Dollar Tree Inc Stock

Dollar Tree, Inc. operates as a leading operator of discount variety stores. The company’s stores operate under the brand names of Dollar Tree, Family Dollar and Dollar Tree Canada. As of January 28, 2023, the company operated discount variety retail stores across 48 states and five Canadian provinces and over the long-term, that the market can support more than 10,000 Dollar Tree stores and 15,000 Family Dollar stores across the United States, and approximately 1,000 Dollar Tree stores in Canada.

Segments

The company operates through two business segments, Dollar Tree and Family Dollar.

The Dollar Tree segment is the leading operator of discount variety stores offering merchandise predominantly. The Dollar Tree segment includes the company’s operations under the Dollar Tree and Dollar Tree Canada brands, 15 distribution centers in the United States and two distribution centers in Canada.

The Family Dollar segment operates a chain of general merchandise retail discount stores providing consumers with a selection of competitively-priced merchandise in convenient neighborhood stores. The Family Dollar segment consists of the company’s operations under the Family Dollar brand and ten distribution centers.

The company executes a dual-banner strategy that aims to offer the best of its brands in various store formats to serve customers in all types of geographic markets. Dollar Tree is the leading operator of discount variety stores offering merchandise predominantly. Dollar Tree stores serve customers with a broad range of income levels in suburban locations, striving continuously to Wow the customer with a compelling, fun and fresh merchandise assortment consisted of a variety of the things the customer wants and needs, all at incredible values in bright, clean and friendly stores. Family Dollar operates general merchandise retail discount stores providing customers with a selection of competitively-priced merchandise in convenient neighborhood stores. Family Dollar primarily serves a lower than average income customer in urban and rural locations, offering great values on everyday items.

The company is committed to growing its combined business through new store openings and through its store relocation, expansion and remodel program. The company plans to open new stores in underserved markets and to strategically increase its presence in its existing markets. The company is executing its strategic initiatives, including Dollar Tree Plus and the Family Dollar H2 and Combination Store (or Combo Store) format initiatives. The company focuses on refining its assortment in every store by 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.

Dollar Tree

The Dollar Tree segment includes stores operating under the Dollar Tree and Dollar Tree Canada brands, 15 distribution centers in the United States and two in Canada. The company’s stores predominantly range from 8,000 - 10,000 selling square feet.

During 2021, the company entered into a partnership with Instacart and as of January 28, 2023, its customers can shop online and receive same-day delivery from more than 7,800 Dollar Tree stores without having to visit a store. The company is the owners of several trademarks, including Dollar Tree and the Dollar Tree logo.

In its Dollar Tree Canada stores, the company sells items principally for $1.50(CAD) or less.

The company carries approximately 8,000 items in its Dollar Tree stores and as of the end of fiscal 2022 approximately 25% of its items were automatically replenished. The remaining items are pushed to the stores and a portion can be reordered by the company’s store managers on a weekly basis. Through automatic replenishment and the company’s store managers’ ability to order product, each store manager is able to satisfy the demands of their particular customer base.

The company maintains a balanced selection of products within traditional variety store categories. The company offers a wide selection of everyday basic products and it supplements these basic, everyday items with seasonal, closeout and promotional merchandise. The company attempts to keep certain basic consumable merchandise in its stores continuously to establish its stores as a destination and increase traffic in its stores.

The merchandise mix in the company’s Dollar Tree stores consists of:

consumable merchandise, which includes everyday consumables such as household paper and chemicals, food, candy, health and personal care products, and in most stores, frozen and refrigerated food;

variety merchandise, which includes toys, durable housewares, gifts, stationery, party goods, greeting cards, softlines, arts and crafts supplies and other items; and

seasonal goods, which include, among others, Christmas, Easter, Halloween and Valentine’s Day merchandise.

Family Dollar

In its Family Dollar stores, the company sells merchandise at prices that generally range from $1.00 to $10.00. The company’s stores predominantly range from 6,000 - 8,000 selling square feet. The Family Dollar segment consists of the company’s store operations under the Family Dollar brand and ten distribution centers. The company has two primary initiatives for its Family Dollar stores, the H2 format and its Combo Store format, both of which incorporate elements of its Dollar Tree stores into Family Dollar stores. The H2 model stores include Dollar Tree $1.25 merchandise items and establish a minimum number of freezer and cooler doors throughout the store. The Combo Store format, which was designed specifically for small towns and rural communities with populations of 3,000 to 4,000 residents, blends Family Dollar’s great value and assortment with select Dollar Tree merchandise categories under one roof. The company’s new and renovated H2 and Combo Stores have higher sales and operating income margins compared with legacy Family Dollar stores. During 2021, the company entered into a partnership with Instacart and as of January 28, 2023, the company’s customers can shop online and receive same-day delivery from more than 7,500 Family Dollar stores without having to visit a store. The company is the owner of the trademarks Family Dollar, Family Dollar Stores and other names and designs of certain merchandise sold in Family Dollar stores.

The company’s Family Dollar stores provide customers with a quality, high-value assortment of basic necessities and seasonal merchandise. The company offers competitively-priced national brands from leading manufacturers alongside name brand equivalent-value, lower-priced private labels. The company purchases merchandise from a wide base of suppliers and generally have not experienced difficulty in obtaining adequate quantities of merchandise. In fiscal 2022, the company purchased approximately 15% of its merchandise through its relationship with McLane Company, Inc., which distributes consumable merchandise from multiple manufacturers. In addition, merchandise imported directly typically accounts for approximately 15%-17% of the company’s total retail value purchases.

While the number of items in a given store can vary based on the store’s size, geographic location, merchandising initiatives and other factors, the company’s typical Family Dollar store generally carries approximately 7,600 basic items alongside items that are ever-changing and seasonally-relevant throughout the year.

The merchandise mix in the company’s Family Dollar stores consists of consumable merchandise, which includes food and beverages, tobacco, health and personal care products, household chemicals, paper products, hardware and automotive supplies, diapers, batteries, and pet food and supplies; home products, which include housewares, home décor, giftware, and domestics, including comforters, sheets and towels; apparel and accessories merchandise, which includes clothing, fashion accessories and shoes; and seasonal and electronics merchandise, which includes Christmas, Easter, Halloween and Valentine’s Day merchandise, personal electronics, including pre-paid cellular phones and services, stationery and school supplies, and toys.

Distribution

A strong and efficient distribution network is critical to the company’s ability to grow and to maintain an operating structure. The company operates distribution centers in the United States, 15 of which are primarily dedicated to serving its Dollar Tree stores and distribution centers primarily serve its Family Dollar stores.

The company’s Dollar Tree stores receive approximately 92% of their inventory from its distribution centers via contract carriers and its Family Dollar stores receive approximately 70% of their inventory from its distribution centers. The remaining store inventory, primarily perishable consumable items and other vendor-maintained display items, are delivered directly to the company’s stores from vendors or third party distributors. The company’s Family Dollar stores receive approximately 15% of their merchandise from McLane Company, Inc.

History

Dollar Tree, Inc. was founded in 2012. The company was incorporated in 2008.