Dollar Tree DLTR · USD

Segments and Disaggregated RevenueAs previously disclosed, effective as of the fourth quarter of fiscal 2024, the Company no longer reports the Family Dollar segment; it now reports its financial performance based on the Dollar Tree segment and corporate, support and other. The Dollar Tree segment is a leading operator of discount variety stores offering merchandise predominantly at the opening price point of $1.25, with additional offerings at higher price points. Dollar Tree stores serve customers with a broad range of income levels principally in suburban locations. The Dollar Tree segment includes our operations under the Dollar Tree and Dollar Tree Canada brands, 16 distribution centers in the United States and two distribution centers in Canada. Corporate, support and other consists primarily of store support center costs and the results of operations for our Summit Pointe property in Chesapeake, Virginia that are considered shared services and therefore these results are excluded from the Dollar Tree segment. Our chief operating decision maker (“CODM”) is our chief executive officer of the enterprise. The CODM evaluates the financial performance of the Dollar Tree segment using segment gross profit and operating income. The CODM reviews these metrics to allocate resources to the segment, primarily in the annual budget and quarterly forecasting process. The CODM considers variances between actual results and internal budgets/forecasts on a monthly basis for both profit measures when making decisions about allocating capital and resources to the segment. The CODM also uses segment gross profit to evaluate our ability to control product and supply chain costs relative to changes in sales between comparable periods. The CODM uses operating income to assess the overall performance for the segment. The CODM is provided asset information on a consolidated basis rather than by segment.The accounting policies of the Dollar Tree segment are the same as those described in Note 2. We may revise the measurement of the Dollar Tree segment’s operating income, as determined by the information regularly reviewed by the CODM. If the measurement of the Dollar Tree segment changes, prior period amounts and balances are reclassified to be comparable to the current period’s presentation.

Commitments and ContingenciesPurchase ObligationsAt January 31, 2026, we have commitments totaling $17.4 million through fiscal 2027 related to ocean shipping contracts and commitments of $242.5 million through fiscal 2034 related to agreements for software licenses and support, telecommunication services and store technology assets and maintenance for our stores. Letters of CreditWe have $85.0 million in trade letters of credit with various financial institutions, under which $2.6 million was committed to these letters of credit issued for routine purchases of imported merchandise at January 31, 2026.Surety BondsWe have issued various surety bonds that primarily serve as collateral for utility payments at our stores and self-insured insurance programs, as well as U.S. customs compliance. These bonds total $247.5 million and are committed through various dates through fiscal 2027.ContingenciesInsurance ClaimsIn the first quarter of fiscal 2024, a tornado destroyed our Dollar Tree distribution center in Marietta, Oklahoma. Based on the significant damage sustained by the facility, the inventory contained in the facility and the facility itself was not salvageable. We incurred losses totaling $117.0 million in the first quarter of fiscal 2024, consisting of $70.0 million related to damaged inventory and $47.0 million related to property and equipment. These losses were fully offset by insurance receivables. Subsequently, we recorded additional insurance receivables of approximately $7.0 million in fiscal 2024 and $5.0 million in fiscal 2025 for other property and equipment-related damage recoveries that are reimbursable under the terms of our insurance policy. In fiscal 2024, we received insurance proceeds totaling $150.0 million, including $100.0 million related to damaged inventory and $50.0 million related to damaged property and equipment and recorded a gain of $30.0 million in the fourth quarter of fiscal 2024 for the excess of the insurance proceeds received over the losses incurred for damaged inventory. In the first quarter of fiscal 2025, we received additional insurance proceeds of $70.0 million, including $50.0 million related to damaged property and equipment and $20.0 million related to damaged inventory. We recorded a gain of approximately $62.0 million for the excess of the insurance proceeds received over the losses incurred for the damaged property and equipment and damaged inventory.

