Dollar Tree (DLTR) 10-K risk factor changes: FY2020 vs FY2019

[removed: Any of the following] [added: Additional] risks [removed: may materialize,] and [removed: additional risks] [added: uncertainties] not [added: presently] known to [removed: us,] [added: us] or that we [removed: now deem immaterial,] [added: currently believe to be immaterial] may [added: also] arise.

Future increases in costs such as wage and benefit costs, [added: ocean shipping rates, domestic freight costs, fuel and energy costs,] the cost of merchandise, [removed: duties,] [added: duties and tariffs,] merchandise loss (due to theft, damage, or [removed: errors), shipping rates, freight costs, fuel costs] [added: errors)] and store occupancy costs would reduce our profitability.

Although Family Dollar, unlike Dollar Tree, can raise the price of merchandise, customers [removed: would] [added: may] buy fewer products if prices were to increase.

Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sECC5FBBCFE885062B5C7A9DC7D174C4B)”] [added: Operations](#i34150ea8cda34020a5183785f78b37f0_43)”] for further discussion of the effect of economic factors on our operations.

We [removed: could] [added: may] continue to encounter higher costs and disruptions in our distribution network.

Our success is dependent on our ability to [added: import or] transport merchandise to our distribution centers and then [added: truck merchandise] to our stores in a timely and cost-effective manner.

We [removed: also] rely heavily on third parties including ocean shippers and truckers in that process.

Additionally, when a shipping or trucking line fails to deliver on its commitments or our distribution centers fail to operate effectively, we could experience [added: increased freight costs or] merchandise shortages that could lead to lost [removed: sales or increased costs.][added: sales.]

Some of the factors that could have an adverse effect on our distribution network or costs in [removed: 2020] [added: 2021] are:

[removed: | • | *Efficient operations and management*.] Distribution centers and other aspects of our distribution network are difficult to operate efficiently, and we have and could experience a reduction in operating efficiency as a result of high turnover and challenges in maintaining a stable [removed: workforce. We are in] [added: workforce, especially if] the [removed: process of enhancing our distribution and logistics management to cope with our challenges, but have not completed that process. |][added: COVID-19 crisis continues.]

[removed: | • | *Diesel fuel costs*.] We have experienced volatility in diesel fuel costs over the past few [removed: years. |][added: years and are expecting increases this year.]

[removed: | • | *Trucking costs*.] We have [removed: recently] experienced significant increases in trucking costs [added: in recent years] due to the truck driver shortage and other [removed: factors in 2018, which abated in the fourth quarter of 2019; however, not to the extent anticipated,] [added: factors,] and our [removed: future] trucking costs [removed: could be higher than we anticipate. |][added: are expected to increase in the future.]

[removed: | • | *Vulnerability to natural or man-made disasters*.] A fire, explosion or natural disaster at a port or any of our distribution facilities could result in a loss of merchandise and impair our ability to adequately stock our stores. [removed: Some facilities are vulnerable to earthquakes, hurricanes or tornadoes. |]

[removed: | • | *Labor disagreement*.] Labor disagreements, disruptions or strikes, for example at ports, may result in delays in the delivery of merchandise to our distribution centers or stores and increase costs. [removed: |]

[removed: | • | *McLane Company, Inc*.] In fiscal [removed: 2019,] [added: 2020,] we purchased and delivered approximately [removed: 14%] [added: 13%] of our merchandise for our Family Dollar segment through our relationship with McLane Company, Inc., which distributes consumable merchandise from multiple manufacturers. [removed: A disruption in our relationship with McLane Company, Inc. could have a significant near-term impact on our operations. |]

Risks associated with our domestic and foreign suppliers, including tariffs or restrictions on trade or disruptions arising from the [removed: outbreak of the recent coronavirus,] [added: COVID-19 pandemic,] could adversely affect our financial performance.

Merchandise imported directly accounts for approximately [removed: 40%] [added: 38%] to [removed: 42%] [added: 40%] of our Dollar Tree segment’s total retail value purchases and [removed: 16%] [added: 15%] to [removed: 18%] [added: 17%] of our Family Dollar segment’s total retail value purchases.

[added: Among our foreign suppliers,] China is the source of a substantial majority of our imports.

[removed: | • |] [added: -] raw material shortages, work stoppages, government travel restrictions, strikes and political unrest, including any impact on vendors or shipping arising from epidemics and related travel restrictions, such as the recent [removed: coronavirus] COVID-19 pandemic; [removed: |]

[removed: | • |] [added: -] economic crises and international disputes or conflicts; [removed: |]

[removed: | • |] [added: -] changes in currency exchange rates or policies and local economic conditions, including inflation (including energy prices and raw material costs) in the country of origin; [removed: |]

[removed: | • |] [added: -] potential changes to, or withdrawal of the United States from, international trade agreements or the failure of the United States to maintain normal trade relations with China and other countries; [removed: |]

[removed: | • |] [added: -] changes in leadership and the political climate in countries from which we import products and their relations with the United States; and [removed: |]

[removed: | • |] [added: -] failure of manufacturers outside the United States to meet food, drug and cosmetic safety and labeling requirements [added: or environmental standards] set by government [removed: regulators. |][added: regulators or consumer expectations.]

Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sECC5FBBCFE885062B5C7A9DC7D174C4B)”] [added: Operations](#i34150ea8cda34020a5183785f78b37f0_43)”] for further discussion of the effect of foreign suppliers on our operations.

Various factors, including the [added: ongoing pandemic,] integration of our segments, constraints on overall labor availability, wage rates, regulatory or legislative impacts, and benefit costs could impact our ability to attract and retain qualified associates at our stores, distribution centers and corporate offices.

We believe improving sales at Family Dollar depends in significant part on the success of the H2 renovations [removed: which accelerated in 2019.][added: and other new store concepts.]

Easter was observed on April [removed: 21, 2019] [added: 12, 2020] and will be observed on April [removed: 12, 2020.][added: 4, 2021.]

Obtaining an increasing number of profitable stores is an [removed: ever increasing] [added: ever-increasing] challenge.

[added: We may not manage] our expansion effectively, and our failure to achieve our expansion plans could materially and adversely affect our business, financial condition and results of operations.

Our supply of goods, including imported goods, could be negatively impacted by the [removed: coronavirus COVID-19.][added: COVID-19 pandemic.]

We are continuing to [removed: implement] [added: refine] our [removed: everyday low price] [added: pricing] strategy at Family Dollar to drive customer loyalty and have a strategic pricing team to improve our value and to increase profitability.

Our ability to effectively manage our business and coordinate the distribution and sale of our merchandise depends significantly on the [removed: reliability,] [added: confidentiality,] integrity and [removed: capacity] [added: availability] of these systems and on our ability to successfully integrate the Dollar Tree and Family Dollar systems.

This may be as the result of deliberate breach in the security of these systems or platforms by bad actors, including through [removed: computer viruses,] [added: malicious software,] ransomware and other cyber-attacks.

In addition, remediation of any problems with our systems could [added: take an extensive amount of time and could] result in significant, unplanned expenses.

Many of our information technology systems, such as those we use for our point-of-sale, web and mobile platforms, including online and mobile payment systems, and for administrative functions, including human resources, payroll, accounting, and internal and external communications, contain personal, financial or other [added: confidential] information that is entrusted to us by our customers and [removed: associates.][added: associates as well as proprietary and other confidential information related to our business and suppliers.]

We have procedures and technology in place to safeguard our customers’ [added: personal information (including] debit and credit card [removed: information,] [added: information),] our associates’ private data, suppliers’ data, and our business records and intellectual property and other sensitive information.

Despite these measures, we have experienced attempted and [removed: on-going] [added: ongoing] cyber-attacks, which are rapidly evolving.

We [added: and/or our third party suppliers] may be vulnerable to, and unable to anticipate, detect and appropriately respond to such cyber-security attacks, including data security breaches and data loss.

Moreover, significant capital investments and other expenditures could also be required to remedy cyber-security problems and prevent future security breaches, including costs associated with additional security technologies, personnel, experts and services [removed: (e.g.] [added: (e.g.,] credit-monitoring services) for those whose data has been breached.

However, the risks and uncertainties that we face are not limited to those described below and those set forth in our SEC filings.

Profitability and Operational Risks

Without respect to COVID-19-related premium pay, we expect material increases in wage rates and labor costs as well as in shipping rates, freight and fuel costs in 2021.

Certain states and localities have passed laws to increase the minimum wage beginning in 2021 and are considering “hero pay”, i.e., laws that would require increasing the pay of certain associates if we remain open when certain pandemic restrictions are implemented.

In addition, the U.S. Congress is considering whether to pass national minimum wage increases in 2021, and the current administration may consider raising the minimum salary for store managers who have exempt status under the Fair Labor Standards Act.

Separately, government or industry actions addressing the impact of climate change may result in increases in merchandise or operating costs.

If the COVID-19 pandemic worsens or continues longer than expected, there could be a material adverse impact on our business and results of operations.

In March 2020, the World Health Organization declared a pandemic arising from a novel strain of coronavirus and its related disease, known as COVID-19.

Nations and governments at every level responded with significant actions to attempt to mitigate the public health crisis and the impact of the pandemic on the economy.

The continuing COVID-19 pandemic and related public health measures have caused economic disruptions that have adversely affected, and are expected to continue to adversely affect, elements of our business.

We have, however, been classified as an essential business and been allowed to remain open but our operational costs have increased significantly because of COVID-19.

To date, sales at Family Dollar have increased during the pandemic.

However, sales at Dollar Tree have been adversely affected, especially in our party departments and for Easter in 2020 and, as a result of fewer customer trips, in certain consumable departments such as snacks and candy.

There continues to be uncertainty and unpredictability about the impact of the COVID-19 pandemic on our financial and operating results in future periods.

If the pandemic worsens or continues longer than expected, governments may reinstate or extend business or personal restrictions, and we could be forced to curtail or restrict operations or incur additional costs.

Certain states and localities are considering laws that would require increasing the pay of store associates if we remain open when certain COVID-19 restrictions are implemented.

We might also experience new disruptions in our supply chain and sources of supply, suffer facility closures or encounter difficulties in hiring or retaining the workforce required for our business.

These circumstances, if applicable for an extended duration or across significant parts of our operating footprint, could have a material adverse effect on our business and results of operations.

The COVID-19 pandemic and public health measures have already contributed to, among other things:

- Increases in the cost of operating our stores and distribution centers, including temporarily higher wages and bonuses paid to associates, enhanced cleaning protocols and the cost of personal protection equipment.

- Disruptions in the patterns of consumer demand, which has led to, among other things, decreased demand for party merchandise and, during 2020, Easter merchandise in the Dollar Tree segment, an increase in consumer demand for household cleaning and other essential supplies and corresponding difficulty in our ability to maintain those items in stock,

fluctuations in demand for discretionary products, and an increase in demand for online sales (which is an insignificant part of our business) and home (which we recently began providing in the Family Dollar segment) or curbside deliveries (which we do not offer).

- Decreasing foot traffic in our stores as a result of the promotion of social distancing, the adoption of various governmental restrictions on personal and business activities and changing consumer attitudes with respect to in-person shopping and changes in shopping patterns.

Reduced consumer demand for holiday, seasonal, party, and other discretionary products that generally carry a higher margin may have a negative impact on our gross profit margin, especially in the later part of the year when they typically form a larger part of our merchandise mix.

It is uncertain what effect the COVID-19 pandemic will have on holiday merchandise sales in the future.

Also, other sales have decreased in the past, and may decrease in the future when COVID-19 infection rates spike.

Our business and results of operations could be materially harmed if we experience a decline in consumer confidence and spending as a result of continued unfavorable economic conditions, for example because government assistance to households and businesses terminate or are reduced.

