Dollar Tree had total long-term borrowings of $3.45 billion, with $1.0 billion maturing in May 2025. The company repurchased 3,283,837 shares of common stock at a cost of $403.6 million during the 26 weeks ended August 3, 2024. The remaining amount under the Board repurchase authorization was $952.4 million.

Insurance Recoveries

Following the tornado that destroyed a distribution center in Marietta, Oklahoma, Dollar Tree incurred losses totaling $117 million, which were fully offset by insurance receivables. By August 3, 2024, the company had received $70.8 million in insurance proceeds.

Liquidity and Cash Flow

For the 26 weeks ended August 3, 2024, Dollar Tree reported net cash provided by operating activities of $1,002.6 million, compared to $923.8 million for the same period last year. Capital expenditures amounted to $972.9 million.

Market Environment

The financial performance of Dollar Tree is influenced by macroeconomic factors such as inflation and consumer purchasing behavior. For the 13 weeks ended August 3, 2024, the company noted a 0.7% increase in comparable store net sales.

A Who Owns Dollar Tree, Inc. (DLTR)

Major Shareholders

As of 2024, the ownership structure of Dollar Tree, Inc. (DLTR) consists of various institutional and individual shareholders. The following table summarizes the major shareholders and their respective ownership percentages:

Stock Performance and Market Capitalization

As of August 3, 2024, Dollar Tree's stock price was approximately $147.50, and the company's market capitalization was around $31.6 billion. The stock has experienced fluctuations over the past year, with a 52-week high of $166.50 and a low of $126.00.

Recent Financial Performance

For the second quarter of 2024, Dollar Tree reported net sales of $7.37 billion, reflecting a 0.7% increase compared to the same period in the previous year. The breakdown of net sales by segment is as follows:

Share Buyback and Shareholder Equity

In the first half of 2024, Dollar Tree repurchased approximately 3.3 million shares at a cost of $400 million. As of August 3, 2024, the company had $952.4 million remaining under its share repurchase authorization of $2.5 billion.

Financial Metrics

The following table summarizes key financial metrics for Dollar Tree as of August 3, 2024:

Conclusion on Ownership Structure

The ownership of Dollar Tree, Inc. is characterized by a significant presence of institutional investors, led by Vanguard Group and BlackRock, alongside a substantial proportion of shares held by individual investors. The company's financial performance has shown resilience, with steady sales growth despite challenges in the Family Dollar segment.

Dollar Tree, Inc. (DLTR) Mission Statement

As of 2024, Dollar Tree, Inc. operates with a mission centered around providing customers with a wide selection of quality products at an exceptional value. The company aims to be the leading operator of discount variety stores, focusing on the $1.25 price point, while also offering additional merchandise at higher price points. This strategy is designed to attract a diverse customer base looking for affordability without compromising on quality.

Company Overview

Dollar Tree, Inc. operates more than 16,300 retail discount stores across the United States and Canada, under the Dollar Tree and Family Dollar brands. The company's operations are structured into two reporting business segments: Dollar Tree and Family Dollar.

Recent Financial Performance

For the 13 weeks ended August 3, 2024, Dollar Tree reported net sales of $7,372.7 million, a slight increase of 0.7% compared to $7,320.1 million for the same period in 2023. The gross profit for this period was $2,214.5 million, resulting in a gross profit margin of 30.0%, an increase of 80 basis points year-over-year.

Store Count and Expansion

As of August 3, 2024, Dollar Tree operated a total of 16,388 stores, which includes 8,627 Dollar Tree stores and 7,761 Family Dollar stores. The company has continued to expand its footprint, opening 312 new stores during the first half of fiscal 2024.

Strategic Initiatives

In 2024, Dollar Tree continues to implement strategic initiatives aimed at enhancing customer experience and operational efficiency. This includes expanding their multi-price product assortment, which has been rolled out in approximately 1,600 stores. Additionally, the company has acquired designation rights for up to 170 leases of 99 Cents Only Stores, further expanding its market presence.

Operational Challenges

Despite the growth in net sales, Dollar Tree faces challenges such as increased selling, general, and administrative expenses, which rose to 27.3% of total revenues. The company reported an operating income margin of 2.8% for the 13 weeks ended August 3, 2024, a decline from 3.9% in the prior year.