Income Taxes On July 4, 2025, new federal tax legislation was enacted in the U.S. The most significant impacts to the Company of this legislation are the immediate expensing of domestic research and development expenditures and the permanent reinstatement of bonus depreciation for qualifying properties. In connection with the sale of Family Dollar, completed on July 5, 2025, the Company expects to realize cash tax benefits from losses on the sale totaling approximately $445.0 million.Income from continuing operations before income taxes is as follows: Year Ended(in millions)January 31, 2026February 1, 2025February 3, 2024United States$1,621.6 $1,361.0 $1,638.9 Foreign7.9 22.6 23.0 Total$1,629.5 $1,383.6 $1,661.9 The provision for income taxes consists of the following: Year Ended(in millions)January 31, 2026February 1, 2025February 3, 2024Current taxes:Federal$199.8 $238.0 $279.1 State56.5 53.6 61.9 Foreign0.5 0.2 — Total current taxes256.8 291.8 341.0 Deferred taxes:Federal122.4 37.7 38.8 State23.1 5.8 10.4 Foreign1.9 5.8 5.9 Total deferred taxes147.4 49.3 55.1 Provision for income taxes$404.2 $341.1 $396.1 A reconciliation of the statutory U.S. federal income tax rate and the effective tax rate follows: Year Ended(dollars in millions)January 31, 2026February 1, 2025February 3, 2024Statutory U.S. federal income tax rate$342.2 21.0 %$290.6 21.0 %$349.0 21.0 %Domestic Federal:Cross-border tax laws1.6 0.1 1.2 0.1 2.1 0.1 Tax credits:Work Opportunity Tax Credit(17.0)(1.0)(14.5)(1.0)(21.0)(1.3)Nontaxable and nondeductible items8.2 0.5 18.6 1.3 14.2 0.9 Other, net3.8 0.2 (1.6)(0.1)(5.4)(0.4)Domestic state and local income taxes, net of federal income tax benefit (a)66.6 4.1 44.7 3.2 56.2 3.4 Foreign tax effects:Other foreign jurisdictions0.6 — 1.2 0.1 1.0 0.1 Worldwide changes in unrecognized tax benefits(1.8)(0.1)0.9 0.1 — — Effective tax rate$404.2 24.8 %$341.1 24.7 %$396.1 23.8 %(a) During the year ended January 31, 2026, state taxes in California, Florida, Illinois, Michigan, New Jersey, and New York made up greater than 50 percent of the tax effect in this category. During the year ended February 1, 2025, state taxes in California, Florida, Illinois, Michigan, New Jersey, New York, and Virginia made up greater than 50 percent of the tax effect in this category. During the year ended February 3, 2024, state taxes in California, Illinois, Michigan, New Jersey, New York, and Virginia made up greater than 50 percent of the tax effect in this category.

Stock-Based Compensation PlansFixed Stock-Based Compensation PlansThe 2021 Omnibus Incentive Plan (“Omnibus Plan”) permits us to grant up to 6.5 million shares of our common stock to our employees, consultants and directors. The plan permits us to grant equity awards in the form of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards, service-based restricted stock units (“RSUs”), performance bonuses, performance-based restricted stock units (“PSUs”), non-employee director stock options and other equity-related awards.Any restricted stock, RSUs or PSUs awarded are subject to certain general restrictions. The restricted stock shares or units may not be sold, transferred, pledged or disposed of until the restrictions on the shares or units have lapsed or have been removed under the provisions of the Omnibus Plan. In addition, if a holder of restricted shares or units ceases to be employed by us, any shares or units in which the restrictions have not lapsed will be forfeited.Prior to July 1, 2023, the 2013 Director Deferred Compensation Plan permitted our directors to defer all or a portion of fees for Board or Board committee service until a future date, at which time they may be paid in cash or shares of our common stock, or receive all or a portion of such fees in non-statutory stock options. Deferred fees that are paid out in cash will earn interest at the 30-year Treasury Bond Rate. Deferred amounts to be paid in common stock are determined by dividing the deferred fee amount by the closing market price of a share of our common stock on the date of deferral. The number of options issued to a director will equal the deferred fee amount divided by 33% of the price of a share of our common stock. The exercise price will equal the fair market value of our common stock at the date the option is issued. The options are fully vested when issued and have a term of 10 years. The 2013 plan expired on June 30, 2023. All amounts deferred by directors pursuant to the terms of the 2013 plan on or before June 30, 2023 will continue to be administered in accordance with the terms of the 2013 plan and applicable deferral elections.Beginning July 1, 2023, our non-employee directors are permitted to defer all or a part of fees earned for his or her service as a director pursuant to our Non-Employee Director Deferred Compensation Program, which operates in conjunction with, and under the authority of, the Omnibus Plan.

