filings.toolsItem 6. Selected Financial Data
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Item 6. Selected Financial Data
The following table presents a summary of our selected financial data for the fiscal years ended February 1, 2020, February 2, 2019, February 3, 2018, January 28, 2017, and January 30, 2016. Fiscal 2017 included 53 weeks, commensurate with the retail calendar, while all other fiscal years reported in the table contain 52 weeks. The selected statement of operations and balance sheet data have been derived from our consolidated financial statements that have been audited by our independent registered public accounting firm. This information should be read in conjunction with the consolidated financial statements and related notes, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial information found elsewhere in this report.
As a result of the acquisition of Family Dollar on July 6, 2015, the statement of operations data below for the year ended January 30, 2016 includes the results of operations of Family Dollar since that date.
Our net sales are derived from the sale of merchandise. Two major factors tend to affect our net sales trends. First is our success at opening new stores or adding new stores through mergers or acquisitions. Second is the performance of stores once they are open. Sales vary at our existing stores from one year to the next. We refer to this as a change in comparable store net sales, because we include only those stores that are open throughout both of the periods being compared, beginning after the first fifteen months of operation. We include sales from stores expanded or remodeled during the year in the calculation of comparable store net sales, which has the effect of increasing our comparable store net sales. The term ‘expanded’ also includes stores that are relocated. Stores that have been re-bannered are considered to be new stores and are not included in the calculation of the comparable store net sales change until after the first fifteen months of operation under the new brand. We report our comparable store net sales on a constant currency basis. Constant currency basis refers to the calculation excluding the impact of currency exchange rate fluctuations. We calculated the constant currency basis increase by translating the current year’s comparable store net sales in Canada using the prior year’s currency exchange rates. We believe that the constant currency basis provides a more accurate measure of comparable store net sales performance.
Both our Dollar Tree stores and our acquired Family Dollar stores are included in the comparable store net sales calculation for the years ended February 3, 2018 and forward. For all prior years, only our Dollar Tree stores are included in the comparable store net sales calculation.
Net sales per selling square foot is calculated based on total net sales for the reporting period divided by the average selling square footage during the period. Selling square footage excludes the storage, receiving and office space that generally occupies approximately 19% of the total square footage of our stores. We believe that net sales per selling square foot more accurately depicts the productivity and operating performance of our stores as it isolates that portion of our footprint that is dedicated to selling merchandise. Net sales per store and net sales per selling square foot are calculated for stores open throughout the period presented.
In the fourth quarter of 2019 and 2018, we recorded non-cash pre-tax and after-tax goodwill impairment charges related to our Family Dollar reporting unit of $313.0 million and $2.73 billion, respectively. These impairment charges are reflected in “Selling, general and administrative expenses” in the accompanying consolidated statements of operations for the years ended February 1, 2020 and February 2, 2019. As a result of these goodwill impairment charges, diluted earnings per share decreased by $1.31 and $11.46 per share for the years ended February 1, 2020 and February 2, 2019, respectively. For additional information regarding the impairment of the Family Dollar goodwill, refer to Note 3 to our consolidated financial statements.
As a result of the enactment of the Tax Cuts and Jobs Act (“TCJA”) in 2017, net income and diluted net income per share for the year ended February 3, 2018 increased by $583.7 million and $2.45 per share, respectively.
Amounts in the following tables are in millions, except per share data, number of stores data, net sales per selling square foot data and inventory turns.
