Item 8. Financial Statements and Supplementary Data

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

			Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 185)			39
Consolidated Statements of Operations			41
Consolidated Statements of Comprehensive Income (Loss)			42
Consolidated Balance Sheets			43
Consolidated Statements of Shareholders’ Equity			44
Consolidated Statements of Cash Flows			45
Notes to Consolidated Financial Statements			46
Note 1 - Description of Business and Basis of Presentation			46
Note 2 - Summary of Significant Accounting Policies			46
Note 3 - Supplemental Balance Sheet Information			51
Note 4 - Income Taxes			52
Note 5 - Commitments and Contingencies			54
Note 6 - Short-Term Borrowings and Long-Term Debt			56
Note 7 - Leases			57
Note 8 - Fair Value Measurements			58
Note 9 - Shareholders’ Equity			59
Note 10 - Stock-Based Compensation Plans			59
Note 11 - Earnings (Loss) Per Share			63
Note 12 - Employee Benefit Plan			63
Note 13 - Segments and Disaggregated Revenue			64
Note 14 - Supply Chain Finance Program			66
Note 15 - Discontinued Operations			66
Note 16 - Subsequent Events			69
Note 17 – Quarterly Financial Information (Unaudited)			69

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Dollar Tree, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Dollar Tree, Inc. and subsidiaries (the Company) as of February 1, 2025 and February 3, 2024, 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 February 1, 2025, 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 February 1, 2025 and February 3, 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended February 1, 2025, 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 February 1, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 26, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Evaluation of estimated self-insurance liability

As discussed in Note 2 to the consolidated financial statements, the Company considers actuarial assumptions to estimate its self-insurance liability. As of February 1, 2025, the Company recorded an estimated liability of $244.3 million related to continuing operations and $185.0 million related to discontinued operations.

We identified the evaluation of the estimated self-insurance liability as a critical audit matter. The estimation process involves auditor judgment and actuarial expertise to evaluate the actuarial methods and assumptions that are used to estimate future claim payments. Specifically, the evaluation includes the assumptions related to the loss development factors and expected loss rates which are primarily driven by historical claims paid and incurred data.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s self-insurance liability estimation process. This included controls related to (1) the selection of the actuarial methods, and the development of the loss development factors and expected loss rates used to calculate the liability, and (2) the completeness and accuracy of historical claims paid and incurred data. We assessed the Company’s estimate of the liability by testing a selection of certain data, including claims data, utilized by the Company’s actuary by comparing it to relevant documentation. We involved actuarial professionals with specialized skills and knowledge, who assisted in:

• assessing the Company’s actuarial methods by comparing them to generally accepted actuarial methodologies

• evaluating the Company’s actuarial estimates and assumptions related to the loss development factors and expected loss rates, by comparing them to generally accepted actuarial methodologies and the Company’s historical data and trends.

Trade name intangible asset impairment

As discussed in Notes 2 and 15 to the consolidated financial statements, the Company performs trade name intangible asset impairment testing on an annual basis and when events and changes in circumstances indicate possible impairment of the asset. To estimate the fair value of the Family Dollar trade name intangible asset (Family Dollar trade name), the Company uses the relief-from-royalty method. The impairment charge for the year ended February 1, 2025 was $1,400.0 million for the Family Dollar trade name.

We identified the evaluation of the Company’s fair value of the Family Dollar trade name as a critical audit matter. Subjective auditor judgment and specialized skills and knowledge were required to evaluate the key assumptions used to estimate the fair value of the Family Dollar trade name, specifically the revenue growth rates, discount rate, and company-specific royalty rate. Minor changes to certain of these assumptions could have a significant effect on the fair value and the resulting assessment of the carrying value of the Family Dollar trade name.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the intangible asset impairment process, including controls related to the determination and development of the identified assumptions. We assessed the Company’s ability to forecast by comparing the Company’s historical forecasts to actual results. We evaluated the revenue growth rates by comparing them to historical results and performing sensitivity analyses. We involved valuation professionals with specialized skills and knowledge, who assisted in:

• evaluating the revenue growth rates by comparing them to publicly available market data for comparable companies

• assessing the discount rate by comparing it to a range of discount rates developed using publicly available market data for comparable companies

• assessing the company-specific royalty rate by comparing it to publicly available market data for comparable licensing agreements.

/s/ KPMG LLP

We have served as the Company’s auditor since 1987.

Virginia Beach, Virginia

March 26, 2025

DOLLAR TREE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

						Year Ended
(in millions, except per share data)						February 1, 2025						February 3, 2024						January 28, 2023
Net sales						$	17,565.8					$	16,770.3					$	15,405.7
Other revenue						12.7						10.8						5.8
Total revenue						17,578.5						16,781.1						15,411.5
Cost of sales						11,284.1						10,761.4						9,630.2
Selling, general and administrative expenses						4,832.4						4,245.2						3,682.0
Operating income						1,462.0						1,774.5						2,099.3
Interest expense, net						107.5						112.5						127.2
Other (income) expense, net						(29.1)						0.1						0.4
Income from continuing operations before income taxes						1,383.6						1,661.9						1,971.7
Provision for income taxes						341.1						396.1						471.6
Income from continuing operations						1,042.5						1,265.8						1,500.1
Income (loss) from discontinued operations, net of tax						(4,072.6)						(2,264.2)						115.3
Net income (loss)						$	(3,030.1)					$	(998.4)					$	1,615.4
Basic earnings (loss) per share of common stock:
Continuing operations						$	4.83					$	5.77					$	6.72
Discontinued operations						(18.88)						(10.32)						0.52
Total basic earnings (loss) per share of common stock						$	(14.05)					$	(4.55)					$	7.24
Diluted earnings (loss) per share of common stock:
Continuing operations						$	4.83					$	5.76					$	6.70
Discontinued operations						(18.86)						(10.30)						0.51
Total diluted earnings (loss) per share of common stock						$	(14.03)					$	(4.54)					$	7.21
Weighted average common shares outstanding:
Basic						215.7						219.5						223.2
Diluted						215.9						219.9						224.1

See accompanying Notes to Consolidated Financial Statements

DOLLAR TREE, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

						Year Ended
(in millions)						February 1, 2025						February 3, 2024						January 28, 2023
Net income (loss)						$	(3,030.1)					$	(998.4)					$	1,615.4
Foreign currency translation adjustments						(15.6)						(2.4)						(6.0)
Total comprehensive income (loss)						$	(3,045.7)					$	(1,000.8)					$	1,609.4

See accompanying Notes to Consolidated Financial Statements

DOLLAR TREE, INC.

CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share data)						February 1, 2025						February 3, 2024
ASSETS
Current assets:
Cash and cash equivalents						$	1,256.5					$	425.2
Merchandise inventories						2,672.0						2,495.8
Other current assets						169.8						141.3
Current assets of discontinued operations						5,008.9						3,070.4
Total current assets						9,107.2						6,132.7
Restricted cash						75.7						72.3
Property, plant and equipment, net of accumulated depreciation of $4,332.3 and $4,231.4, respectively						4,499.3						3,822.1
Operating lease right-of-use assets						4,146.4						3,672.7
Goodwill						421.2						423.3
Deferred income taxes, net						260.6						9.0
Other assets						133.6						99.4
Noncurrent assets of discontinued operations						—						7,792.0
Total assets						$	18,644.0					$	22,023.5
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt						$	1,000.0					$	—
Current portion of operating lease liabilities						960.7						899.8
Accounts payable						1,705.8						1,167.1
Income taxes payable						120.1						52.7
Other current liabilities						574.4						578.3
Current liabilities of discontinued operations						4,224.9						1,998.8
Total current liabilities						8,585.9						4,696.7
Long-term debt, net, excluding current portion						2,431.2						3,426.3
Operating lease liabilities, long-term						3,438.7						3,042.3
Deferred income taxes, net						—						841.1
Income taxes payable, long-term						28.2						22.0
Other liabilities						182.6						143.5
Noncurrent liabilities of discontinued operations						—						2,538.5
Total liabilities						14,666.6						14,710.4
Commitments and contingencies (Note 5)
Shareholders’ equity:
Common stock, par value $0.01; 600,000,000 shares authorized, 215,078,018 and 217,907,206 shares issued and outstanding at February 1, 2025 and February 3, 2024, respectively						2.2						2.2
Additional paid-in capital						92.9						229.9
Accumulated other comprehensive loss						(59.2)						(43.6)
Retained earnings						3,941.5						7,124.6
Total shareholders’ equity						3,977.4						7,313.1
Total liabilities and shareholders’ equity						$	18,644.0					$	22,023.5

See accompanying Notes to Consolidated Financial Statements

DOLLAR TREE, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

YEARS ENDED FEBRUARY 1, 2025, FEBRUARY 3, 2024, AND JANUARY 28, 2023

(in millions)						Common Stock Shares						Common Stock						Additional Paid-in Capital						Accumulated Other Comprehensive Loss						Retained Earnings						Shareholders’ Equity
Balance at January 29, 2022						225.1						$	2.2					$	1,243.9					$	(35.2)					$	6,507.6					$	7,718.5
Net income						—						—						—						—						1,615.4						1,615.4
Total other comprehensive loss						—						—						—						(6.0)						—						(6.0)
Issuance of stock under Employee Stock Purchase Plan						0.1						—						9.3						—						—						9.3
Stock-based compensation, net						0.6						—						61.8						—						—						61.8
Repurchase of stock						(4.6)						—						(647.5)						—						—						(647.5)
Balance at January 28, 2023						221.2						2.2						667.5						(41.2)						8,123.0						8,751.5
Net loss						—						—						—						—						(998.4)						(998.4)
Total other comprehensive loss						—						—						—						(2.4)						—						(2.4)
Issuance of stock under Employee Stock Purchase Plan						—						—						9.9						—						—						9.9
Exercise of stock options						—						—						0.1						—						—						0.1
Stock-based compensation, net						0.6						—						56.7						—						—						56.7
Repurchase of stock						(3.9)						—						(500.0)						—						—						(500.0)
Excise tax on repurchase of stock						—						—						(4.3)						—						—						(4.3)
Balance at February 3, 2024						217.9						2.2						229.9						(43.6)						7,124.6						7,313.1
Net loss						—						—						—						—						(3,030.1)						(3,030.1)
Total other comprehensive loss						—						—						—						(15.6)						—						(15.6)
Issuance of stock under Employee Stock Purchase Plan						0.1						—						9.7						—						—						9.7
Exercise of stock options						—						—						0.1						—						—						0.1
Stock-based compensation, net						0.4						—						103.8						—						—						103.8
Repurchase of stock						(3.3)						—						(247.0)						—						(153.0)						(400.0)
Excise tax on repurchase of stock						—						—						(3.6)						—						—						(3.6)
Balance at February 1, 2025						215.1						$	2.2					$	92.9					$	(59.2)					$	3,941.5					$	3,977.4

See accompanying Notes to Consolidated Financial Statements

DOLLAR TREE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

						Year Ended
(in millions)						February 1, 2025						February 3, 2024						January 28, 2023
Cash flows from operating activities:
Net income (loss)						$	(3,030.1)					$	(998.4)					$	1,615.4
Income (loss) from discontinued operations, net of tax						(4,072.6)						(2,264.2)						115.3
Income from continuing operations						$	1,042.5					$	1,265.8					$	1,500.1
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Depreciation and amortization						526.9						400.5						365.3
Provision for deferred income taxes						49.3						55.1						55.2
Stock-based compensation expense						106.9						76.3						91.5
Impairments						52.1						10.9						1.5
Other non-cash adjustments to income from continuing operations						20.0						8.6						9.6
Changes in operating assets and liabilities:
Merchandise inventories						(182.6)						488.2						(712.1)
Other current assets						(32.8)						(37.9)						(6.2)
Other assets						(78.1)						(54.5)						(13.0)
Accounts payable						541.4						87.9						87.7
Income taxes payable						110.6						67.2						19.6
Other current liabilities						14.4						92.4						15.7
Other liabilities						45.4						14.5						(9.0)
Operating lease right-of-use assets and liabilities, net						(22.7)						(74.2)						12.0
Net cash provided by operating activities of continuing operations						2,193.3						2,400.8						1,417.9
Cash flows from investing activities:
Capital expenditures						(1,300.5)						(1,193.8)						(639.0)
Proceeds from insurance recoveries						50.0						—						—
Proceeds from (payments for) fixed asset disposition						1.1						(1.0)						(4.7)
Net cash used in investing activities of continuing operations						(1,249.4)						(1,194.8)						(643.7)
Cash flows from financing activities:
Proceeds from revolving credit facility						—						—						555.0
Repayments of revolving credit facility						—						—						(555.0)
Proceeds from commercial paper notes						3,206.1						1,067.9						—
Repayments of commercial paper notes						(3,206.1)						(1,067.9)						—
Proceeds from stock issued pursuant to stock-based compensation plans						9.8						10.0						9.3
Cash paid for taxes on exercises/vesting of stock-based compensation						(21.1)						(40.0)						(48.6)
Payments for repurchase of stock						(400.0)						(500.0)						(647.5)
Net cash used in financing activities						(411.3)						(530.0)						(686.8)
Cash flows from discontinued operations:
Net cash provided by operating activities of discontinued operations						669.2						283.7						196.9
Net cash used in investing activities of discontinued operations						(446.0)						(912.8)						(610.1)
Net cash provided by (used in) discontinued operations						223.2						(629.1)						(413.2)
Effect of exchange rate changes on cash, cash equivalents and restricted cash						(1.8)						(1.0)						(1.2)
Net change in cash, cash equivalents and restricted cash						754.0						45.9						(327.0)
Cash, cash equivalents and restricted cash at beginning of year						757.2						711.3						1,038.3
Cash, cash equivalents and restricted cash at end of year						$	1,511.2					$	757.2					$	711.3
Supplemental disclosure of cash flow information(1):
Cash paid for:
Interest, net of amounts capitalized						$	132.8					$	131.4					$	132.2
Income taxes						$	175.9					$	274.0					$	401.3
Non-cash transactions:
Right-of-use assets obtained in exchange for new operating lease liabilities						$	1,753.5					$	1,893.1					$	1,538.3
Accrued capital expenditures						$	74.5					$	138.8					$	86.6
(1) Supplemental disclosures are inclusive of activity for both continuing and discontinued operations.

See accompanying Notes to Consolidated Financial Statements

DOLLAR TREE, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Description of Business and Basis of Presentation

Description of Business

Dollar Tree, Inc. (“we,” “our,” “us,” or “the Company”) is a leading operator of discount retail stores in the United States and Canada.