The fair value of these awards incorporating the market condition was estimated on the grant date using a Monte Carlo simulation model with the following weighted average assumptions:Fiscal 2025Fiscal 2024Fiscal 2023Expected term (in years)2.82.82.8Expected stock price volatility42.1 %34.7 %34.5 %Dividend yield— %— %— %Risk-free interest rate3.82 %4.49 %3.82 %The weighted average assumptions used in the Black-Scholes option pricing model for the executive stock options granted in fiscal 2024 and fiscal 2023 are as follows:Fiscal 2024Fiscal 2023Expected term (in years)6.06.0Expected stock price volatility37.1 %36.3 %Dividend yield— %— %Risk-free interest rate4.36 %3.

LeasesOur lease portfolio primarily consists of leases for our retail store locations, vehicles and trailers, as well as distribution center space and equipment.The lease cost for operating leases that was recognized in the accompanying Consolidated Statements of Operations was as follows:Year Ended(in millions)January 31, 2026February 1, 2025February 3, 2024Fixed lease cost$1,131.9 $1,041.6 $948.1 Variable lease cost367.0 328.9 296.0 Short-term lease cost11.1 21.5 15.6 Total lease cost*$1,510.0 $1,392.0 $1,259.7 *Excludes sublease income, which is immaterialThere are no residual value guarantees that exist, and there are no restrictions or covenants imposed by leases.As of January 31, 2026, maturities of lease liabilities were as follows:Fiscal Year(in millions)2026$1,098.9 20271,071.1 2028888.4 2029715.9 2030523.3 Thereafter1,045.2 Total undiscounted lease payments5,342.8 Less interest718.9 Present value of lease liabilities$4,623.9 The future lease payments above exclude $57.4 million of legally binding minimum lease payments for leases signed but not yet commenced as of January 31, 2026.Information regarding the weighted-average remaining lease term and the weighted-average discount rate for operating leases is as follows:January 31, 2026February 1, 2025February 3, 2024Weighted-average remaining lease term (years)5.75.65.4Weighted-average discount rate4.9 %4.6 %4.0 %The following represents supplemental information pertaining to our operating lease arrangements:Year Ended(in millions)January 31, 2026February 1, 2025February 3, 2024Cash paid for amounts included in the measurement of lease liabilities:Operating cash flows from operating leases$1,176.9 $1,047.6 $1,038.6 Right-of-use assets obtained in exchange for new operating lease liabilities$1,207.0 $1,378.5 $1,113.

We understand the importance of cybersecurity in maintaining the confidentiality, integrity, and availability of our systems and data. Our business operations leverage information technology infrastructure and third-party vendors and systems which makes us susceptible to various cyber threats. We have implemented a comprehensive cybersecurity risk management program to mitigate these risks and safeguard our assets.We have measures in place to prevent, detect, and manage material risks from unauthorized access to our electronic information systems. These include various controls, technologies, and processes that protect confidential, proprietary, business and personal information that we collect, process, store, and transmit as part of our business operation.We also consider cybersecurity, along with other business risks, within our enterprise risk management framework. Our assessment, identification and management of cybersecurity and data privacy risks are reported as part of our regular enterprise risk assessments, security audits and risk management programs. In addition, we leverage recognized consulting firms to conduct application security and penetration testing assessments annually. We also require employees with access to information systems, including all corporate employees, to undertake cybersecurity training and compliance programs annually. Our cybersecurity program utilizes the National Institute of Standards and Technology framework along with risk-based analysis and judgment, to choose the most effective security controls to address potential risks. We consider various factors such as likelihood and severity of risk, impact on our organization and others if a risk materializes, feasibility and cost of controls, and the effects of controls on our operations and others.Because we rely on third-party providers and platforms for many of our computer and technology systems and support, we use a variety of processes and tools to address cybersecurity threats related to the use of third-party technology and services, including pre-acquisition diligence, imposition of contractual obligations, and performance monitoring. As a part of our monitoring, we regularly obtain System Organization and Control Reports (SOC Reports) for key third-party systems.As part of our overall strategic initiatives, we have made investments in internal and external resources to support and enhance our technology infrastructure over the next several years.

Subsequent EventsOn February 20, 2026, the U.S. Supreme Court struck down certain tariffs imposed under the International Emergency Economic Powers Act (IEEPA). The ultimate availability, timing, and amount of any potential refunds of such tariffs remain highly uncertain and are subject to further legal, regulatory, and administrative developments. Following the Supreme Court decision, the United States announced a new 10% global tariff under Section 122 of the Trade Act of 1974, subject to certain carveouts, effective February 24, 2026 for a period of 150 days. There remains substantial uncertainty as of the filing date regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on our business. We continue to monitor and evaluate these developments and assess their potential impact on our business, financial condition, and results of operations.