Governmental authorities have adopted substantial measures, including fiscal and monetary stimulus, to provide economic assistance to individual households and businesses and support economic stability during the COVID-19 pandemic and the related recession and increase in unemployment.

We believe the economic intervention that occurred in fiscal 2020 benefited our sales.

While the enactment of the American Rescue Plan Act of 2021 on March 11, 2021 is expected to provide additional economic assistance to individual households and businesses, there can be no assurance that current or future governmental efforts to support the economy during the pandemic will be sufficient to mitigate the negative effect of the pandemic on the economy.

If consumer spending on the goods we sell declines as a result, there could be a material adverse impact on our business and results of operations.

We are unable to predict the full extent to which the COVID-19 pandemic will affect the economy and our customers, associates, suppliers, vendors, other business partners or our business, results of operations and financial condition.

If the economic consequences of the pandemic are prolonged and/or worsen, it could amplify many of the other risks described in this Form 10-K.

We are experiencing ocean shipping disruptions, trucking shortages, increased ocean shipping rates and increased trucking and fuel costs.

- *Shipping disruptions*.

There is currently a shortage of shipping containers in China and other parts of Asia, and as a result we are experiencing significant delays in importing our goods.

We are also experiencing issues with port congestion.

Our shipping schedules and shipping capacity may be further disrupted or delayed as a result of these or other factors.

Although these delays have not yet impacted our sales and we believe we are adequately stocked with merchandise for Easter, the delays could potentially have a material adverse impact on our sales after Easter, especially at Dollar Tree, if the delays do not improve.

The global COVID-19 pandemic is also expected to continue to present a risk to trans-Pacific shipping in 2021 and may affect shipping from China, where we buy a significant portion of our merchandise.

Wage rates and labor costs are expected to increase in 2020.

The minimum wage has increased in certain states and local jurisdictions and is scheduled to increase further in 2020.

The coronavirus pandemic is an emerging serious threat to health and economic wellbeing affecting our customers, our associates and our sources of supply.

On March 11, 2020, the World Health Organization announced that infections of the coronavirus COVID-19 had become pandemic, and on March 13, the U.S. President announced a National Emergency relating to the disease.

There is a possibility of widespread infection in the United States and abroad, with the potential for catastrophic impact.

National, state and local authorities have recommended social distancing and imposed or are considering quarantine and isolation measures on large portions of the population, including mandatory business closures.

These measures, while intended to protect human life, are expected to have serious adverse impacts on domestic and foreign economies of uncertain severity and duration.

The effectiveness of economic stabilization efforts, including proposed government payments to affected citizens and industries, is uncertain.

Some economists are predicting the United States will soon enter a recession.

The sweeping nature of the COVID-19 pandemic makes it extremely difficult to predict how the company’s business and operations will be affected in the longer run.

However, the likely overall economic impact of the pandemic is viewed as highly negative to the general economy.

We may become subject to store closures.

We have been classified as an essential business in the jurisdictions that have decided that issue to date, and we have been allowed to remain open.

Our small, convenient stores; our sale of food, paper products, personal sanitation products, cleaning supplies, and over the counter drugs; and our acceptance of SNAP benefits among other factors have been important to our classification as an essential business.

However, we can give no assurance that that will not change in the future.

We may also be forced to close for other reasons such as the health of our associates or because of disruptions in the continued operation of our supply chain and sources of supply.

It is possible facility closures for health reasons could also impact company distribution centers or our store-support center in Chesapeake, Virginia.

Additionally, as pandemic conditions wane, we cannot predict how quickly the marketplaces in which we operate would return to normal.

Any of the foregoing factors, or other cascading effects of the coronavirus pandemic that are not currently foreseeable, could materially increase our costs, negatively impact our sales and damage the company’s results of operations and its liquidity position, possibly to a significant degree.

The duration of any such impacts cannot be predicted.

| | |

| --- | --- |

| • | *Shipping disruption*. Our oceanic shipping schedules and shipping capacity may be disrupted or delayed from time to time. One factor that may have an impact in 2020 is the outbreak and spread of the coronavirus identified as COVID-19, which presents a risk to trans-Pacific shipping. The coronavirus, which has resulted in an epidemic and travel restrictions, originated and is concentrated in China, where we buy a significant portion of our merchandise. Our supply chain may be disrupted, or our transportation costs might increase, as a result of the coronavirus as well as other international events such as war or acts of terrorism. |

| • | *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 also increase our costs. We are also experiencing higher import freight costs based on the commencement of low sulphur fuel requirements for ships. |

| • | duties, tariffs or other restrictions on trade including Section 301 tariffs that have already been imposed on imported Chinese goods; the Section 301 tariffs that have already been assessed are expected to increase merchandise costs significantly in the first two quarters of 2020, but merchandise costs in the last two quarters of 2020 are expected to be affected similarly to the last two quarters of 2019; |

The continuing integration of Family Dollar’s operations is not complete and may be more difficult, costly or time consuming than expected.

In fiscal 2019, we consolidated company and segment oversight in a single corporate headquarters, with one President, Chief Merchant, and Chief Operating Officer managing both our Family Dollar and Dollar Tree stores.

Significant progress has been made in the integration of Family Dollar and Dollar Tree, but the process is not yet complete.

In 2019, we replaced a significant number of Family Dollar associates in core functions, such as merchandising, due to the consolidation of the Family Dollar store support center to Virginia.

It will take our new personnel some time to gain the experience of their predecessors.

It is possible that the remaining integration process will take longer than anticipated and could result in the loss of key employees, higher than expected costs or unexpected costs, ongoing diversion of management attention, increased competition, the disruption of our ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect our ability to maintain relationships with customers, vendors and employees.

If we experience these difficulties, the anticipated benefits of the integration may not be realized fully, or may take longer to realize than expected, which could adversely affect our results of operations or business.

Sales growth in the more than 1,300 H2 stores opened or renovated in 2019 performed well above the Family Dollar store average, but it is uncertain how those stores will perform in 2020 in their second year of operation.

Our plans for 2020 project that our profitability improvements, as compared to 2019, will be primarily realized in the last three quarters of the year.

As a result, performance and disruption problems in those quarters may have a bigger impact on our achieving our profitability targets for 2020.

We may not manage

In addition, shrink has increased, especially at Family Dollar.

As a result, our gross profit margin has decreased.

We are instituting processes and procedures to decrease shrink, but we can give no assurance that they will be successful.

If we suffer a data breach and are unable to secure our customers’ credit card and confidential information, or other private data relating to our associates, suppliers or our business, we could be subject to negative publicity, costly government enforcement actions or private litigation and increased costs, which could damage our business reputation and adversely affect our results of operations or business.

This section of Form 10-K generally discusses [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] events and results and year-to-year comparisons between [removed: 2019] [added: 2020] and [removed: 2018.][added: 2019.]

Discussions of [removed: 2017] [added: 2018] items and year-to-year comparisons between [removed: 2018] [added: 2019] and [removed: 2017] [added: 2018] that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended February [removed: 2, 2019.][added: 1, 2020.]

Financial Statements and Supplementary [removed: Data](#s96A9A43E36AA599DB1655B62F7DBF7B5)”] [added: Data](#i34150ea8cda34020a5183785f78b37f0_49)”] of this Form 10-K.

[removed: | • | Integration of Family] [added: - Family] Dollar [removed: |]

[removed: | ◦ | In] [added: ◦In] 2018, based on our strategic and operational reassessment of the Family Dollar segment following challenges that the business experienced that 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. [removed: Accordingly, a goodwill impairment test was performed in the fourth quarter of fiscal 2018 and we performed our annual impairment test in 2019. The results of the impairment tests showed that the fair value of the Family Dollar reporting unit was lower than its carrying value resulting in $313.0 million and $2.73 billion non-cash pre-tax and after-tax goodwill impairment charges in the fourth quarters of fiscal 2019 and 2018, respectively. |]

[removed: | ◦ | In March 2019, we announced plans for a store optimization program for Family Dollar.] For fiscal 2019, this program included rolling out a new model for both new and renovated Family Dollar stores, internally known as H2, re-bannering selected stores to the Dollar Tree brand, closing under-performing stores, and installing adult beverages and expanding freezers and coolers in selected stores. [removed: We plan to continue to roll out the H2 concept to more stores, increase the number of stores with adult beverages and expand freezers and coolers in selected stores in 2020. |]

[removed: | ◦ | In] [added: ◦In] fiscal 2019, we substantially completed our consolidation of our store support centers in Matthews, North Carolina and Chesapeake, Virginia to our Summit Pointe development in Chesapeake, Virginia. [removed: |]

[removed: | • |] [added: -] Supply Chain [removed: |]

[removed: | ◦ | In] [added: ◦In] the third quarter of [removed: 2018,] [added: 2019,] we opened a new 1.2 million square foot distribution center in [removed: Warrensburg, Missouri. |][added: Morrow County, Ohio.]

[removed: | ◦ | In] [added: ◦In] the third quarter of [removed: 2019,] [added: 2020,] we opened a new 1.2 million square foot distribution center in [removed: Morrow County, Ohio. |][added: Rosenberg, Texas and opened the first phase of our new Ocala, Florida distribution center.]

[removed: | • | Long-term] [added: - Long-term] Debt [removed: |]

[removed: | ◦ | During] [added: ◦During] the first quarter of 2018, we redeemed our $750.0 million acquisition notes and accelerated the amortization of debt-issuance costs associated with the notes of $6.1 million. [removed: |]

[removed: | ◦ | During] [added: ◦During] the first quarter of 2018, we refinanced our long-term debt obligations as follows: [removed: |]

[removed: | ▪ | We] [added: ▪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; [removed: |]

[removed: | ▪ | We] [added: ▪We] entered into a credit agreement for a $782.0 million term loan facility and a $1.25 billion revolving credit facility; [removed: |]

[removed: | ▪ | We] [added: ▪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 [removed: $2,500.0 million] [added: $2.5 billion] outstanding under our acquisition debt, resulting in the acceleration of the expensing of $41.2 million of deferred financing costs and [removed: the incurrence of] [added: our incurring] $114.3 million in prepayment penalties. [removed: |]

[removed: | ◦ | During] [added: ◦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. [removed: |]

[removed: | ◦ | During] [added: ◦During] the fourth quarter of 2019, we prepaid $500.0 million of the $750.0 million Senior Floating Rate Notes due 2020 and accelerated the expensing of $0.3 million of deferred financing costs. [removed: |]

We are a leading operator of more than [removed: 15,200] [added: 15,600] retail discount stores and we conduct our operations in two reporting segments.

Our Dollar Tree segment is the leading operator of discount variety stores offering merchandise [added: predominantly] at the fixed price of $1.00.

First is our success at opening new [removed: stores or adding new stores through mergers or acquisitions.][added: stores.]

At [removed: February 1, 2020,] [added: January 30, 2021,] we operated stores in 48 states and the District of Columbia, as well as stores in five Canadian provinces.