Basis of Presentation

The accompanying consolidated financial statements include the financial statements of Dollar Tree, Inc., and its wholly-owned subsidiaries and were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany balances and transactions have been eliminated in consolidation. All amounts stated herein are in U.S. Dollars. Continuing operations consists of the Dollar Tree segment and corporate, support and other.

Fiscal Year

Our fiscal year is a 52-week or 53-week period ending on the Saturday closest to January 31. References to “fiscal 2026,” “fiscal 2025,” “fiscal 2024,” and “fiscal 2022,” relate to the 52-week fiscal years ended January 30, 2027, January 31, 2026, February 1, 2025, and January 28, 2023, respectively. References to “fiscal 2023” relate to the 53-week fiscal year ended February 3, 2024.

Note 2 - Summary of Significant Accounting Policies

Assets Held for Sale and Discontinued Operations

In accordance with Accounting Standards Codification (“ASC”) Subtopic 205-20 “Discontinued Operations,” a business is classified as held for sale when management having the authority to approve the action commits to a plan to sell the business, the business is available for immediate sale in its present condition and an active program to locate a buyer has been initiated. Additionally, the sale must be probable to occur during the next 12 months at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate it is unlikely significant changes to the plan will be made or the plan will be withdrawn. A business classified as held for sale is recorded at the lower of (i) its carrying amount and (ii) estimated fair value less costs to sell. When the carrying amount of the business exceeds its estimated fair value less costs to sell, a loss is recognized and updated each reporting period as appropriate. Assets held for sale are not depreciated or amortized.

The results of operations of businesses classified as held for sale are reported as discontinued operations if the disposal represents a strategic shift that will have a major effect on the entity’s operations and financial results. When a business is identified for discontinued operations reporting: (i) results for prior periods are retrospectively reclassified as discontinued operations; (ii) results of operations are reported in a single line, net of tax, in the consolidated statement of operations; and (iii) assets and liabilities are reported as held for sale in the consolidated balance sheets in the period in which the business is classified as held for sale.

As previously reported, in fiscal 2024 the Company initiated a formal review of strategic alternatives for the Family Dollar business. This strategic alternatives review concluded in the fourth quarter of fiscal 2024 and resulted in the decision to sell the Family Dollar business. The Company concluded the assets of the Family Dollar business met the criteria for classification as held for sale during the fourth quarter of fiscal 2024. Additionally, the Company determined the ultimate disposal will represent a strategic shift that will have a major effect on our operations and financial results. As such, the results of Family Dollar are presented as discontinued operations in the accompanying Consolidated Statements of Operations for all periods presented. Prior periods have been adjusted to conform to the current presentation. The assets and liabilities of Family Dollar have been reflected as assets and liabilities of discontinued operations in the accompanying Consolidated Balance Sheets for all periods presented. The Company has ceased depreciating and amortizing its long-lived assets for Family Dollar which primarily includes right-of-use assets and property and equipment. On March 25, 2025, the Company entered into a definitive agreement to sell the Family Dollar business to Brigade Capital Management, LP and Macellum Capital Management, LLC, for a purchase consideration of $1,007.0 million, subject to a number of adjustments, including with respect to working capital and net indebtedness. The closing of the transaction is subject to satisfaction of customary closing conditions, including receipt of U.S. antitrust approval. Net proceeds are estimated to total approximately $804.0 million.

Unless otherwise noted, all amounts and disclosures included in these Notes to Consolidated Financial Statements reflect only our continuing operations. Refer to Note 15 for additional details on discontinued operations.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents at February 1, 2025 and February 3, 2024 includes $1,050.9 million and $225.2 million, respectively, of investments primarily in money market securities which are valued at cost, which approximates fair value. In accordance with ASC Topic 305 “Cash and Cash Equivalents,” we consider all highly-liquid debt instruments with original maturities of three months or less to be cash equivalents. The majority of payments due from financial institutions for the settlement of debit card and credit card transactions process within three business days, and therefore are classified as cash and cash equivalents.

Under our cash management system, payments issued but not presented to banks frequently result in book overdraft balances for accounting purposes and are classified within “Accounts payable” in the accompanying Consolidated Balance Sheets. Changes in the book overdraft position are presented within “Net cash provided by operating activities” within the Consolidated Statements of Cash Flows. The amount of these payments included in “Accounts Payable” as of February 1, 2025 and February 3, 2024 was $155.5 million and $50.3 million, respectively.

The Consolidated Statements of Cash Flows includes the cash flows of continuing and discontinued operations. The following is a reconciliation between “Cash and cash equivalents” and “Restricted cash” of continuing operations presented in the Consolidated Balance Sheets and the total cash, cash equivalents and restricted cash presented in the Consolidated Statements of Cash Flows:

(in millions)						February 1, 2025						February 3, 2024
Cash and cash equivalents on the Consolidated Balance Sheets						$	1,256.5					$	425.2
Restricted cash on the Consolidated Balance Sheets						75.7						72.3
Cash, cash equivalents and restricted cash of discontinued operations included in current and noncurrent assets of discontinued operations on the Consolidated Balance Sheets						179.0						259.7
Total cash, cash equivalents and restricted cash on the Consolidated Statements of Cash Flows						$	1,511.2					$	757.2

Merchandise Inventories

In accordance with ASC Topic 330 “Inventory,” merchandise inventories at our distribution centers are stated at the lower of cost or net realizable value, determined on a weighted-average cost basis. Cost is assigned to store inventories using the retail inventory method on a weighted-average basis. Under the retail inventory method, the valuation of inventories at cost and the resulting gross margins are computed by applying a calculated cost-to-retail ratio to the retail value of inventories.

Costs directly associated with warehousing and distribution are capitalized as merchandise inventories. Total warehousing and distribution costs capitalized into inventory amounted to $195.3 million and $166.9 million at February 1, 2025 and February 3, 2024, respectively.

Property, Plant and Equipment

In accordance with ASC Topic 360 “Property, Plant and Equipment,” property, plant and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the respective assets as follows:

Buildings			39 to 40 years
Building improvements			20 years
Furniture, fixtures and equipment, software			3 to 15 years
Leasehold improvements			Shorter of remaining lease term or related asset life

Depreciation is included in “Selling, general and administrative expenses” in the accompanying Consolidated Statements of Operations, with the exception of depreciation related to our merchandising and distribution-related assets which are included in “Cost of sales” in the accompanying Consolidated Statements of Operations.

Capitalized Interest

We capitalize interest on borrowed funds during the construction of certain property and equipment based on our weighted average borrowing rates in place while the projects are in progress. We capitalized $7.6 million, $5.9 million and $3.8 million of interest costs in the years ended February 1, 2025, February 3, 2024 and January 28, 2023, respectively.

Insurance Reserves and Restricted Cash

We utilize a combination of insurance and self-insurance programs, including a wholly-owned captive insurance entity, to provide for the potential liabilities for certain risks, including workers’ compensation, general liability and auto. Liabilities associated with the risks that are retained by us are not discounted and are estimated, in part, by considering claims experience, exposure and severity factors, historical loss development factors, and other actuarial assumptions. Our self-insurance liabilities associated with workers’ compensation, general liability and auto related to continuing operations are recorded within “Other current liabilities” and “Other liabilities” in the accompanying Consolidated Balance Sheets and amounted to $244.3 million and $187.0 million at February 1, 2025 and February 3, 2024, respectively. Self-insurance liabilities related to discontinued operations totaled $185.0 million and $176.5 million at February 1, 2025 and February 3, 2024, respectively.