Conclusion on Mission Statement Alignment

Dollar Tree's mission to provide quality products at low prices is reflected in its operational strategies and financial performance. The company’s commitment to expanding its product offerings and store count aligns with its core mission of affordability and accessibility for its customers.

How Dollar Tree, Inc. (DLTR) Works

Company Overview

Dollar Tree, Inc. operates more than 16,300 retail discount stores across 48 states and five Canadian provinces. The company functions through two primary segments: Dollar Tree and Family Dollar.

Financial Performance

As of August 3, 2024, Dollar Tree reported consolidated net sales of $7,372.7 million for the 13 weeks ended, reflecting a 0.7% increase year-over-year. For the 26 weeks ended August 3, 2024, net sales were $14,999.1 million, up 2.5% from the previous year.

Segment Performance

The Dollar Tree segment reported net sales of $4,065.5 million for the 13 weeks ended August 3, 2024, a 5.0% increase compared to the same period last year. The Family Dollar segment, however, experienced a decline, with net sales of $3,307.2 million, down 4.0% year-over-year.

Gross Profit and Margins

For the 13 weeks ended August 3, 2024, the gross profit margin was 30.0%, up 80 basis points from the previous year. The Dollar Tree segment achieved a gross profit margin of 34.2%, while Family Dollar's margin improved to 24.9%.

Operating Income and Expenses

Operating income for the Dollar Tree segment was $342.0 million for the 13 weeks ended August 3, 2024, down 14.0% year-over-year. Family Dollar reported an operating loss of $14.6 million during the same period.

Net Income and Earnings Per Share

For the 13 weeks ended August 3, 2024, the diluted net income per share was $0.62, down from $0.91 in the same quarter last year. The effective tax rate remained at 24.0% for this period.

Store Count and Expansion

As of August 3, 2024, Dollar Tree operated 8,627 stores in the Dollar Tree segment and 7,761 stores in the Family Dollar segment, reflecting changes due to store openings and closures.

Shareholder Equity

As of August 3, 2024, total shareholders' equity amounted to $7,379.5 million, reflecting a slight increase from the previous fiscal period.

How Dollar Tree, Inc. (DLTR) Makes Money

Revenue Streams

Dollar Tree, Inc. generates revenue primarily through the sale of merchandise across its two main segments: Dollar Tree and Family Dollar. As of August 3, 2024, the company reported consolidated net sales of $7,372.7 million for the 13 weeks ended, representing a 0.7% increase compared to the same period in the previous year. For the 26 weeks ended, net sales were $14,999.1 million, a 2.5% increase year-over-year.

Cost Structure

The cost of sales for Dollar Tree decreased to 65.8% for the 13 weeks ended August 3, 2024, down from 66.6% in the prior year. This reduction is attributed to lower freight costs, although it was partially offset by increased sales of higher-cost consumable merchandise and higher occupancy costs.

The Family Dollar segment saw a cost of sales rate of 75.1% for the same period, slightly improved from 75.6% a year earlier due to lower freight and occupancy costs resulting from store closures.

Operating Income

Operating income for the consolidated entity was $203.1 million for the 13 weeks ended August 3, 2024, down from $287.8 million year-over-year. The operating income margin decreased to 2.8% from 3.9%. For the 26-week period, operating income was $623.7 million, down from $707.5 million, with a margin of 4.2% compared to 4.8%.

Net Income

Net income for the company was reported at $132.4 million for the 13 weeks ended August 3, 2024, translating to $0.62 per diluted share, compared to $200.4 million or $0.91 per diluted share in the prior year. For the 26 weeks, net income was $432.5 million, down from $499.4 million.

Store Operations and Expansion

As of August 3, 2024, Dollar Tree operated over 16,300 retail stores in 48 states and five Canadian provinces. The Dollar Tree segment had 8,627 stores, while Family Dollar had 7,761 stores. The company opened 312 new stores during the 26 weeks, including 243 Dollar Tree stores and 69 Family Dollar stores.

Strategic Initiatives

The company has been expanding its multi-price offerings to enhance customer appeal and increase traffic. As of August 3, 2024, approximately 1,600 stores had expanded their multi-price assortment, which now includes items priced at $3, $4, and $5. Additionally, Dollar Tree acquired designation rights for up to 170 leases of 99 Cents Only Stores in key markets, with plans to open these stores under the Dollar Tree brand.