A breakdown of store counts and square footage by segment for the years ended [added: January 30, 2021 and] February 1, 2020 [removed: and February 2, 2019] is as follows:

| | [removed: Year Ended] | | [added: Year Ended] | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | |]

| | [removed: February 1, 2020] | | | | | [added: January 30,] | | | | [removed: February] [added: | | February 1, | | | | | | February] 2, [removed: 2019] | | | | | | [added: Fiscal 2020 vs. Fiscal 2019] | | [added: |]

| | [removed: Dollar Tree] | | [added: Dollar Tree] | [removed: Family Dollar] | | | [removed: Total] | | [added: Family Dollar] | [removed: Dollar Tree] | | | [removed: Family Dollar] | | [added: Total] | [removed: Total] | | [added: | | | Dollar Tree | | | | | | Family Dollar | | | | | | Total | | |]

| Store Count: | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | |]

| Beginning | [removed: 7,001] | | [added: 7,505] | [removed: 8,236] | | | [removed: 15,237] | | [added: 7,783] | [removed: 6,650] | | | [removed: 8,185] | | [added: 15,288] | [removed: 14,835] | | [added: | | | 7,001 | | | | | | 8,236 | | | | | | 15,237 | | |]

| New stores | [removed: 348] | | [added: 341] | [removed: 170] | | | [removed: 518] | | [added: 156] | [removed: 320] | | | [removed: 226] | | [added: 497] | [removed: 546] | | [added: | | | 348 | | | | | | 170 | | | | | | 518 | | |]

| Re-bannered stores | [removed: 200] | | [added: (4)] | [removed: (200] | [removed: )] | | [removed: —] | | [added: 5] | [removed: 52] | | | [removed: (53] | [removed: )] | [added: 1] | [removed: (1] | [removed: )] | [added: | | | 200 | | | | | | (200) | | | | | | — | | |]

| Closings | [removed: (44] | [removed: )] | [added: (37)] | [removed: (423] | [removed: )] | | [removed: (467] | [removed: )] | [added: (64)] | [removed: (21] | [removed: )] | | [removed: (122] | [removed: )] | [added: (101)] | [removed: (143] | [removed: )] | [added: | | | (44) | | | | | | (423) | | | | | | (467) | | |]

| Ending | [removed: 7,505] | | [added: 7,805] | [removed: 7,783] | | | [removed: 15,288] | | [added: 7,880] | [removed: 7,001] | | | [removed: 8,236] | | [added: 15,685] | [removed: 15,237] | | [added: | | | 7,505 | | | | | | 7,783 | | | | | | 15,288 | | |]

| Relocations | [removed: 47] | | [added: 49] | [removed: 15] | | | [removed: 62] | | [added: 39] | [removed: 54] | | | [removed: 13] | | [added: 88] | [removed: 67] | | [added: | | | 47 | | | | | | 15 | | | | | | 62 | | |]

| Selling Square Feet (in millions): | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | |]

| Beginning | [removed: 60.3] | | [added: 64.6] | [removed: 59.8] | | | [removed: 120.1] | | [added: 56.7] | [removed: 57.3] | | | [removed: 59.3] | | [added: 121.3] | [removed: 116.6] | | [added: | | | 60.3 | | | | | | 59.8 | | | | | | 120.1 | | |]

| New stores | [removed: 3.0] | | [added: 3.1] | [added: | | | | |] 1.3 | | | [removed: 4.3] | | | [removed: 2.7] [added: 4.4] | | | [removed: 1.7] | | | [removed: 4.4] [added: 3.0] | | [added: | | | | 1.3 | | | | | | 4.3 | | |]

| Re-bannered stores | [removed: 1.5] | | [added: (0.1)] | [removed: (1.5] | [removed: )] | | [added: | | 0.1 | | | | | |] — | | | [removed: 0.4] | | | [removed: (0.4] [added: 1.5] | [removed: )] | | [added: | | | (1.5) | | | | | |] — | | [added: |]

| Closings | [removed: (0.4] | [removed: )] | [added: (0.3)] | [removed: (2.9] | [removed: )] | | [removed: (3.3] | [removed: )] | [added: (0.5)] | [removed: (0.2] | [removed: )] | | [removed: (0.8] | [removed: )] | [added: (0.8)] | [removed: (1.0] | [removed: )] | [added: | | | (0.4) | | | | | | (2.9) | | | | | | (3.3) | | |]

| Relocations | [added: | | 0.1 | | | | | | 0.1 | | | | | |] 0.2 | | | [removed: —] | | | 0.2 | | | [removed: 0.1] | | | — | | | [removed: 0.1] | | [added: | 0.2 | | |]

| Ending | [removed: 64.6] | | [added: 67.4] | [removed: 56.7] | | | [removed: 121.3] | | [added: 57.7] | [removed: 60.3] | | | [removed: 59.8] | | [added: 125.1] | [removed: 120.1] | | [added: | | | 64.6 | | | | | | 56.7 | | | | | | 121.3 | | |]

- Impact of COVID-19

The COVID-19 pandemic has materially affected, and likely will continue to affect, our financial condition and results of operations for the foreseeable future.

As you review the Management’s Discussion and Analysis of Financial Condition and Results of Operations, please keep in mind the following.

As an essential business, our stores and distribution centers have remained open during the pandemic; however, our business trends and financial results are materially different than what we expected.

We estimate that our increased costs related to COVID-19 for premium pay including bonuses, supplies, protective equipment, and similar items in fiscal 2020 was $279.0 million.

Although we believe that the pandemic has resulted in higher sales at Family Dollar, we also believe it has resulted in significantly lower sales at Dollar Tree during the Easter season in 2020 and in our party departments.

In addition, as a result of fewer customer trips, sales in certain consumable departments such as snacks and candy have been lower.

We have experienced fewer customer visits and higher average ticket.

The mix and profit margin of products being purchased by our customers has been different and has changed during 2020.

As demand for essential goods, including cleaning supplies and sanitizer, household products, paper goods, food and over-the-counter medicine, increased to unprecedented levels, both our domestic suppliers and distribution centers were stressed to keep up with the demand.

We expect this disruption with certain vendors and SKUs to continue into 2021.

The effect of COVID-19-related stimulus purchases for some other non-essential items may create additional disruptions.

We have implemented several changes to support our associates in adhering to CDC recommendations.

We have:

◦Activated our Business Response Team to communicate, assess and address potential exposure throughout the organization;

◦Provided personal protective equipment including masks, gloves and sanitizers for our store and distribution center associates;

◦Deployed plexiglass sneeze guards for all registers at all stores;

◦Deployed hand sanitizer stands in each of our stores;

◦Equipped stores, distribution centers and the store support center with necessary supplies for enhanced cleaning protocol;

◦Provided wage premiums for all store and distribution center hourly associates, excluding hourly-paid store managers;

◦Provided minimum guaranteed sales bonuses for each store manager as well as “Thank You” bonuses and bonuses for certain salaried associates in our field operations and distribution centers;

◦Provided pay continuation for associates who test positive or who are Group 1 associates who have to self-quarantine;

◦Created a “store” within each distribution center to allow our associates to shop for needed supplies at work when supplies were scarce in retail locations;

◦Eliminated all non-essential air travel;

◦Utilized technology options for all large group meetings;

◦Prohibited external visitors’ access to the store support center;

◦Enabled the majority of our store support center teams to work remotely;

◦Enabled contactless payments to our POS systems for our customers;

◦Followed local municipality, county, and state guidelines and regulations needed to be open as an essential business;

◦Encouraged safe social distancing protocols for our customers with signing, graphics and communications;

◦Enabled health prescreening questionnaire for all store and distribution associates before entering work; and

◦Established temperature check protocols for our associates at all distribution centers and the store support center.

Given the level of volatility and uncertainty surrounding the future impact of COVID-19 on our customers, suppliers and the broader economies in the locations that we operate as well as uncertainty around the future impact on our supply chain, it is challenging to predict our future operations and financial results.

Following is a discussion of the impacts that we have seen and the factors which could influence our future performance.

During March 2020, our Dollar Tree and Family Dollar stores began to experience a significant increase in customer demand and sales related to essential products and comparable store net sales increased significantly.

However, beginning the last week of March 2020 and continuing into April during the peak of the Easter selling season, comparable store net sales at our Dollar Tree stores decreased.

Beginning in mid-April, comparable store net sales at our Dollar Tree stores increased as the comparable Easter period from 2019 had passed.

For fiscal 2020, enterprise comparable store net sales increased 6.1% resulting from an increase in average ticket of 20.0%, partially offset by decreased traffic of 11.6%.

After the Easter selling season, in both banners, we saw an increase in demand for and sales of discretionary products and our seasonal business for the other holidays throughout the year was strong.

The future impact of COVID-19 on our customers and our business is difficult to predict.

Unless otherwise indicated, references to “we,” “our” or “us” refer to Dollar Tree, Inc. and its direct and indirect subsidiaries on a consolidated basis.

| | |

| --- | --- |

| • | Coronavirus Pandemic |

| ◦ | In March 2020, infections of the coronavirus COVID-19 had become pandemic with persons testing positive in all fifty states and the District of Columbia. With the possibility of widespread infection in the United States and abroad, national, state and local authorities have recommended social distancing and imposed or are considering quarantine and isolation measures on large portions of the population, including mandatory business closures. The Company has been classified as an essential business in certain jurisdictions that have decided that issue to date, and we have been allowed to remain open. However, we can give no assurance that that will not change in the future and we may also be forced to close stores or other facilities for other reasons such as the health of our associates or because of disruptions in the continued operation of our supply chain and sources of supply. Other economic effects of the COVID-19 pandemic are difficult to predict and may adversely impact our results of operations or business condition. |

| ◦ | In fiscal 2019, we began construction of a new 1.2 million square foot distribution center in Rosenberg, Texas which is expected to be operational in the third quarter of 2020. |

| ◦ | In fiscal 2019, we announced plans to construct a new high velocity distribution center in Ocala, Florida that will provide service directly to Dollar Tree and Family Dollar stores throughout Florida and parts of the Southeast and will be built in two phases eventually comprising a 1.7 million square foot facility. |

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Fiscal 2017 ended on February 3, 2018 and included 53 weeks, commensurate with the retail calendar.

The 53rd week in 2017 added approximately $406.6 million in sales.

In the Dollar Tree segment, customer count increased 1.3% and average ticket increased 1.0%.

In the Family Dollar segment, an increase of 1.8% in average ticket was partially offset by a decrease in customer count of 0.4%.

Including the impact of currency, comparable store net sales in the Dollar Tree segment increased 2.2%.

Comparable store net sales are positively affected by our expanded and relocated stores, which we include in the calculation, and are negatively affected when we open new stores, re-banner stores or expand stores near existing stores.

We continued the roll-out of frozen and refrigerated merchandise to more of our Dollar Tree stores in 2019 and as of February 1, 2020, the Dollar Tree banner had frozen and refrigerated merchandise in approximately 6,155 stores compared to approximately 5,665 stores at February 2, 2019.

In 2018, we rolled out a new layout to a number of our Dollar Tree stores, which we call our Snack Zone.

This layout highlights our immediate consumption snack offerings in the front of the store near the checkout areas.

As of February 1, 2020, we have Snack Zone in more than 2,100 Dollar Tree stores and we plan to incorporate Snack Zone in 500 new and existing stores in fiscal 2020.

We expect to open approximately 350 Dollar Tree stores in fiscal 2020.

We tested the H2 model in 2018 on a limited basis with positive results.

We began 2019 with approximately 200 H2 stores and as of February 1, 2020, we have approximately 1,535 H2 stores.

We plan to renovate approximately 1,250 stores to the H2 format in fiscal 2020.

We expect to open approximately 200 Family Dollar stores in fiscal 2020, which are expected to be in the H2 format.

As a part of the fiscal 2019 store optimization program at Family Dollar, we closed 423 under performing stores and incurred approximately $42.5 million in store closure costs related to markdowns, labor and the disposal of fixed assets.

In 2020, we plan to close approximately 100 stores at the end of their lease terms.

We also re-bannered 200 Family Dollar stores to the Dollar Tree brand in 2019.

As part of our continuing integration of Family Dollar’s organization and support functions, in 2019 we consolidated our store support centers in Matthews, North Carolina and Chesapeake, Virginia to our Summit Pointe development in Chesapeake, Virginia.