Dollar Tree Insurance, Inc., a South Carolina-based wholly-owned captive insurance subsidiary of ours, charges the operating subsidiary companies premiums to insure the retained workers’ compensation, general liability and auto exposures. Pursuant to South Carolina insurance regulations, Dollar Tree Insurance, Inc. maintains certain levels of cash and cash equivalents related to its self-insured exposures.

We also maintain certain cash balances related to our insurance programs which are held in trust and restricted as to withdrawal or use. These amounts are reflected in “Restricted cash” in the accompanying Consolidated Balance Sheets and amounted to $75.7 million and $72.3 million at February 1, 2025 and February 3, 2024, respectively.

Lease Accounting

Our lease portfolio primarily consists of leases for our retail store locations, vehicles and trailers, as well as distribution center space and equipment. In accordance with ASC Topic 842 “Leases,” we determine if an arrangement is a lease at inception by evaluating whether the arrangement conveys the right to use an identified asset and whether we obtain substantially all of the economic benefits from and have the ability to direct the use of the asset. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets. We recognize expense for these leases on a straight-line basis over the lease term. For leases with an initial term in excess of 12 months, we determine the initial classification and measurement of the right-of-use (“ROU”) assets and lease liabilities at the lease commencement date and thereafter if modified. ROU assets represent our right to control the underlying assets under lease, over the contractual term. ROU assets and lease liabilities are recognized on the Consolidated Balance Sheets based on the present value of future minimum lease payments to be made over the lease term.

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate in determining the present value of future lease payments. Inputs to the calculation of our incremental borrowing rate include the valuations and yields of our outstanding senior notes and their credit spreads over comparable U.S. Treasury rates, adjusted to a collateralized basis by estimating the credit spread improvement that would result from an upgrade of one ratings classification. Most leases include one or more options to renew and the exercise of renewal options is at our sole discretion. We do not include renewal options in our determination of the lease term unless the renewals are deemed to be reasonably certain. Operating lease expense for lease payments not yet paid is recognized on a straight-line basis over the lease term. The operating lease ROU asset is reduced by lease incentives, which has the effect of lowering the operating lease expense. Operating lease ROU assets are periodically reviewed for impairment losses. We use the long-lived assets impairment guidance in ASC Subtopic 360-10 “Property, Plant, and Equipment - Overall,” to determine whether an ROU asset is impaired, and if so, the amount of the impairment loss to recognize.

We have real estate leases that typically include payments related to non-lease components, such as common area maintenance, as well as payments for real estate taxes and insurance which are not considered components of the lease. These payments are generally variable and based on actual costs incurred by the lessor. These costs are expensed as incurred as variable lease costs and excluded for the purpose of calculating the ROU asset and lease liability. A smaller number of real estate leases contain fixed payments for common area maintenance, real estate taxes and insurance. These fixed payments are considered part of the lease payment and included in the ROU asset and lease liability. In addition, certain of our lease agreements include rental payments based on a percentage of retail sales over contractual levels and others include rental payments adjusted periodically for inflation. These payments are expensed as incurred as variable lease costs. Our lease agreements do not contain any material residual value guarantees or material restrictive financial covenants.

Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of

In accordance with ASC Topic 360, we review our long-lived assets and certain identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets based on discounted cash flows or other readily available evidence of fair value, if any. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

In fiscal 2024, fiscal 2023 and fiscal 2022, we recorded impairment charges related to continuing operations of $52.1 million, $10.9 million and $1.4 million, respectively, to write down certain assets. These charges are recorded as a component of “Selling, general and administrative expenses” in the accompanying Consolidated Statements of Operations. Of the impairment charges recorded in fiscal 2024, approximately $44.0 million related to capitalized software costs for enterprise merchandising and store system projects that were not fully implemented and were cancelled in connection with the decision to sell the Family Dollar business.

Refer to Note 15 for discussion of impairment charges recorded related to discontinued operations.

Goodwill and Nonamortizing Intangible Assets

Goodwill and nonamortizing intangible assets, including trade names acquired in business combinations, are not amortized, but rather tested for impairment at least annually. In addition, goodwill and nonamortizing intangible assets are tested on an interim basis if an event or circumstance indicates that it is more likely than not that an impairment loss has been incurred. For both goodwill and nonamortizing intangible assets, we have the option to initially perform a qualitative assessment to determine whether it is more likely than not that an impairment exists. Alternatively, we may bypass the qualitative assessment in any given year and proceed directly to performing the quantitative impairment test. We perform our annual impairment testing of goodwill and nonamortizing intangible assets during the fourth quarter of each year. Our reporting units are determined in accordance with the provisions of ASC Topic 350, “Intangibles - Goodwill and Other.”

When a quantitative impairment test is performed for an acquired trade name, we compare the fair value, based on an income approach using the relief-from-royalty method, to its carrying value. If the carrying value of the asset exceeds its estimated fair value, an impairment loss is recognized in an amount equal to that excess.

When a quantitative impairment test is performed for goodwill, we estimate the fair value of the reporting unit using a combination of a market multiple method and a discounted cash flow method. We recognize goodwill impairment for the amount by which the reporting unit’s carrying amount exceeds its estimated fair value, not to exceed the total carrying amount of goodwill allocated to the reporting unit.

There were no impairments of goodwill associated with continuing operations in fiscal 2024, fiscal 2023 and fiscal 2022. Refer to Note 15 for information on goodwill and trade name intangible assets from discontinued operations, including the results of the impairment tests.

Revenue Recognition

We recognize revenue in accordance with ASC Topic 606 "Revenue from Contracts with Customers." Net sales consist of the net sales of merchandise in our stores. Revenue transactions associated with the sale of merchandise comprise a single performance obligation, which consists of the sale of products to customers. Revenue is recognized when we satisfy our performance obligations by transferring control of promised products to our customers, which occurs at a point in time. Sales taxes imposed on our revenues from product sales are presented on a net basis in the accompanying Consolidated Statements of Operations. Gift cards that we issue to customers are recorded as contract liabilities until they are redeemed in our stores, at which point revenue is recognized. We record reductions to revenue for discounts.

Cost of Sales

We include the cost of merchandise, warehousing and distribution costs, and certain occupancy costs in cost of sales.

Vendor Allowances

We receive vendor support in the form of cash payments or allowances through various reimbursements such as purchase discounts, markdowns and volume rebates. We have agreements with vendors setting forth the specific conditions for each allowance or payment. In accordance with ASC Subtopic 705-20 “Accounting for Consideration Received from a Vendor,” we either recognize the allowance as a reduction of current costs or defer the payment over the period the related merchandise is sold. If the payment is a reimbursement for costs incurred, it is offset against those related costs; otherwise, it is treated as a reduction to the cost of merchandise.

Pre-Opening Costs

We capitalize certain internal labor costs related to new, expanded, renovated, relocated and re-bannered stores after the project becomes probable and only when the costs are directly attributable to the preparation of the store-related assets for their intended use. We expense all other pre-opening costs related to our stores and distribution centers, as incurred.