| Year Ended | |||||||||||||||||||
| February 1, 2020 | February 2, 2019 | February 3, 2018 | January 28, 2017 | January 30, 2016 | |||||||||||||||
| Statement of Operations Data: | |||||||||||||||||||
| Net sales | $ | 23,610.8 | $ | 22,823.3 | $ | 22,245.5 | $ | 20,719.2 | $ | 15,498.4 | |||||||||
| Gross profit | 7,040.7 | 6,947.5 | 7,021.9 | 6,394.7 | 4,656.7 | ||||||||||||||
| Selling, general and administrative expenses | 5,778.5 | 7,887.0 | 5,022.8 | 4,689.9 | 3,607.0 | ||||||||||||||
| Operating income (loss) | 1,262.2 | (939.5 | ) | 1,999.1 | 1,704.8 | 1,049.7 |
| Year Ended | |||||||||||||||||||
| February 1, 2020 | February 2, 2019 | February 3, 2018 | January 28, 2017 | January 30, 2016 | |||||||||||||||
| Net income (loss) | 827.0 | (1,590.8 | ) | 1,714.3 | 896.2 | 282.4 | |||||||||||||
| Margin Data (as a percentage of net sales): | |||||||||||||||||||
| Gross profit | 29.8 | % | 30.4 | % | 31.6 | % | 30.8 | % | 30.1 | % | |||||||||
| Selling, general and administrative expenses | 24.5 | % | 34.5 | % | 22.6 | % | 22.6 | % | 23.3 | % | |||||||||
| Operating income (loss) | 5.3 | % | (4.1 | )% | 9.0 | % | 8.2 | % | 6.8 | % | |||||||||
| Net income (loss) | 3.5 | % | (7.0 | )% | 7.7 | % | 4.3 | % | 1.8 | % | |||||||||
| Per Share Data: | |||||||||||||||||||
| Diluted net income (loss) per share(1) | $ | 3.47 | $ | (6.69 | ) | $ | 7.21 | $ | 3.78 | $ | 1.26 | ||||||||
| Diluted net income (loss) per share increase (decrease) | 151.9 | % | (192.8 | )% | 90.7 | % | 200.0 | % | (56.6 | )% |
| As of | |||||||||||||||||||
| February 1, 2020 | February 2, 2019 | February 3, 2018 | January 28, 2017 | January 30, 2016 | |||||||||||||||
| Balance Sheet Data: | |||||||||||||||||||
| Cash and cash equivalents and short-term investments | $ | 539.2 | $ | 422.1 | $ | 1,097.8 | $ | 870.4 | $ | 740.1 | |||||||||
| Working capital | 722.9 | 2,197.6 | 1,717.2 | 1,832.1 | 1,840.5 | ||||||||||||||
| Total assets | 19,574.6 | 13,501.2 | 16,332.8 | 15,701.6 | 15,901.2 | ||||||||||||||
| Total debt | 3,800.0 | 4,300.0 | 5,732.7 | 6,391.8 | 7,465.5 | ||||||||||||||
| Total operating lease liabilities | 6,258.8 | — | — | — | — | ||||||||||||||
| Shareholders’ equity | 6,254.8 | 5,642.9 | 7,182.3 | 5,389.5 | 4,406.9 |
| Year Ended | |||||||||||||||||||
| February 1, 2020 | February 2, 2019 | February 3, 2018 | January 28, 2017 | January 30, 2016 | |||||||||||||||
| Selected Operating Data: | |||||||||||||||||||
| Number of stores open at end of period | 15,288 | 15,237 | 14,835 | 14,334 | 13,851 | ||||||||||||||
| Dollar Tree | 7,505 | 7,001 | 6,650 | 6,360 | 5,954 | ||||||||||||||
| Family Dollar | 7,783 | 8,236 | 8,185 | 7,974 | 7,897 | ||||||||||||||
| Gross square footage at end of period | 149.8 | 148.3 | 143.9 | 138.8 | 132.1 | ||||||||||||||
| Dollar Tree | 80.6 | 75.4 | 71.6 | 68.5 | 64.2 | ||||||||||||||
| Family Dollar | 69.2 | 72.9 | 72.3 | 70.3 | 67.9 | ||||||||||||||
| Selling square footage at end of period | 121.3 | 120.1 | 116.6 | 112.4 | 108.4 | ||||||||||||||
| Dollar Tree | 64.6 | 60.3 | 57.3 | 54.7 | 51.3 | ||||||||||||||
| Family Dollar | 56.7 | 59.8 | 59.3 | 57.7 | 57.1 | ||||||||||||||
| Selling square footage annual growth(3) | 1.0 | % | 3.0 | % | 3.7 | % | 3.7 | % | 10.3 | % | |||||||||
| Net sales annual growth(2) | 3.5 | % | 2.6 | % | 7.4 | % | 8.6 | % | 8.5 | % | |||||||||
| Comparable store net sales increase(2) | 1.8 | % | 1.7 | % | 1.9 | % | 1.8 | % | 2.1 | % | |||||||||
| Net sales per selling square foot(3) | $ | 196 | $ | 193 | $ | 194 | $ | 188 | $ | 191 | |||||||||
| Net sales per store(3) | $ | 1.5 | $ | 1.5 | $ | 1.5 | $ | 1.5 | $ | 1.6 | |||||||||
| Selected Financial Ratios: | |||||||||||||||||||
| Return on assets(3) | 5.0 | % | (10.7 | )% | 10.7 | % | 5.7 | % | 11.4 | % | |||||||||
| Return on equity(3) | 13.9 | % | (24.8 | )% | 27.3 | % | 18.3 | % | 31.5 | % | |||||||||
| Inventory turns(3) | 4.0 | 4.1 | 4.4 | 4.1 | 4.5 |
(1) Diluted net income (loss) per share for the year ended February 2, 2019 has been revised to reflect the immaterial correction of an error.
(2) Family Dollar was included in the determination of these items for the years ended February 3, 2018 and forward
(3) Family Dollar was included in the determination of these items for the years ended January 28, 2017 and forward
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