Approximately 30 percent of the Matthews associates, including more than 50 percent of the officers and directors, invited

to move to Chesapeake agreed to do so.

The consolidation was substantially completed in fiscal 2019 and we incurred pre-tax expense of approximately $28.2 million in 2019 in connection with the consolidation.

| • | The Office of the United States Trade Representative (USTR) previously imposed tariffs under Section 301 against Chinese goods described on Lists 1, 2, and 3 at a rate of 25%. On September 1, 2019, goods described on List 4A became subject to tariffs at the rate of 15%. On February 14, 2020, the tariff rate on List 4A goods declined to 7.5%. |

| • | During 2019 we were able to negotiate price concessions from vendors on certain products, cancel orders, change product sizes and specifications, change our product mix and change vendors in order to mitigate most of the potential adverse effects of the tariffs under Lists 1, 2 and 3 on the Dollar Tree and Family Dollar segments through January 2020. Due to the timing of the List 4A tariffs, we were not able to significantly mitigate these tariffs in 2019. As a result, in the fourth quarter of 2019, Section 301 tariffs increased our costs of goods sold by approximately $29.0 million. |

| • | We believe that the annualization of these tariffs under Section 301 will increase cost of goods sold in 2020 by approximately $47.0 million as compared to 2019, with the majority of this increase affecting the first half of 2020. |

| • | We will continue to assess the future impact of these tariffs. We can give no assurances as to the final scope, duration, or impact of any existing or future tariffs. The tariffs could have a material adverse effect on our business and results of operations in 2020. |

| • | We anticipate higher import freight costs continuing into 2020 based on our April 2019 rate negotiations and the commencement in January 2020 of low sulphur fuel requirements for ships. |

| • | We also anticipate higher promotional activity in the first quarter of 2020 in the Family Dollar segment as we rebuild our discretionary assortment. |

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Cost of sales | | 70.2 | % | | 69.6 | % | | 68.4 | % |

Our exposure to interest rate risk relates to our revolving credit facility, as borrowings under the revolving credit facility bear interest at LIBOR, reset periodically, plus 1.00% to 1.50% as determined by our credit ratings and leverage ratio.

At January 30, 2021, there were no borrowings outstanding under the revolving credit facility.

At February 1, 2020, our variable rate debt consists of our $250.0 million Senior Floating Rate Notes due April 2020.

A hypothetical increase of one percentage point on these notes would not materially affect our results of operations or cash flows.

We believe the convenience and value we offer are key factors in [added: serving and] growing our base of loyal customers.

At [removed: February 1, 2020,] [added: January 30, 2021,] we operated [removed: 15,288] [added: 15,685] discount variety retail stores.

Our stores operate under the [added: brand] names of Dollar Tree, Family Dollar and Dollar Tree Canada.

Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sECC5FBBCFE885062B5C7A9DC7D174C4B)”] [added: Operations](#i34150ea8cda34020a5183785f78b37f0_43)”] under the caption “Segment Information” and [Note [removed: 12](#s65C23A62FABE5EEFB553385981A92A43)] [added: 12](#i34150ea8cda34020a5183785f78b37f0_127)] to our consolidated financial statements.

Our Dollar Tree segment is the leading operator of discount variety stores offering merchandise [added: predominantly] at the fixed price point of $1.00.

The Dollar Tree segment includes [removed: 7,505] [added: 7,805] stores operating under the Dollar Tree and Dollar Tree Canada brands, [removed: 13] [added: 15] distribution centers in the United States and two in Canada.

In our Dollar Tree stores in the United States, we sell [removed: all] items [added: primarily] for $1.00 or less and in our Dollar Tree Canada stores, we sell [removed: all] items [added: principally] for $1.25(CAD) or less.

We buy approximately [removed: 58% to] 60% [added: to 62%] of our merchandise domestically and import the remaining [removed: 40%] [added: 38%] to [removed: 42%.][added: 40%.]

Our domestic purchases include basic, [removed: seasonal,] home, closeouts and promotional merchandise.

We believe these initiatives have and will continue to enable us to [removed: improve] [added: increase] sales and [removed: earnings by increasing the number of shopping trips made by our customers.][added: earnings.]

We carry approximately [removed: 7,700] [added: 7,500] items in our Dollar Tree stores and as of the end of fiscal [removed: 2019] [added: 2020] approximately [removed: 37%] [added: 34%] of our items are automatically replenished.

- consumable merchandise, which includes [removed: candy] [added: everyday consumables such as household paper] and [added: chemicals,] food, [added: candy,] health and [removed: beauty care,] [added: personal care products,] and [removed: everyday consumables such as][added: in many stores, frozen and refrigerated food;]

[removed: | • |] [added: -] variety merchandise, which includes toys, durable housewares, gifts, stationery, party goods, greeting cards, softlines, [added: arts] and [added: crafts supplies and] other items; and [removed: |]

- seasonal goods, which [removed: includes,] [added: include,] among others, [removed: Valentine’s Day,] [added: Christmas,] Easter, Halloween and [removed: Christmas] [added: Valentine’s Day] merchandise.

For information regarding the amounts and percentages of our net sales contributed by the above merchandise categories for the last three fiscal years, please refer to [Note [removed: 12](#s65C23A62FABE5EEFB553385981A92A43)] [added: 12](#i34150ea8cda34020a5183785f78b37f0_127)] to our consolidated financial statements.

In our [removed: 7,783] [added: 7,880] Family Dollar stores, we sell merchandise at prices that generally range from $1.00 to $10.00.

In fiscal [removed: 2019,] [added: 2020,] we purchased approximately [removed: 14%] [added: 13%] of our merchandise through our relationship with McLane Company, Inc., which distributes consumable merchandise from multiple manufacturers.

In addition, approximately [removed: 17%] [added: 16%] of our merchandise is imported directly.

[removed: After continued development, experimentation and testing, in the third quarter of fiscal 2018] [added: During 2019,] we introduced a new model for both new and renovated Family Dollar stores [added: internally] known as H2.

[removed: The] [added: This] H2 [removed: store format] [added: model] has significantly improved merchandise offerings, including approximately 20 Dollar Tree $1.00 merchandise sections and establishing a minimum number of freezer and cooler doors, throughout the store.

[removed: The stores with the] H2 [removed: format] [added: stores] have [removed: increased] [added: higher customer] traffic and [removed: provided] [added: provide] an average comparable store net sales lift in excess of [removed: 10%] [added: 10%, when compared to non-renovated stores,] in the first year following renovation.

[removed: The] H2 [removed: format performs] [added: stores perform] well in a variety of locations and especially in locations where [added: our] Family Dollar [removed: has] [added: stores have] been most challenged in the past.

We plan to renovate at least 1,250 stores to this format in fiscal [removed: 2020] [added: 2021] and also plan to build new stores in this format.

While the number of items in a given store can vary based on the store’s size, geographic location, merchandising initiatives and other factors, our typical Family Dollar store generally carries approximately [removed: 7,800] [added: 7,600] basic items alongside items that are ever-changing and seasonally-relevant throughout the year.

- consumable merchandise, which includes food and beverages, tobacco, health and [removed: beauty aids,] [added: personal care products,] household chemicals, [added: paper products, hardware and automotive supplies, diapers, batteries, and pet food and supplies;]

- home products, which [removed: includes] [added: include] housewares, home décor, giftware, and domestics, including comforters, sheets and [added: towels;]

- seasonal and electronics merchandise, which includes [removed: Valentine’s Day,] [added: Christmas,] Easter, Halloween and [removed: Christmas] [added: Valentine’s Day] merchandise, [added: personal electronics, including pre-paid cellular phones and services, stationery and school supplies, and toys.]

*Continue to execute our proven and best‑in‑class retail business strategy.* We will continue to execute our proven strategies that have generated a history of success and continued growth for [removed: the Company.][added: us.]

- aiming continuously to “Wow” the customer with a compelling, fun and fresh merchandise assortment comprising a [added: variety of the things you want and things you need, all at incredible values in bright, clean and friendly stores;]

- maintaining a flexible sourcing merchandise model that allows a variety of products to be sold as long as desired [added: merchandise margin thresholds are met;]

[removed: | • |] [added: -] growing and improving both the Dollar Tree and Family Dollar brands; [removed: |]

- pursuing a “more, better, faster” approach to the roll-out of new Dollar Tree and Family Dollar stores to broaden our [added: geographic footprint;]

[removed: | • |] [added: -] maintaining customer relevance by ensuring that we reinvent ourselves constantly through new merchandise categories and initiatives; [removed: |]

[removed: | • |] [added: -] 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 [removed: |]

At Dollar Tree, everything is [added: predominantly] $1.00, offering the customer a balanced mix of things they need and things they want.

We [removed: will] [added: expect to] benefit from an expanded target customer profile and utilize the store concepts of both Dollar Tree and Family Dollar to serve a broader range of customer demographics to drive further improvements in sales and profitability.

We are committed to growing our combined business to take advantage of significant [added: market or] white space opportunities that we believe exist for both the Dollar Tree and Family Dollar store concepts.

[removed: The range of our new store sizes, 8,000 - 10,000 selling square feet] for [removed: Dollar Tree and 7,000 - 9,000 selling square feet for] Family Dollar, allows us to target a particular location with a store that best suits that market and takes advantage of available real estate opportunities.

We believe that our [added: Dollar Tree] stores [added: and our urban Family Dollar stores] have a relatively small shopping radius, which allows us to profitably concentrate multiple stores within a single market.

[removed: Over the past five years,] [added: Typically, our] cash flows from operating activities [removed: have exceeded] [added: exceed our] capital expenditures.

Impact of COVID-19

Beginning in fiscal 2020, our business was affected by the COVID-19 pandemic.

As an essential business, our stores and distribution centers have remained open during the pandemic; however, our business trends and operations have been impacted in various ways.

For example, we have experienced fewer customer visits and higher average ticket and the mix and profit margin of products purchased by our customers has differed from historical patterns.

We have seen a shift in our customers’ purchases towards higher-margin discretionary products.

We have also experienced changes in when our customers are shopping relative to the dates of seasonal holidays with spending occurring further in advance of the holidays than in previous years.

The future impact of COVID-19 on our customers is difficult to predict as the course of the pandemic, the effectiveness of health measures, and the impact of ongoing economic stabilization efforts is uncertain and government assistance payments may not provide enough funding to support current spending levels.

The American Rescue Plan Act of 2021 (“Rescue Act”), which was enacted on March 11, 2021, provides U.S. government funding to address the continuing impact of COVID-19 on the economy, public health, individuals and businesses.

Among other things, the Rescue Act provides for $1,400 direct payments to individuals, continues supplemental unemployment benefits until September 2021, extends a prior increase in food stamp benefits, expands the child tax credit and earned income tax credit, provides for rent and utility assistance, and funds COVID-19 vaccinations, testing, treatment and prevention.

An increase in the federal minimum wage was not included in the Rescue Act as enacted.

During fiscal 2020, we paid wage premiums to our store and distribution center associates as well as “Thank You” bonuses to our store managers in recognition of their extraordinary efforts during the COVID-19 pandemic, which increased our costs.

We currently do not anticipate paying these types of premiums and bonuses in fiscal 2021.

As a result of COVID-19, our supply chain has been strained and our suppliers have faced challenges in keeping up with the unprecedented demand for essential goods, as well as discretionary goods.

Recently, the ocean-shipping industry has faced capacity issues resulting in higher costs and delays in the shipment of products from Asia.

We continue to make operational changes in an attempt to minimize the impact of these challenges on our business; however, we do not know how long these disruptions will continue.

For additional information regarding the impact of COVID-19 on our business, refer to the discussion in this Item 1.

below and “[Item 7.

We are the owners of several trademarks including “Dollar Tree” and the “Dollar Tree” logo.