Income Taxes

In accordance with ASC Topic 740 “Income Taxes,” income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date of such change. Deferred tax assets are reduced by valuation allowances when necessary. Assessing whether deferred tax assets are realizable requires significant judgment. We consider all available positive and negative evidence, including historical operating performance and expectations of future operating performance. The ultimate realization of deferred tax assets is often dependent upon future taxable income and therefore can be uncertain. To the extent we believe it is more likely than not that all or some portion of the asset will not be realized, valuation allowances are established against our deferred tax assets, which increase income tax expense in the period when such a determination is made. Income taxes include the largest amount of tax benefit for an uncertain tax position that is more likely than not to be sustained upon audit based on the technical merits of the tax position. Settlements with tax authorities, the expiration of statutes of limitations for particular tax positions or obtaining new information on particular tax positions may cause a change to the effective tax rate.

We have made the policy election to record any liability associated with Global Intangible Low Tax Income ("GILTI") in the period in which it is incurred.

We include interest and penalties in the provision for income tax expense and income taxes payable. We do not provide for any penalties associated with tax contingencies unless they are considered probable of assessment.

Stock-Based Compensation

We account for stock-based compensation in accordance with ASC Topic 718 “Compensation - Stock Compensation,” which requires all stock-based compensation awards granted to be measured at fair value and recognized as an expense in the financial statements over the service period. In addition, this guidance requires that excess tax benefits related to stock-based compensation awards be reflected as operating cash flows. We use the Black-Scholes option pricing model to estimate the fair market value of stock option awards and grant date fair value for restricted stock units. We use the "simplified method" to estimate the expected life of options, as permitted by accounting guidance. The "simplified method" calculates the expected life of a stock option equal to the time from grant to the midpoint between the vesting date and contractual term, taking into account all vesting tranches. The risk-free interest rate is based on the yield for the U.S. Treasury bill with a maturity equal to the expected life of the stock option. Expected volatility is based on our historical average. Compensation expense is recognized net of forfeitures on a straight-line basis over the total vesting period, which is the implied requisite service period, or a shorter period based on the retirement eligibility of the grantee. Compensation expense for performance-based awards is recorded over the implied requisite service period when achievement of the performance target is deemed probable. We issue new shares upon exercise of stock options and upon vesting of restricted stock units. Refer to Note 10 for further details on stock-based compensation.

Earnings Per Share

In accordance with ASC Topic 260 “Earnings Per Share,” basic earnings (loss) per share has been computed by dividing net income (loss) by the weighted average number of shares outstanding. Diluted earnings (loss) per share reflects the potential dilution that could occur assuming the inclusion of dilutive potential shares and has been computed by dividing net income (loss) by the weighted average number of shares and dilutive potential shares outstanding. Dilutive potential shares include all outstanding stock options and unvested restricted stock units after applying the treasury stock method. Diluted earnings per share of common stock from continuing operations, diluted earnings (loss) per share of common stock from discontinued operations and diluted earnings (loss) per share of common stock include the effect of dilutive potential shares based on applying the control number concept in ASC Topic 260. The control number concept requires that the same number of potentially dilutive securities applied in computing diluted earnings per share from continuing operations be applied to all other categories of income or loss, even if the effect is anti-dilutive.

Foreign Currency

The functional currencies of certain of our international subsidiaries are the local currencies of the countries in which the subsidiaries are located. In accordance with ASC Topic 830 “Foreign Currency Matters,” foreign currency denominated assets and liabilities are translated into U.S. dollars using the exchange rates in effect at the consolidated balance sheet date. Results of operations

and cash flows are translated using the average exchange rates throughout the period. Capital accounts are translated at historical foreign currency exchange rates. The effect of exchange rate fluctuations on translation of assets and liabilities is included as a component of shareholders’ equity in accumulated other comprehensive loss. Adjustments that arise from foreign currency exchange rate changes on transactions, primarily driven by intercompany transactions, denominated in a currency other than the functional currency are included in “Other (income) expense, net” in the accompanying Consolidated Statements of Operations. These adjustments have not historically been significant.

Recently Adopted Accounting Pronouncements

In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04 "Liabilities - Supplier Finance Programs (Subtopic 405-50)" ("ASU 2022-04") which requires entities to disclose the key terms of supplier finance programs used in connection with the purchase of goods and services along with information about their obligations under these programs, including a rollforward of those obligations. We adopted ASU 2022-04 in fiscal 2023 on a retrospective basis, except for the amendments relating to the rollforward requirement, which we adopted effective February 1, 2025 on a prospective basis. The adoption did not have a material impact on our consolidated financial statements. Refer to Note 14 for a discussion of our supply chain finance program and the rollforward of our outstanding payment obligations under the program.

In November 2023, the FASB issued ASU 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”) which requires disclosure of incremental segment information on an annual and interim basis, including enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss. ASU 2023-07 also requires entities to disclose the title and position of the CODM and explain how the CODM uses the reported measures of segment profit or loss in assessing performance and allocating resources. Further, it requires that all annual disclosures about a reportable segment’s profit or loss and assets currently required by Topic 280 be provided in interim periods. We adopted ASU 2023-07 effective February 1, 2025 on a retrospective basis. Refer to Note 13 for our segment disclosures.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”) which requires entities to disclose specific categories and greater disaggregation of information in the effective tax rate reconciliation, as well as disaggregated disclosure of income taxes paid, pretax income and income tax expense by jurisdiction. The standard also removes certain disclosure requirements that currently exist under Topic 740. ASU 2023-09 is effective on a prospective basis for annual periods beginning in fiscal 2025, with retrospective application permitted. We are currently evaluating the impact of this standard to our consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03 “Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”) which requires disaggregated disclosure of certain costs and expenses, including purchases of inventory, employee compensation, depreciation, amortization and depletion, within relevant income statement captions. ASU 2024-03 is effective on a prospective basis for annual periods beginning in fiscal 2027 and for interim periods beginning in fiscal 2028, with retrospective application permitted. We are currently evaluating the impact of this standard to our consolidated financial statements.

Note 3 - Supplemental Balance Sheet Information

Property, Plant and Equipment, Net

Property, plant and equipment, net, as of February 1, 2025 and February 3, 2024 consists of the following:

(in millions)						February 1, 2025						February 3, 2024
Land						$	162.7					$	161.3
Buildings						1,403.3						1,229.2
Leasehold improvements						2,766.8						2,396.1
Furniture, fixtures and equipment						3,589.1						3,242.6
Construction in progress						909.7						1,024.3
Total property, plant and equipment						8,831.6						8,053.5
Less: accumulated depreciation						4,332.3						4,231.4
Total property, plant and equipment, net						$	4,499.3					$	3,822.1

Depreciation expense was $524.8 million, $400.6 million, and $365.3 million for the years ended February 1, 2025, February 3, 2024, and January 28, 2023, respectively.

Accrued capital expenditures were $61.1 million, $82.2 million, and $31.7 million at February 1, 2025, February 3, 2024, and January 28, 2023, respectively.