We believe that our initiatives positively affect our comparable store net sales.

In fiscal 2019, we introduced our Crafter’s Square initiative in more than 650 stores.

This offering includes a new expanded assortment of arts and crafts supplies.

During fiscal 2020, we expanded this program, completing the roll-out to all of our Dollar Tree stores.

The Crafter’s Square assortment carries mark-ups which are higher than our average mark-up.

Additionally, for more than a year, we have tested a multi-price initiative referred to as Dollar Tree *Plus!* Beginning in fiscal 2019, we began testing multi-price assortments in more than 100 stores in southwestern markets.

Based on learnings from the test, we made modifications to: the mix of products offered to include primarily discretionary items; the displays and signage to drive awareness and excitement to the stores; the price points to focus on the $1, $3 and $5 price points; and increase the number of offerings above the $1 price point.

We plan to expand this initiative into a total of 500 stores beginning in the first quarter of fiscal 2021.

During 2020, we entered into a partnership with Instacart to enable our customers to shop online and receive merchandise without having to visit a store.

As of January 30, 2021, we have approximately 2,385 H2 stores.

Building on the success of the H2 format, we have developed a Combination Store which leverages both the Dollar Tree and Family Dollar brands to serve small towns across the country.

We are combining Family Dollar’s great value and assortment with Dollar Tree’s “thrill of the hunt” and fixed price point, creating a new strategic store format targeted for small towns and rural communities with populations of 3,000 to 4,000 residents.

For information regarding the amounts and percentages of our net sales contributed by the above merchandise categories for the last three fiscal years, please refer to [Note 12](#i34150ea8cda34020a5183785f78b37f0_127) to our consolidated financial statements.

As noted previously, we plan to expand our Dollar Tree *Plus!* initiative into a total of 500 stores beginning in the first quarter of fiscal 2021.

The range of our new store sizes, 8,000 - 10,000 selling square feet for Dollar Tree and 7,000 - 10,000 selling square feet

In addition, our rural Family Dollar stores have a larger shopping radius, allowing us to profitably locate in these areas because of our ability to reach customers who live farther from our stores.

Management’s Discussion and Analysis of Financial Condition and Results of Operations](#i34150ea8cda34020a5183785f78b37f0_43).”

During 2020, we launched an enterprise Executive Diversity Council comprised of diverse leaders from every department within the company who are charged with creating a diversity, equity and inclusion (“DEI”) strategy which is linked with our business goals, catalyzing cultural change throughout the organization and driving accountability at the senior management level for progress on key DEI objectives.

Management’s Discussion and Analysis of Financial Condition and Results of Operations](#i34150ea8cda34020a5183785f78b37f0_43).”

13,851 and 108.4 million square feet at January 30, 2016 to 15,685 and 125.1 million square feet at January 30, 2021.

We leverage our merchandising team to source products that can be sold in both Dollar Tree and Family Dollar stores.

Our Family Dollar H2 stores include $1.00 sections of Dollar Tree merchandise and our Dollar Tree *Plus!* stores sell items at the $1.00, $3.00 and $5.00 price points.

On July 6, 2015, we completed our acquisition of Family Dollar Stores, Inc. The Dollar Tree and Family Dollar brands have complementary business models.

Everything is $1.00 at Dollar Tree stores while Family Dollar is a neighborhood variety store offering merchandise largely for $10.00 or less.

The addition of frozen and refrigerated merchandise to more of our Dollar Tree stores has been one of our ongoing initiatives.

We added freezers and coolers to approximately 490 additional stores in fiscal 2019.

As of February 1, 2020, we have freezers and coolers in approximately 6,155 of our Dollar Tree stores.

We plan to install them in 425 new and existing stores during fiscal 2020.

In fiscal 2018, we rolled out a new layout to a number of our Dollar Tree stores, which we call our Snack Zone.

This layout highlights our immediate consumption snack offerings in the front of the store near the checkout areas.

As of February 1, 2020, we have Snack Zone in more than 2,100 Dollar Tree stores and we plan to incorporate Snack Zone in 500 new and existing stores in fiscal 2020.

household paper and chemicals, and in select stores, frozen and refrigerated food;

| | |

| --- | --- |

We started fiscal 2019 with approximately 200 H2 stores and ended fiscal 2019 with approximately 1,535 H2 stores.

paper products, hardware and automotive supplies, diapers, batteries, and pet food and supplies;

towels;

personal electronics, including pre-paid cellular phones and services, stationery and school supplies, and toys.

variety of the things you want and things you need, all at incredible values in bright, clean and friendly stores;

merchandise margin thresholds are met;

geographic footprint;

We are currently testing a concept known as Dollar Tree *Plus!* in a small group of stores.

In fiscal 2019, we began construction of a new 1.2 million square foot distribution center in Rosenberg, Texas which is expected to be operational by the summer of 2020.

In fiscal 2019, we announced plans to construct a new high velocity distribution center in Ocala, Florida that will provide service directly to Dollar Tree and Family Dollar stores throughout Florida and parts of the Southeast and will be built in two phases eventually comprising a 1.7 million square foot facility.

In addition, to support the H2 initiative we ship select product from our Dollar Tree distribution centers to our Family Dollar distribution centers and in fiscal 2019, we began to ship select product from our Dollar Tree distribution centers directly to certain of our Family Dollar stores.

Properties](#s3A61F49328C359A7A5791E49B07C0573).”

Trademarks

We are the owners of several federal service mark registrations including “Dollar Tree,” the “Dollar Tree” logo, and the Dollar Tree logo with a “1.” In addition, we own a registration for “Dollar Bill$.” We also acquired the rights to use trade names previously owned by Everything’s A Dollar, a former competitor in the $1.00 price point industry.

Several trade names were included in the purchase, including the mark “Everything’s $1.00.” We also own the logo mark for “Everything’s $1.” With the acquisition of Dollar Giant, we became the owner of several trademarks in Canada.

We have federal trademark registrations for a number and variety of private labels that we use to market many of our product lines.

Our trademark registrations have various expiration dates; however, assuming that the trademark registrations are properly maintained and renewed, they have a perpetual duration.

Employees

We employed approximately 56,900 full-time and 136,200 part-time associates on February 1, 2020.

The number of part-time associates fluctuates depending on seasonal needs.

[removed: | • |] [added: -] employment-related matters; [removed: |]

[removed: | • |] [added: -] infringement of intellectual property rights; [removed: |]

[removed: | • |] [added: -] personal injury/wrongful death claims; [removed: |]

[removed: | • |] [added: -] real estate matters; [removed: |]

[removed: | • |] [added: -] environmental and safety issues; and [removed: |]

[removed: | • |] [added: -] product safety matters, which may include regulatory matters. [removed: |]

In addition, we are currently defendants in national and state proceedings described in [Note [removed: 5](#sDACE5645EBB956EA9DB2B669A680CA0C)] [added: 5](#i34150ea8cda34020a5183785f78b37f0_94)] to our consolidated financial statements under the caption “Contingencies.”

| | |

| --- | --- |

[removed: FORM 10-K][added: FORM 10-K]

| ☒ | [added: | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

For the fiscal year ended [removed: February 1, 2020][added: January 30, 2021]

| ☐ | [added: | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

[removed: ][added: ]

| Virginia | | [added: | | | |] 26-2018846 | [added: | |]

| (State or other jurisdiction of incorporation or organization) | | [added: | | | |] (I.R.S. Employer Identification No.) | [added: | |]

| 500 Volvo Parkway | | | | [added: | | | | | | | |]

| Chesapeake, | [added: | |] Virginia | | [added: | | | |] 23320 | [added: | |]

| (Address of principal executive offices) | | | [added: | | | | | |] (Zip Code) | [added: | |]

| Title of each class | [added: | |] Trading symbol(s) | [added: | |] Name of each exchange on which registered | [added: | |]

| Common Stock, par value $.01 per share | [added: | |] DLTR | [added: | |] NASDAQ Global Select Market | [added: | |]

| Yes | [added: | |] ☒ | [added: | |] No | [added: | |] ☐ | [added: | |]

| Yes | [added: | |] ☐ | [added: | |] No | [added: | |] ☒ | [added: | |]

| Large accelerated filer | [added: | |] ☒ | [added: | |] Accelerated filer | [added: | |] ☐ | [added: | |]

| Non-accelerated filer | [added: | |] ☐ | [added: | |] Smaller reporting company | [added: | |] ☐ | [added: | |]

| | | [added: | | | |] Emerging growth company | [added: | |] ☐ | [added: | |]

The aggregate market value of common stock held by non-affiliates of the registrant on [removed: August 2, 2019,] [added: July 31, 2020,] the last business day of the registrant’s most recently completed second fiscal quarter, was [removed: $22,675,294,630,] [added: $21,864,456,043,] based upon the closing sale price for the registrant’s common stock on such date.

On March [removed: 16, 2020,] [added: 10, 2021,] there were [removed: 236,810,841] [added: 233,420,925] shares of the registrant’s common stock outstanding.

The information called for in Items 10, 11, 12, 13 and 14 of Part III, to the extent not set forth herein, is incorporated by reference to the definitive Proxy Statement for the Annual Meeting of Stockholders [removed: of the Company] to be held June [removed: 11, 2020,] [added: 10, 2021,] which will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended [removed: February 1, 2020.][added: January 30, 2021.]

FOR THE FISCAL YEAR [removed: ENDED FEBRUARY 1, 2020][added: ENDED JANUARY 30, 2021]

| | | [added: | | | |] Page | [added: | |]

| | [added: | |] PART I | | [added: | | | |]

| Item 1. | [removed: [Business](#sDF6074805C265E4AA1F4DFE94FFE9FEB)] | [removed: [6](#sDF6074805C265E4AA1F4DFE94FFE9FEB)] | [added: [Business](#i34150ea8cda34020a5183785f78b37f0_16) | | | [6](#i34150ea8cda34020a5183785f78b37f0_16) | | |]

| Item 1A. | [added: | |] [Risk [removed: Factors](#sBE02BBF3BB3950B6ABF2CD63F3ADACF9)] [added: Factors](#i34150ea8cda34020a5183785f78b37f0_19)] | [removed: [11](#sBE02BBF3BB3950B6ABF2CD63F3ADACF9)] | [added: | [13](#i34150ea8cda34020a5183785f78b37f0_19) | | |]

| Item 1B. | [added: | |] [Unresolved Staff [removed: Comments](#sD145013AB82151459781475AE68BF2AD)] [added: Comments](#i34150ea8cda34020a5183785f78b37f0_22)] | [removed: [19](#sD145013AB82151459781475AE68BF2AD)] | [added: | [21](#i34150ea8cda34020a5183785f78b37f0_22) | | |]

| Item 2. | [removed: [Properties](#s3A61F49328C359A7A5791E49B07C0573)] | [removed: [20](#s3A61F49328C359A7A5791E49B07C0573)] | [added: [Properties](#i34150ea8cda34020a5183785f78b37f0_25) | | | [22](#i34150ea8cda34020a5183785f78b37f0_25) | | |]

| Item 3. | [added: | |] [Legal [removed: Proceedings](#sF0B7B63FB4A15D5A969BE7A20FFD3B91)] [added: Proceedings](#i34150ea8cda34020a5183785f78b37f0_28)] | [removed: [21](#sF0B7B63FB4A15D5A969BE7A20FFD3B91)] | [added: | [23](#i34150ea8cda34020a5183785f78b37f0_28) | | |]

| Item 4. | [added: | |] [Mine Safety [removed: Disclosures](#s8E2789F5163E52E0A2D8DD2C202015B1)] [added: Disclosures](#i34150ea8cda34020a5183785f78b37f0_31)] | [removed: [21](#s8E2789F5163E52E0A2D8DD2C202015B1)] | [added: | [23](#i34150ea8cda34020a5183785f78b37f0_31) | | |]

| | [added: | |] PART II | | [added: | | | |]

| Item 5. | [added: | |] [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#sEEF40414F5BA54A781F9D8D0168C0B2F)] [added: Securities](#i34150ea8cda34020a5183785f78b37f0_37)] | [removed: [22](#sEEF40414F5BA54A781F9D8D0168C0B2F)] | [added: | [24](#i34150ea8cda34020a5183785f78b37f0_37) | | |]

| Item 6. | [added: | |] [Selected Financial [removed: Data](#sB5CB6DEEE3E8550888787C72DFB14CB8)] [added: Data](#i34150ea8cda34020a5183785f78b37f0_40)] | [removed: [23](#sB5CB6DEEE3E8550888787C72DFB14CB8)] | [added: | [26](#i34150ea8cda34020a5183785f78b37f0_40) | | |]

| Item 7. | [added: | |] [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sECC5FBBCFE885062B5C7A9DC7D174C4B)] [added: Operations](#i34150ea8cda34020a5183785f78b37f0_43)] | [removed: [26](#sECC5FBBCFE885062B5C7A9DC7D174C4B)] | [added: | [28](#i34150ea8cda34020a5183785f78b37f0_43) | | |]

| Item 7A. | [added: | |] [Quantitative and Qualitative Disclosures About Market [removed: Risk](#sDA3C6B0E77365432A3022919315DE722)] [added: Risk](#i34150ea8cda34020a5183785f78b37f0_46)] | [removed: [37](#sDA3C6B0E77365432A3022919315DE722)] | [added: | [41](#i34150ea8cda34020a5183785f78b37f0_46) | | |]

| Item 8. | [added: | |] [Financial Statements and Supplementary [removed: Data](#s96A9A43E36AA599DB1655B62F7DBF7B5)] [added: Data](#i34150ea8cda34020a5183785f78b37f0_49)] | [removed: [38](#s96A9A43E36AA599DB1655B62F7DBF7B5)] | [added: | [42](#i34150ea8cda34020a5183785f78b37f0_49) | | |]

| Item 9. | [added: | |] [Changes in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#s5F5823BDEA1858DF9BFDD2BA10A0BB73)] [added: Disclosure](#i34150ea8cda34020a5183785f78b37f0_139)] | [removed: [69](#s5F5823BDEA1858DF9BFDD2BA10A0BB73)] | [added: | [69](#i34150ea8cda34020a5183785f78b37f0_139) | | |]

| Item 9A. | [added: | |] [Controls and [removed: Procedures](#s0EA5B8D262FE5C52870E9ACF3BEA26BC)] [added: Procedures](#i34150ea8cda34020a5183785f78b37f0_142)] | [removed: [69](#s0EA5B8D262FE5C52870E9ACF3BEA26BC)] | [added: | [69](#i34150ea8cda34020a5183785f78b37f0_142) | | |]

| Item 9B. | [added: | |] [Other [removed: Information](#s48ECCD37B8205A57BE341328609C3C30)] [added: Information](#i34150ea8cda34020a5183785f78b37f0_145)] | [removed: [71](#s48ECCD37B8205A57BE341328609C3C30)] | [added: | [71](#i34150ea8cda34020a5183785f78b37f0_145) | | |]

| | [added: | |] PART III | | [added: | | | |]

| Item 10. | [added: | |] [Directors, Executive Officers and Corporate [removed: Governance](#s7ED3298AC0F456E495D09963D5C013F6)] [added: Governance](#i34150ea8cda34020a5183785f78b37f0_151)] | [removed: [71](#s7ED3298AC0F456E495D09963D5C013F6)] | [added: | [71](#i34150ea8cda34020a5183785f78b37f0_151) | | |]

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

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| [Signatures](#i34150ea8cda34020a5183785f78b37f0_175) | | | | | | [75](#i34150ea8cda34020a5183785f78b37f0_175) | | |

- The potential effect of general business or economic conditions on our business, including the direct and indirect effects of the COVID-19 pandemic on the economy, consumer spending levels, and unemployment in our markets;

- The uncertainty of the impact of the COVID-19 pandemic and public health measures on our business and results of operations, including uncertainties surrounding possible disruptions in our supply chain or sources of supply, the physical and financial health of our customers, the effectiveness and duration of government assistance programs to individuals, households and businesses to support consumer spending, levels of foot traffic in our stores, changes in customer demand for our consumable and essential products as well as our discretionary products, and increased expenses for higher wages and bonuses paid to associates and the cost of personal protective equipment and additional cleaning supplies and protocols for the safety of our associates;

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| ☐ |

| [Signatures](#s8BD8D5666A9A5B72A7839A14FBD5958D) | | [75](#s8BD8D5666A9A5B72A7839A14FBD5958D) |

| • | the potential effect of general business or economic conditions (including inflation) 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, freight and other distribution costs, fuel costs and wage and benefit costs, consumer spending levels, and population, employment and job growth and/or losses in our markets; |

| • | the uncertainty of the impact of the coronavirus identified as COVID-19, including whether we will be or remain designated an “essential business” and otherwise be able to keep stores open; |

| • | the ability to retain key personnel and attract new personnel at Family Dollar and Dollar Tree and the performance of those personnel; |

| • | 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, strategies and expectations (financial or otherwise), including synergies, the cost to achieve synergies, and the effect on earnings per share; |

| • | the effect of changes in tax laws and regulatory interpretations of such laws; |

| • | the capabilities of our inventory supply chain technology and other systems; |

| • | our expectations regarding our dividend policy and stock buy-backs; |

As of [removed: February 1, 2020,] [added: January 30, 2021,] we operated [removed: 15,062] [added: 15,455] stores across the contiguous United States and the District of Columbia and operated [removed: 226] [added: 230] stores within five Canadian provinces.

The Dollar Tree segment includes [removed: 7,505] [added: 7,805] stores operating under the Dollar Tree and Dollar Tree Canada brands with stores predominantly ranging from 8,000 - 10,000 selling square feet.

The Family Dollar segment includes [removed: 7,783] [added: 7,880] stores operating under the Family Dollar brand with stores predominantly ranging from 6,000 - 8,000 selling square feet.

For additional information on store counts and square footage by segment for the years ended [removed: February 1, 2020] [added: January 30, 2021] and February [removed: 2, 2019,] [added: 1, 2020,] see “[Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sECC5FBBCFE885062B5C7A9DC7D174C4B)”] [added: Operations](#i34150ea8cda34020a5183785f78b37f0_43)”] under the caption “Overview.”

As of [removed: February 1, 2020,] [added: January 30, 2021,] we operated [removed: 24] [added: 26] distribution centers occupying a total of [removed: approximately 22.3] [added: 24.0] million square feet, [removed: 13] [added: 15] of which are primarily dedicated to serving our Dollar Tree stores and 11 distribution centers primarily serve our Family Dollar stores.

Our St. George, Utah distribution center services both Family Dollar and Dollar Tree stores and we expect future distribution centers to be built with the capability to service both Dollar Tree and Family Dollar [removed: stores, including the high velocity facility that is under construction in Ocala, Florida.][added: stores.]

We believe our distribution center network is currently capable of supporting approximately [removed: $29.5] [added: $30.2] billion in annual sales in the United States.

With the exception of [removed: three] [added: four] of our facilities, each of our distribution centers in the United States also contains automated conveyor and sorting systems.

We are also developing additional parcels on our Summit Pointe property for mixed-use [removed: purposes.][added: purposes and began leasing some portions during 2020.]

[removed: Management’s] [added: Managem](#i34150ea8cda34020a5183785f78b37f0_43)[ent’s] Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sECC5FBBCFE885062B5C7A9DC7D174C4B)”] [added: Operations](#i34150ea8cda34020a5183785f78b37f0_43)”] under the caption “Funding Requirements.”

Our distribution network supports multiple store formats including H2, Combination Stores and Dollar Tree *Plus!* We ship to our H2 format stores from our Family Dollar distribution centers and we ship to our Dollar Tree *Plus!* format stores from our Dollar Tree distribution centers.

We ship to our Combination Stores from both Dollar Tree and Family Dollar distribution centers.

In addition, as a result of the H2 initiative, we ship select product from our Dollar Tree distribution centers to our Family Dollar distribution centers and in fiscal 2019, we began to ship select product from our Dollar Tree distribution centers directly to certain of our Family Dollar stores.

We continue to own our facility in Matthews, North Carolina, which occupies approximately 0.3 million square feet.

Our common stock is traded on The Nasdaq Global Select Market® under the symbol “DLTR.” As of March [removed: 16, 2020,] [added: 10, 2021,] we had [removed: 2,377] [added: 2,288] shareholders of record.

During fiscal [added: 2020 and] 2019, we repurchased [added: 3,982,478 and] 1,967,355 shares of common [removed: stock] [added: stock, respectively,] on the open market at [removed: an average cost of $101.66 per share and] a total cost of [removed: approximately] [added: $400.0 million and] $200.0 [removed: million.][added: million, respectively.]

We did not repurchase any shares of common stock [removed: on the open market] in fiscal [removed: 2018 or fiscal 2017.][added: 2018.]

[removed: At February 1, 2020,] [added: As of January 30, 2021,] we had [removed: $800.0] [added: $400.0] million remaining under [added: the] Board repurchase authorization.

[removed: Management does] [added: We do] not anticipate paying [added: cash] dividends on our common stock in the foreseeable future.

The following graph sets forth the yearly percentage change in the cumulative total shareholder return on our common stock during the five fiscal years ended [removed: February 1, 2020,] [added: January 30, 2021,] compared with the cumulative total returns of the S&P 500 Index and the S&P Retailing Index.

The comparison assumes that $100 was invested in our common stock on January [removed: 31, 2015,] [added: 30, 2016,] and, in each of the foregoing indices on January [removed: 31, 2015,] [added: 30, 2016,] and that dividends were reinvested.

[removed: ][added: ]

| | [added: | |] Year Ended | | | | | | | | | | | | | | | | | |

| | [removed: January 31, 2015] | | [removed: |] January 30, 2016 | | | January 28, 2017 | | | February 3, 2018 | | | February 2, 2019 | | | February 1, 2020 | | | [added: January 30, 2021 | | |]

Issuer Purchases of Equity Securities

The following table presents our share repurchase activity during the fourth quarter of 2020:

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| Fiscal Period | | | | | | Total number of shares purchased | | | | | | Average price paid per share | | | | | | Total number of shares purchased as part of publicly announced plans or programs | | | | | | Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions) | | |

| November 1, 2020 - November 28, 2020 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | $ | 600.0 | |

| November 29, 2020 - January 2, 2021 | | | | | | 896,698 | | | | | | 109.23 | | | | | | 896,698 | | | | | | 502.1 | | |

| January 3, 2021 - January 30, 2021 | | | | | | 931,476 | | | | | | 109.56 | | | | | | 931,476 | | | | | | 400.0 | | |

| Total | | | | | | 1,828,174 | | | | | | $ | 109.40 | | | | | 1,828,174 | | | | | | $ | 400.0 | |

Subsequently, on March 2, 2021, the Board increased the share repurchase authorization by $2.0 billion resulting in a total share repurchase authorization of $2.4 billion.

The repurchase authorization does not have an expiration date.

Stockholder Matters

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| Dollar Tree, Inc. | | | $ | 100.00 | | $ | 91.06 | | $ | 133.83 | | $ | 118.90 | | $ | 107.07 | | $ | 125.01 | |

| S&P 500 Index | | | 100.00 | | | 120.04 | | | 151.74 | | | 148.23 | | | 180.37 | | | 211.48 | | |

| S&P Retailing Index | | | 100.00 | | | 120.09 | | | 174.49 | | | 186.29 | | | 219.46 | | | 316.05 | | |

None of such repurchases occurred in the fourth quarter of fiscal 2019.