Other Current Liabilities

Other current liabilities as of February 1, 2025 and February 3, 2024 consist of the following:

(in millions)						February 1, 2025						February 3, 2024
Taxes (other than income taxes)						$	120.2					$	145.8
Compensation and benefits						157.6						164.5
Insurance						99.0						77.3
Other						197.6						190.7
Total other current liabilities						$	574.4					$	578.3

Note 4 - Income Taxes

The provision for income taxes consists of the following:

						Year Ended
(in millions)						February 1, 2025						February 3, 2024						January 28, 2023
Current taxes:
Federal						$	238.0					$	279.1					$	342.1
State						53.6						61.9						74.2
Foreign						0.2						—						0.1
Total current taxes						291.8						341.0						416.4
Deferred taxes:
Federal						37.7						38.8						42.1
State						5.8						10.4						8.6
Foreign						5.8						5.9						4.5
Total deferred taxes						49.3						55.1						55.2
Provision for income taxes						$	341.1					$	396.1					$	471.6

Cash paid for income taxes related to continuing operations totaled $175.9 million, $274.0 million and $401.3 million in fiscal 2024, fiscal 2023 and fiscal 2022, respectively.

On August 16, 2022, the Inflation Reduction Act of 2022 (“2022 Tax Act”) was enacted into law. A key provision of the 2022 Tax Act is a 15% minimum tax on adjusted financial statement income. We do not expect any impact to our effective tax rate as a result of the 15% minimum tax under the 2022 Tax Act.

A reconciliation of the statutory U.S. federal income tax rate and the effective tax rate follows:

						Year Ended
						February 1, 2025						February 3, 2024						January 28, 2023
Statutory U.S. federal income tax rate						21.0		%				21.0		%				21.0		%
Effect of:
State and local income taxes, net of federal income tax benefit						3.3						3.4						3.6
Non-deductible expenses						1.4						0.7						0.9
Work Opportunity Tax Credit						(0.8)						(1.0)						(0.8)
Other, net						(0.2)						(0.3)						(0.8)
Effective tax rate						24.7		%				23.8		%				23.9		%

Reinvestment of Unremitted Earnings

Substantially all of our current year foreign cash earnings in excess of working capital and cash needed for strategic investments are not intended to be indefinitely reinvested offshore. Therefore, the tax effects of repatriation for applicable state taxes and foreign withholding taxes of such cash earnings have been provided for in the accompanying Consolidated Statements of Operations. We have the intent and ability to reinvest substantially all of the non-cash unremitted earnings of our non-U.S. subsidiaries indefinitely. Accordingly, no provision for state taxes or foreign withholding taxes was recorded on these unremitted earnings in the accompanying Consolidated Statements of Operations.

Deferred Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of our net deferred tax assets (liabilities) follow:

(in millions)						February 1, 2025						February 3, 2024
Deferred tax assets:
Operating lease liabilities						$	1,841.3					$	1,800.4
Impairment of assets held for sale						870.3						—
Net operating losses, interest expense and credit carryforwards						55.4						72.8
Accrued expenses						37.2						35.7
Accrued compensation expense						39.5						39.3
State tax election						11.8						13.1
Other						3.3						4.7
Total deferred tax assets						2,858.8						1,966.0
Valuation allowance						(11.6)						(17.3)
Deferred tax assets, net						2,847.2						1,948.7
Deferred tax liabilities:
Operating lease ROU assets						(1,698.8)						(1,639.7)
Other intangibles						(196.1)						(529.1)
Property and equipment						(623.7)						(571.8)
Prepaids						(46.1)						(35.8)
Inventory						(21.9)						(4.4)
Total deferred tax liabilities						(2,586.6)						(2,780.8)
Deferred income taxes, net						$	260.6					$	(832.1)

At February 1, 2025, we had certain state tax credit carryforwards, net operating loss carryforwards and capital loss carryforwards totaling $55.4 million. Some of these carryforwards will expire, if not utilized, beginning in fiscal 2025 through fiscal 2044.

A valuation allowance of $11.6 million, net of federal tax benefits, has been provided principally for certain state credit carryforwards and net operating loss carryforwards. In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred taxes will not be realized. Based upon the availability of carrybacks of future deductible amounts and our projections for future taxable income over the periods in which the deferred tax assets are deductible, we believe it is more likely than not the remaining existing deductible temporary differences will reverse during periods in which carrybacks are available or in which we generate net taxable income.

Uncertain Tax Positions

We are participating in the IRS Compliance Assurance Program (“CAP”) for fiscal 2024 and we have been accepted into the program for fiscal 2025. This program accelerates the examination of key transactions with the goal of resolving any issues before the tax return is filed. Our federal tax returns have been examined and all issues have been settled through the fiscal 2022 tax year. In fiscal 2020, we participated in the CAP under the IRS’s bridge year program and as a result, the IRS will not be completing an audit on the fiscal 2020 tax return at this time. Several states completed their examinations during fiscal 2024. In general, fiscal 2021 and forward are within the statute of limitations for state tax purposes. The statute of limitations is still open prior to fiscal 2021 for some states.

The balance for unrecognized tax benefits at February 1, 2025 was $28.2 million. The total amount of unrecognized tax benefits at February 1, 2025 that, if recognized, would affect the effective tax rate was $23.1 million (net of the federal tax benefit).

The following is a reconciliation of our total gross unrecognized tax benefits:

(in millions)						February 1, 2025						February 3, 2024
Beginning Balance						$	22.0					$	17.4
Additions for tax positions of prior years						10.2						5.6
Additions, based on tax positions related to current year						4.8						2.3
Settlements						(2.3)						(0.3)
Lapses in statutes of limitation						(6.5)						(3.0)
Ending balance						$	28.2					$	22.0

It is possible that tax reserves will be reduced for audit settlements and statute expirations within the next 12 months. At this point it is not possible to estimate a range associated with the resolution of these audits. We do not expect any change to have a material impact to our consolidated financial statements.

As of February 1, 2025, we have recorded a liability for potential interest and penalties of $2.7 million.

Note 5 – Commitments and Contingencies

Purchase Obligations

At February 1, 2025, we have commitments totaling $38.2 million through fiscal 2025 related to ocean shipping contracts and commitments of $299.2 million through fiscal 2034 related to agreements for software licenses and support, telecommunication services and store technology assets and maintenance for our stores.

Letters of Credit

We have $200.0 million in trade letters of credit with various financial institutions, under which $3.6 million was committed to these letters of credit issued for routine purchases of imported merchandise at February 1, 2025.

Surety Bonds

We have issued various surety bonds that primarily serve as collateral for utility payments at our stores and self-insured insurance programs. These bonds total $129.3 million and are committed through various dates through fiscal 2027.

Contingencies

Insurance Claims

On April 28, 2024, a tornado destroyed our Dollar Tree distribution center in Marietta, Oklahoma. Based on the significant damage sustained by the facility, the inventory contained in the facility and the facility itself are not salvageable. We incurred losses totaling $117.0 million in the first quarter of fiscal 2024, consisting of $70.0 million related to damaged inventory and $47.0 million related to property and equipment. These losses were fully offset by insurance receivables. As of February 1, 2025, we recorded additional insurance receivables of approximately $7.0 million for other property and equipment-related damage recoveries that we expect to be reimbursed under the terms of our insurance policy. As of February 1, 2025, we have received insurance proceeds totaling $150.0 million, including $100.0 million related to damaged inventory and $50.0 million related to damaged property and equipment. For the year ended February 1, 2025, we recorded a gain of $30.0 million for the excess of the insurance proceeds received over the losses incurred for damaged inventory, which is reflected within “Other (income) expense, net” in the accompanying Consolidated Statements of Operations.