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| Dollar Tree, Inc. | $ | 100.00 | | $ | 114.37 | | $ | 104.15 | | $ | 153.07 | | $ | 135.99 | | $ | 122.46 | |

| S&P 500 Index | 100.00 | | | 99.33 | | | 119.24 | | | 150.73 | | | 147.24 | | | 179.17 | | |

| S&P Retailing Index | 100.00 | | | 118.07 | | | 140.38 | | | 203.32 | | | 216.05 | | | 253.36 | | |

The following table presents a summary of our selected financial data for the fiscal years ended [added: January 30, 2021,] February 1, 2020, February 2, 2019, February 3, 2018, [removed: January 28, 2017,] and January [removed: 30, 2016.][added: 28, 2017.]

First is our success at opening new [removed: stores or adding new stores through mergers or acquisitions.][added: stores.]

Selling square footage excludes the storage, receiving and office space that generally occupies approximately [removed: 19%] [added: 20%] of the total square footage of our stores.

For additional information regarding the impairment of the Family Dollar goodwill, refer to [Note [removed: 3](#s40F9597518475932B02E99620A8751BC)] [added: 3](#i34150ea8cda34020a5183785f78b37f0_85)] to our consolidated financial statements.

| | [added: | |] Year Ended | | | | | | | | | | | | | | | | | | | [added: | | | | | | | |]

| | [added: | | January 30, 2021 | | | | | |] February 1, 2020 | | | | [added: | |] February 2, 2019 | | | | [added: | |] February 3, 2018 | | | | [removed: January 28, 2017] | | [removed: | |] January [removed: 30, 2016] [added: 28, 2017] | | |

| Statement of Operations Data: | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Net sales | [added: | |] $ | [removed: 23,610.8] [added: 25,509.3] | | | [added: | |] $ | [removed: 22,823.3] [added: 23,610.8] | | | [added: | |] $ | [removed: 22,245.5] [added: 22,823.3] | | | [added: | |] $ | [removed: 20,719.2] [added: 22,245.5] | | | [added: | |] $ | [removed: 15,498.4] [added: 20,719.2] | |

| Gross profit | [added: | | 7,788.3 | | | | | |] 7,040.7 | | | | [added: | |] 6,947.5 | | | | [removed: 7,021.9] | | [added: 7,021.9] | | [removed: 6,394.7] | | | | [removed: 4,656.7] [added: 6,394.7] | | |

| Selling, general and administrative expenses | [added: | | 5,900.4 | | | | | |] 5,778.5 | | | | [added: | |] 7,887.0 | | | | [removed: 5,022.8] | | [added: 5,022.8] | | [removed: 4,689.9] | | | | [removed: 3,607.0] [added: 4,689.9] | | |

| Operating income (loss) | [added: | | 1,887.9 | | | | | |] 1,262.2 | | | | [removed: (939.5] | | [removed: )] [added: (939.5)] | | [removed: 1,999.1] | | | | [removed: 1,704.8] [added: 1,999.1] | | | | [removed: 1,049.7] | | [added: 1,704.8] | [added: | |]

| Net income (loss) | [added: | | 1,341.9 | | | | | |] 827.0 | | | | [removed: (1,590.8] | | [removed: )] [added: (1,590.8)] | | [removed: 1,714.3] | | | | [removed: 896.2] [added: 1,714.3] | | | | [removed: 282.4] | | [added: 896.2] | [added: | |]

| Margin Data (as a percentage of net sales): | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Gross profit | [removed: 29.8] | | [added: 30.5 | |] % | | [removed: 30.4] | | [added: 29.8 | |] % | | [removed: 31.6] | | [added: 30.4 | |] % | | [removed: 30.8] | | [added: 31.6 | |] % | | [removed: 30.1] | | [added: 30.8 | |] % |

| Selling, general and administrative expenses | [removed: 24.5] | | [added: 23.1 | |] % | | [removed: 34.5] | | [added: 24.5 | |] % | | [removed: 22.6] | | [added: 34.5 | |] % | | [added: | |] 22.6 | | % | | [removed: 23.3] | | [added: 22.6 | |] % |

| Operating income (loss) | [removed: 5.3] | | [added: 7.4 | |] % | | [removed: (4.1] | | [removed: )%] [added: 5.3] | | [removed: 9.0] [added: %] | | [added: | | (4.1) | |] % | | [removed: 8.2] | | [added: 9.0 | |] % | | [removed: 6.8] | | [added: 8.2 | |] % |

| Net income (loss) | [removed: 3.5] | | [added: 5.3 | |] % | | [removed: (7.0] | | [removed: )%] [added: 3.5] | | [removed: 7.7] [added: %] | | [added: | | (7.0) | |] % | | [removed: 4.3] | | [added: 7.7 | |] % | | [removed: 1.8] | | [added: 4.3 | |] % |

| Per Share Data: | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Diluted net income (loss) per [removed: share(1)] [added: share] | [added: | |] $ | [removed: 3.47] [added: 5.65] | | | [added: | |] $ | [removed: (6.69] [added: 3.47] | [removed: )] | | [added: | |] $ | [removed: 7.21] [added: (6.69)] | | | [added: | |] $ | [removed: 3.78] [added: 7.21] | | | [added: | |] $ | [removed: 1.26] [added: 3.78] | |

| Diluted net income (loss) per share increase (decrease) | [removed: 151.9] | | [added: 62.8 | |] % | | [removed: (192.8] | | [removed: )%] [added: 151.9] | | [removed: 90.7] [added: %] | | [added: | | (192.8) | |] % | | [removed: 200.0] | | [added: 90.7 | |] % | | [removed: (56.6] | | [removed: )%] [added: 200.0] | [added: | % |]

| Balance Sheet Data: | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Cash and cash equivalents and short-term investments | [added: | |] $ | [removed: 539.2] [added: 1,416.7] | | | [added: | |] $ | [removed: 422.1] [added: 539.2] | | | [added: | |] $ | [removed: 1,097.8] [added: 422.1] | | | [added: | |] $ | [removed: 870.4] [added: 1,097.8] | | | [added: | |] $ | [removed: 740.1] [added: 870.4] | |

| Working capital | [added: | | 1,320.5 | | | | | |] 722.9 | | | | [added: | |] 2,197.6 | | | | [removed: 1,717.2] | | [added: 1,717.2] | | [removed: 1,832.1] | | | | [removed: 1,840.5] [added: 1,832.1] | | |

| Total assets | [added: | | 20,696.0 | | | | | |] 19,574.6 | | | | [added: | |] 13,501.2 | | | | [removed: 16,332.8] | | [added: 16,332.8] | | [removed: 15,701.6] | | | | [removed: 15,901.2] [added: 15,701.6] | | |

| Total debt | [added: | | 3,250.0 | | | | | |] 3,800.0 | | | | [added: | |] 4,300.0 | | | | [removed: 5,732.7] | | [added: 5,732.7] | | [removed: 6,391.8] | | | | [removed: 7,465.5] [added: 6,391.8] | | |

| Total operating lease liabilities | [removed: 6,258.8] | | [added: 6,413.7] | | [removed: —] | | | | [added: 6,258.8 | | | | | |] — | | | | [added: | |] — | | | | [added: | |] — | | |

| Shareholders’ equity | [added: | | 7,285.3 | | | | | |] 6,254.8 | | | | [added: | |] 5,642.9 | | | | [removed: 7,182.3] | | [added: 7,182.3] | | [removed: 5,389.5] | | | | [removed: 4,406.9] [added: 5,389.5] | | |

| Selected Operating Data: | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Number of stores open at end of period | [added: | | 15,685 | | | | | |] 15,288 | | | | [added: | |] 15,237 | | | | [removed: 14,835] | | [added: 14,835] | | [removed: 14,334] | | | | [removed: 13,851] [added: 14,334] | | |

| Dollar Tree | [added: | | 7,805 | | | | | |] 7,505 | | | | [added: | |] 7,001 | | | | [removed: 6,650] | | [added: 6,650] | | [removed: 6,360] | | | | [removed: 5,954] [added: 6,360] | | |

| Family Dollar | [added: | | 7,880 | | | | | |] 7,783 | | | | [added: | |] 8,236 | | | | [removed: 8,185] | | [added: 8,185] | | [removed: 7,974] | | | | [removed: 7,897] [added: 7,974] | | |

| Gross square footage at end of period | [added: | | 154.5 | | | | | |] 149.8 | | | | [added: | |] 148.3 | | | | [removed: 143.9] | | [added: 143.9] | | [removed: 138.8] | | | | [removed: 132.1] [added: 138.8] | | |

| Dollar Tree | [added: | | 84.0 | | | | | |] 80.6 | | | | [added: | |] 75.4 | | | | [removed: 71.6] | | [added: 71.6] | | [removed: 68.5] | | | | [removed: 64.2] [added: 68.5] | | |

| Family Dollar | [added: | | 70.5 | | | | | |] 69.2 | | | | [added: | |] 72.9 | | | | [removed: 72.3] | | [added: 72.3] | | [removed: 70.3] | | | | [removed: 67.9] [added: 70.3] | | |

| Selling square footage at end of period | [added: | | 125.1 | | | | | |] 121.3 | | | | [added: | |] 120.1 | | | | [removed: 116.6] | | [added: 116.6] | | [removed: 112.4] | | | | [removed: 108.4] [added: 112.4] | | |

| Dollar Tree | [added: | | 67.4 | | | | | |] 64.6 | | | | [added: | |] 60.3 | | | | [removed: 57.3] | | [added: 57.3] | | [removed: 54.7] | | | | [removed: 51.3] [added: 54.7] | | |

| Family Dollar | [added: | | 57.7 | | | | | |] 56.7 | | | | [added: | |] 59.8 | | | | [removed: 59.3] | | [added: 59.3] | | [removed: 57.7] | | | | [removed: 57.1] [added: 57.7] | | |

| Selling square footage annual [removed: growth(3)] [added: growth] | [removed: 1.0] | | [added: 3.1 | |] % | | [removed: 3.0] | | [added: 1.0 | |] % | | [removed: 3.7] | | [added: 3.0 | |] % | | [added: | |] 3.7 | | % | | [removed: 10.3] | | [added: 3.7 | |] % |

| Net sales annual [removed: growth(2)] [added: growth1] | [removed: 3.5] | | [added: 8.0 | |] % | | [removed: 2.6] | | [added: 3.5 | |] % | | [removed: 7.4] | | [added: 2.6 | |] % | | [removed: 8.6] | | [added: 7.4 | |] % | | [removed: 8.5] | | [added: 8.6 | |] % |

| Comparable store net sales [removed: increase(2)] [added: increase1] | [removed: 1.8] | | [added: 6.1 | |] % | | [removed: 1.7] | | [added: 1.8 | |] % | | [removed: 1.9] | | [added: 1.7 | |] % | | [removed: 1.8] | | [added: 1.9 | |] % | | [removed: 2.1] | | [added: 1.8 | |] % |

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| | | | Year Ended | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | January 30, 2021 | | | | | | February 1, 2020 | | | | | | February 2, 2019 | | | | | | February 3, 2018 | | | | | | January 28, 2017 | | |

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| | | | As of | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | January 30, 2021 | | | | | | February 1, 2020 | | | | | | February 2, 2019 | | | | | | February 3, 2018 | | | | | | January 28, 2017 | | |

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| | | | Year Ended | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | January 30, 2021 | | | | | | February 1, 2020 | | | | | | February 2, 2019 | | | | | | February 3, 2018 | | | | | | January 28, 2017 | | |

______________

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.

| | | | | | | | | | | | | | | | | | | | |

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| | As of | | | | | | | | | | | | | | | | | | |

(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.

(3) Family Dollar was included in the determination of these items for the years ended January 28, 2017 and forward

| | [added: | |] Page | [added: | |]

| [Report of Independent Registered Public Accounting [removed: Firm](#sC766BC313F1F5FA5A80C47E4930CDFBA)] [added: Firm](#i34150ea8cda34020a5183785f78b37f0_52)] | [removed: [39](#sC766BC313F1F5FA5A80C47E4930CDFBA)] | [added: | [43](#i34150ea8cda34020a5183785f78b37f0_52) | | |]

| [Consolidated Statements of [removed: Operations](#s2995F0A77A035888BC1E1C24CE213D90)] [added: Operations](#i34150ea8cda34020a5183785f78b37f0_55)] | [removed: [42](#s2995F0A77A035888BC1E1C24CE213D90)] | [added: | [45](#i34150ea8cda34020a5183785f78b37f0_55) | | |]

| [Consolidated Statements of Comprehensive Income [removed: (Loss)](#s6B8656A9B0245D51AEEFF5D0A8F44E59)] [added: (Loss)](#i34150ea8cda34020a5183785f78b37f0_58)] | [removed: [43](#s6B8656A9B0245D51AEEFF5D0A8F44E59)] | [added: | [46](#i34150ea8cda34020a5183785f78b37f0_58) | | |]

| [Consolidated Balance [removed: Sheets](#s6F5A2B41D0F05BD898D4D72E52302CC0)] [added: Sheets](#i34150ea8cda34020a5183785f78b37f0_61)] | [removed: [44](#s6F5A2B41D0F05BD898D4D72E52302CC0)] | [added: | [47](#i34150ea8cda34020a5183785f78b37f0_61) | | |]

| [Consolidated Statements of Shareholders’ [removed: Equity](#s0D14170E74D751C9BE66E62E06841B1D)] [added: Equity](#i34150ea8cda34020a5183785f78b37f0_67)] | [removed: [45](#s0D14170E74D751C9BE66E62E06841B1D)] | [added: | [48](#i34150ea8cda34020a5183785f78b37f0_67) | | |]

| [Consolidated Statements of Cash [removed: Flows](#s2E050E4B3AB95558B816ACC926CE8DAB)] [added: Flows](#i34150ea8cda34020a5183785f78b37f0_70)] | [removed: [46](#s2E050E4B3AB95558B816ACC926CE8DAB)] | [added: | [49](#i34150ea8cda34020a5183785f78b37f0_70) | | |]

| [Notes to Consolidated Financial [removed: Statements](#sB1B5C54318D75316AF754B180D5FCA2C)] [added: Statements](#i34150ea8cda34020a5183785f78b37f0_73)] | [removed: [47](#sB1B5C54318D75316AF754B180D5FCA2C)] | [added: | [50](#i34150ea8cda34020a5183785f78b37f0_73) | | |]

| [Note 1 - Summary of Significant Accounting [removed: Policies](#s44DBBA51B51257EF8E5CDC6BFD11DD21)] [added: Policies](#i34150ea8cda34020a5183785f78b37f0_76)] | [removed: [47](#s44DBBA51B51257EF8E5CDC6BFD11DD21)] | [added: | [50](#i34150ea8cda34020a5183785f78b37f0_76) | | |]

[removed: | [Note] [added: Note] 2 - [added: Supplemental] Balance Sheet [removed: Components](#s09BA238C0DEA5E1FB5C83174C65A27EF) | [52](#s09BA238C0DEA5E1FB5C83174C65A27EF) |][added: Information]

| [Note 3 - Goodwill and Nonamortizing Intangible [removed: Assets](#s40F9597518475932B02E99620A8751BC)] [added: Assets](#i34150ea8cda34020a5183785f78b37f0_85)] | [removed: [53](#s40F9597518475932B02E99620A8751BC)] | [added: | [54](#i34150ea8cda34020a5183785f78b37f0_85) | | |]

| [Note 4 - Income [removed: Taxes](#sE2E91EA05F8C5B6CB08FA10B27657BFE)] [added: Taxes](#i34150ea8cda34020a5183785f78b37f0_91)] | [removed: [53](#sE2E91EA05F8C5B6CB08FA10B27657BFE)] | [added: | [55](#i34150ea8cda34020a5183785f78b37f0_91) | | |]

| [Note 5 - Commitments and [removed: Contingencies](#sDACE5645EBB956EA9DB2B669A680CA0C)] [added: Contingencies](#i34150ea8cda34020a5183785f78b37f0_94)] | [removed: [56](#sDACE5645EBB956EA9DB2B669A680CA0C)] | [added: | [57](#i34150ea8cda34020a5183785f78b37f0_94) | | |]

| [Note 6 - Long-Term [removed: Debt](#sB1391420DB055847A02556B11F33A730)] [added: Debt](#i34150ea8cda34020a5183785f78b37f0_97)] | [removed: [58](#sB1391420DB055847A02556B11F33A730)] | [added: | [59](#i34150ea8cda34020a5183785f78b37f0_97) | | |]

| [Note 7 - [removed: Leases](#s6400be59a095448686abd25d486ad843)] [added: Leases](#i34150ea8cda34020a5183785f78b37f0_103)] | [removed: [60](#s6400be59a095448686abd25d486ad843)] | [added: | [61](#i34150ea8cda34020a5183785f78b37f0_103) | | |]

| [Note 8 - Fair Value [removed: Measurements](#s592359A38ED257B2BD8156CEFEA4988B)] [added: Measurements](#i34150ea8cda34020a5183785f78b37f0_106)] | [removed: [61](#s592359A38ED257B2BD8156CEFEA4988B)] | [added: | [62](#i34150ea8cda34020a5183785f78b37f0_106) | | |]

| [Note 9 - Shareholders’ [removed: Equity](#s168C12684FDF5A998A79AD325E689539)] [added: Equity](#i34150ea8cda34020a5183785f78b37f0_109)] | [removed: [62](#s168C12684FDF5A998A79AD325E689539)] | [added: | [63](#i34150ea8cda34020a5183785f78b37f0_109) | | |]

| [Note 10 - Employee Benefit [removed: Plans](#s00532156B49450C9998589B7B0F0BE22)] [added: Plans](#i34150ea8cda34020a5183785f78b37f0_115)] | [removed: [63](#s00532156B49450C9998589B7B0F0BE22)] | [added: | [63](#i34150ea8cda34020a5183785f78b37f0_115) | | |]

| [Note 11 - Stock-Based Compensation [removed: Plans](#s7DF970E79E12504B9F4EBE6E57F3CD6A)] [added: Plans](#i34150ea8cda34020a5183785f78b37f0_121)] | [removed: [63](#s7DF970E79E12504B9F4EBE6E57F3CD6A)] | [added: | [64](#i34150ea8cda34020a5183785f78b37f0_121) | | |]

| [Note 13 - Quarterly Financial Information [removed: (Unaudited)](#sA4522503DC875332B2029B4E80E4A7CB)] [added: (Unaudited)](#i34150ea8cda34020a5183785f78b37f0_133)] | [removed: [68](#sA4522503DC875332B2029B4E80E4A7CB)] | [added: | [68](#i34150ea8cda34020a5183785f78b37f0_133) | | |]

We have audited the accompanying consolidated balance sheets of Dollar Tree, Inc. and subsidiaries (the Company) as of [removed: February 1, 2020] [added: January 30, 2021] and February [removed: 2, 2019,] [added: 1, 2020,] the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three‑year period ended [removed: February 1, 2020,] [added: January 30, 2021,] and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of [removed: February 1, 2020] [added: January 30, 2021] and February [removed: 2, 2019,] [added: 1, 2020,] and the results of its operations and its cash flows for each of the years in the three‑year period ended [removed: February 1, 2020,] [added: January 30, 2021,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of [removed: February 1, 2020,] [added: January 30, 2021,] based on criteria established in *Internal Control [removed: -] [added: –] Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March [removed: 20, 2020] [added: 16, 2021] expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

[removed: *Assessment of the carrying value] [added: *Valuation] of goodwill and trade name intangible asset in the Family Dollar operating segment*

Of this amount, the goodwill balance for the Family Dollar reporting unit, which is also the Family Dollar operating segment, was $1.6 [removed: billion, after the effect of a $313 million current year impairment.][added: billion.]

The Family Dollar trade name intangible asset was $3.1 billion as of [removed: February 1, 2020.][added: January 30, 2021.]

We identified the assessment of the [removed: carrying value] [added: valuation] of goodwill and trade name [added: intangible asset] in the Family Dollar operating segment as a critical audit matter.

The assumptions utilized to calculate the fair value of the operating segment, which included revenue growth [removed: rates; earnings before interest, taxes, depreciation and amortization (EBITDA) margins;] [added: rates] and discount rate, as well as the assumptions used to calculate the fair value of the trade name intangible asset, which included revenue growth rates, discount rate, and royalty [removed: rate (collectively “key assumptions”) involved] [added: rate, required] subjective auditor judgment.

Minor changes to [removed: those key] [added: these] assumptions could have a significant effect on the assessment of the carrying value of the goodwill and trade [removed: name] [added: name,] which resulted [removed: in a high degree of subjectivity in performing the associated audit procedures.]

The [added: following are the] primary procedures we performed to address this critical audit [removed: matter included the following.][added: matter.]

We [added: evaluated the design and] tested [added: the operating effectiveness of] certain internal controls over the Company’s goodwill and trade name impairment assessment process, including controls related to the determination of the fair value of the assets, the development of the revenue growth rates, [removed: EBITDA margins, and the assumptions used to develop the] discount [removed: rates] [added: rates,] and royalty rate.

We performed [added: a] sensitivity [removed: analyses] [added: analysis] over [removed: certain key] [added: the revenue growth rate] assumptions to assess their impact on the Company’s determination of the fair values of the Family Dollar reporting unit and the trade name intangible asset.

[removed: We] [added: To assess the Company’s ability to accurately forecast, we] compared the Company’s historical forecasts to actual [removed: results to assess the Company’s ability to accurately forecast.][added: results.]

[removed: | • |] [added: -] evaluating the Company’s revenue growth rates [removed: and EBITDA margins] based on publicly available market data for comparable entities; [removed: |]

[removed: | • |] [added: -] assessing the Company’s discount rates and royalty rate by comparing the Company’s inputs to the discount and royalty rates to publicly available market data for comparable companies and assessing the resulting rates; and [removed: |]

[removed: | • |] [added: -] evaluating (1) the Family Dollar operating segment’s fair value using the related cash flow forecast and discount rate, as well as (2) the trade name’s fair value using the related discount rate and royalty rate, and comparing the results to the Company’s fair value estimate. [removed: |]

[removed: *Evaluation of estimated] [added: *Estimated] self-insurance liability*

As of [removed: February 1, 2020,] [added: January 30, 2021,] the Company recorded an estimated liability of [removed: $310] [added: $319] million.

[removed: We tested certain internal controls over the Company’s self-insurance liability estimation process, including] [added: This included] controls related to (1) the selection of the actuarial [removed: methods] [added: methods,] and [removed: (2)] the development of the [removed: key assumptions] [added: loss development factors and expected loss rates] used to calculate the liability, [removed: including] [added: and (2)] the [added: completeness and accuracy of] historical claims paid and incurred data.

We assessed the Company’s estimate of the liability by testing [removed: the underlying data, including] a selection of [added: certain data, including] claims data, utilized by the Company’s actuary by comparing it to relevant [removed: underlying] documentation.