The foregoing losses and expected insurance recoveries are based on information currently available to us. We continue to assess these estimates and will recognize any changes to these estimates in the period(s) in which they are determined. The final losses, insurance recoveries and net charges could vary from these estimates.

Legal Proceedings

We are defendants in ordinary, routine litigation or proceedings incidental to our business, including employment-related matters; infringement of intellectual property rights; personal injury/wrongful death claims; real estate matters; environmental and safety issues; and product safety matters. Legal proceedings may also include class, collective, representative and large cases and

arbitrations, including those described below. We will vigorously defend ourselves in these matters. We do not believe that any of these matters will, individually or in the aggregate, have a material effect on our business, financial condition, or liquidity. We cannot give assurance, however, that one or more of these matters will not have a material effect on our results of operations for the quarter or year in which they are reserved or resolved.

We assess our legal proceedings monthly and reserves are established if a loss is probable and the amount of such loss can be reasonably estimated. Many, if not substantially all, of our legal proceedings are subject to significant uncertainties and, therefore, determining the likelihood of a loss and the measurement of any loss can be complex and subject to judgment. With respect to the matters noted below where we have determined that a loss is reasonably possible but not probable, we are unable to reasonably estimate the amount or range of the possible loss at this time due to the inherent difficulty of predicting the outcome of and uncertainties regarding legal proceedings. Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions. Management’s assessment of legal proceedings could change because of future determinations or the discovery of facts which are not presently known. Accordingly, the ultimate costs of resolving these proceedings may be substantially higher or lower than currently estimated.

Active Matters

Talc Product Matters

Multiple personal injury lawsuits are pending in state court in California, Illinois, Louisiana, New York, Texas, and New Jersey against Dollar Tree, Family Dollar or both alleging that certain talc products that we sold caused cancer. The plaintiffs seek compensatory, punitive and exemplary damages, damages for loss of consortium, and attorneys’ fees and costs. Although we have been able to resolve previous talc lawsuits against us without material loss, given the inherent uncertainties of litigation there can be no assurances regarding the outcome of pending or future cases. Future costs to litigate these cases are not known but may be material, and it is uncertain whether our costs will be covered by insurance. In addition, although we have indemnification rights against our vendors in several of these cases, it is uncertain whether the vendors will have the financial ability to fulfill their obligations to us.

Acetaminophen Matters

Beginning in August 2022, more than 50 personal injury cases have been filed in federal court against Dollar Tree, Family Dollar, or both, on behalf of minors alleging that their mothers took acetaminophen while pregnant, that the acetaminophen interfered with fetal development such that plaintiffs were born with autism and/or ADHD, and that we knew or should have known of the danger, had a duty to warn and failed to include appropriate warnings on the product labels. The plaintiffs seek compensatory, punitive and/or exemplary damages, restitution and disgorgement, economic damages, and attorneys’ fees and costs. These cases, which originated in Alabama, California, Florida, Georgia, Louisiana, Minnesota, Missouri, North Carolina, Kentucky, Tennessee and Texas, along with other cases against many other defendants, were consolidated into multi-district court litigation in the Southern District of New York. The court disqualified plaintiffs’ experts and, on that basis dismissed all the cases which had been filed at the time of that decision, including all cases currently filed against us. The dismissal has been appealed to the Second Circuit by plaintiffs.

Note 6 - Short-Term Borrowings and Long-Term Debt

Short-term borrowings and long-term debt consist of the following:

(in millions)						February 1, 2025						February 3, 2024
Short-Term Borrowings:
Unsecured commercial paper notes						$	—					$	—
$1.5 billion revolving credit facility						—						—
Total Short-Term Borrowings						$	—					$	—
Long-Term Debt:
4.00% Senior Notes, due May 2025						$	1,000.0					$	1,000.0
4.20% Senior Notes, due May 2028						1,250.0						1,250.0
2.65% Senior Notes, due December 2031						800.0						800.0
3.375% Senior Notes, due December 2051						400.0						400.0
Debt discount and issuance costs						(18.8)						(23.7)
Total Long-Term Debt						$	3,431.2					$	3,426.3
Less: Current portion						$	1,000.0					$	—
Non-current portion of long-term debt						$	2,431.2					$	3,426.3

Short-Term Borrowings

Commercial Paper Program

In fiscal 2023, the Company established a commercial paper program to issue unsecured commercial paper notes with maturities up to 397 days from the date of issue, up to a maximum aggregate face or principal amount outstanding at any time of $1.5 billion. The net proceeds of note issuances are used for general corporate purposes. The Company’s revolving credit facility, which is discussed below, serves as a liquidity backstop for the repayment of notes outstanding under the program. The notes rank equally with all of our other unsecured and unsubordinated debt. We issued and repaid $3.2 billion and $1.1 billion principal amount of notes in fiscal 2024 and fiscal 2023, respectively, and incurred interest expense of $3.9 million and $2.6 million, respectively, related to these notes. At February 1, 2025 and February 3, 2024, no notes were outstanding under the program.

Revolving Credit Facility

The Company’s $1.5 billion five-year revolving credit facility (the “Revolving Credit Facility”), of which up to $350.0 million is available for letters of credit, is currently set to mature on December 8, 2026. At February 1, 2025 and February 3, 2024, we had letters of credit outstanding under the Revolving Credit Facility of $3.8 million and $4.1 million, respectively. We did not borrow under the Revolving Credit Facility in fiscal 2024 or fiscal 2023. In fiscal 2022, we borrowed and repaid $555.0 million of loans under the Revolving Credit Facility and incurred interest expense of $3.6 million related to these borrowings. We had no borrowings outstanding under the Revolving Credit Facility at February 1, 2025 and February 3, 2024. Borrowings under the Revolving Credit Facility bear interest at the Adjusted Term SOFR Rate (as defined in the underlying credit agreement) plus 1.125%, subject to adjustment based on (i) our public debt rating and (ii) our leverage ratio. At February 1, 2025, the Revolving Credit Facility bore interest at 5.54%. We pay certain commitment fees in connection with the Revolving Credit Facility. The Revolving Credit Facility allows voluntary repayment of outstanding loans at any time without premium or penalty, other than customary “breakage” costs with respect to Secured Overnight Financing Rate (“SOFR”) loans.

The Revolving Credit Facility contains a number of customary affirmative and negative covenants that, among other things, restrict, subject to certain exceptions, the Company’s ability to incur subsidiary indebtedness, incur liens, sell all or substantially all of our (including our subsidiaries’) assets and consummate certain fundamental changes. The Revolving Credit Facility also contains financial covenants, including a maximum leverage ratio covenant and a minimum fixed charge coverage ratio covenant. As of February 1, 2025, we were in compliance with all applicable covenants.

Long-Term Debt

Senior Notes

The Company’s outstanding senior notes summarized in the table above are unsecured, unsubordinated obligations of the Company, ranking equally in right of payment among themselves and with the Company’s existing and future unsecured and unsubordinated debt. The Company, at its option, may redeem each series of the senior notes at any time, in whole or in part, at

redemption prices set forth in the respective indentures. Additionally, upon certain events, the holders of the notes have the right to require the Company to repurchase all or a portion of their notes at a price of 101% of the principal amount of the notes, plus accrued and unpaid interest. Interest on all outstanding senior notes is payable semiannually.

The senior notes contain covenants that, among other things, limit our ability to incur certain secured debt. As of February 1, 2025, we were in compliance with all applicable covenants.

Maturities of long-term debt are as follows (in millions):

Fiscal Year						(in millions)
2025						$	1,000.0
2026						—
2027						—
2028						1,250.0
2029						—
Thereafter						1,200.0
Total						$	3,450.0

Note 7 - Leases

Our lease portfolio primarily consists of leases for our retail store locations, vehicles and trailers, as well as distribution center space and equipment.

The lease cost for operating leases that was recognized in the accompanying Consolidated Statements of Operations was as follows:

						Year Ended
(in millions)						February 1, 2025						February 3, 2024						January 28, 2023
Operating lease cost						$	1,041.6					$	948.1					$	907.2
Variable lease cost						328.9						296.0						279.7
Short-term lease cost						21.5						15.6						8.9
Total lease cost*						$	1,392.0					$	1,259.7					$	1,195.8
*Excludes sublease income, which is immaterial

There are no residual value guarantees that exist, and there are no restrictions or covenants imposed by leases.

As of February 1, 2025, maturities of lease liabilities were as follows:

Fiscal Year						(in millions)
2025						$	1,014.3
2026						986.6
2027						826.9
2028						646.0
2029						476.5
Thereafter						923.4
Total undiscounted lease payments						4,873.7
Less interest						474.3
Present value of lease liabilities						$	4,399.4

The future lease payments above exclude $154.0 million of legally binding minimum lease payments for leases signed but not yet commenced as of February 1, 2025.

Information regarding the weighted-average remaining lease term and the weighted-average discount rate for operating leases is as follows:

						February 1, 2025						February 3, 2024						January 28, 2023
Weighted-average remaining lease term (years)						5.6						5.4						5.2
Weighted-average discount rate						4.6		%				4.0		%				3.4		%

The following represents supplemental information pertaining to our operating lease arrangements:

						Year Ended
(in millions)						February 1, 2025						February 3, 2024						January 28, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases						$	1,047.6					$	1,038.6					$	900.4
Right-of-use assets obtained in exchange for new operating lease liabilities						$	1,378.5					$	1,113.0					$	765.1

Note 8 - Fair Value Measurements

Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a fair value hierarchy has been established that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities;

Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and

Level 3 - Unobservable inputs in which there is little or no market data which require the reporting entity to develop its own assumptions.

Financial assets and liabilities are classified in the fair value hierarchy in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (e.g., when there is evidence of impairment). We review certain store assets for evidence of impairment. The fair values are determined based on the income approach, in which we utilize internal cash flow projections over the life of the underlying lease agreements discounted based on our risk-adjusted rate. These measures of fair value, and related inputs, are considered a Level 3 approach under the fair value hierarchy. Refer to Note 2 under the caption “Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of” and Note 15 for further information regarding the impairment charges recorded in fiscal 2024, fiscal 2023 and fiscal 2022.

Our indefinite-lived intangible assets are recorded at carrying value, and, if impaired, are adjusted to fair value using Level 3 inputs. Refer to Note 2 under the caption “Goodwill and Nonamortizing Intangible Assets” and Note 15 for further information regarding the process of determining the fair value of these assets and the impairment charges recorded in fiscal 2024, fiscal 2023 and fiscal 2022.

Fair Value of Financial Instruments

The carrying amounts of “Cash and cash equivalents,” “Restricted cash” and “Accounts payable” as reported in the accompanying Consolidated Balance Sheets approximate fair value due to their short-term maturities. The carrying values of our Revolving Credit Facility and borrowings under our commercial paper program approximate their fair values.

The aggregate fair values and carrying values of our long-term borrowings were as follows:

						February 1, 2025												February 3, 2024
(in millions)						Fair Value						Carrying Value						Fair Value						Carrying Value
Level 1
Senior Notes						$	3,140.9					$	3,433.6					$	3,140.0					$	3,430.1

The fair values of our Senior Notes were determined using Level 1 inputs as quoted prices in active markets for identical assets or liabilities are available.

Note 9 - Shareholders’ Equity

Preferred Stock

We are authorized to issue 10,000,000 shares of Preferred Stock, $0.01 par value per share. No preferred shares were issued and outstanding at February 1, 2025 and February 3, 2024.

Share Repurchase Programs

We periodically repurchase shares of our common stock under share repurchase programs authorized by our Board of Directors. Under the existing Board repurchase authorization, we may repurchase up to $2.5 billion of our common stock in open market or privately negotiated transactions with financial institutions. The repurchase authorization does not have an expiration date.

We repurchased 3,283,837, 3,905,599 and 4,613,696 shares of common stock on the open market at a cost of $403.6 million, $504.3 million and $647.5 million, including applicable excise tax, in fiscal 2024, fiscal 2023 and fiscal 2022, respectively. As of February 1, 2025, we had $952.4 million remaining under our existing $2.5 billion Board repurchase authorization.

Note 10 - Stock-Based Compensation Plans

Fixed Stock-Based Compensation Plans

The 2011 Omnibus Incentive Plan permitted us to grant to our employees, consultants and directors up to 4.0 million shares of our common stock plus any shares available under former plans which were previously approved by the shareholders. The plan permitted us to grant equity awards in the form of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards, service-based restricted stock units (“RSUs”), performance bonuses, performance-based restricted stock units (“PSUs”), non-employee director stock options and other equity-related awards. As of March 17, 2021, the plan was no longer available for new grants of awards, but all outstanding awards that were granted under the plan prior to March 17, 2021 continue to be governed by the terms and conditions of the plan and applicable award agreements. Effective June 10, 2021, the 2011 Omnibus Incentive Plan was replaced and superseded by the 2021 Omnibus Incentive Plan (“Omnibus Plan”). The Omnibus Plan permits us to grant up to 6.5 million shares of our common stock to our employees, consultants and directors. The form of equity awards authorized for grant under the Omnibus Plan are substantially the same as those permitted by the predecessor plan.

Any restricted stock, RSUs or PSUs awarded are subject to certain general restrictions. The restricted stock shares or units may not be sold, transferred, pledged or disposed of until the restrictions on the shares or units have lapsed or have been removed under the provisions of the Omnibus Plan. In addition, if a holder of restricted shares or units ceases to be employed by us, any shares or units in which the restrictions have not lapsed will be forfeited.

Prior to July 1, 2023, the 2013 Director Deferred Compensation Plan permitted our directors to defer all or a portion of fees for Board or Board committee service until a future date, at which time they may be paid in cash or shares of our common stock, or receive all or a portion of such fees in non-statutory stock options. Deferred fees that are paid out in cash will earn interest at the 30-year Treasury Bond Rate. Deferred amounts to be paid in common stock are determined by dividing the deferred fee amount by the closing market price of a share of our common stock on the date of deferral. The number of options issued to a director will equal the deferred fee amount divided by 33% of the price of a share of our common stock. The exercise price will equal the fair market value of our common stock at the date the option is issued. The options are fully vested when issued and have a term of 10 years. The 2013 plan expired on June 30, 2023. All amounts deferred by directors pursuant to the terms of the 2013 plan on or before June 30, 2023 will continue to be administered in accordance with the terms of the 2013 plan and applicable deferral elections.

Beginning July 1, 2023, our non-employee directors are permitted to defer all or a part of fees earned for his or her service as a director pursuant to our Non-Employee Director Deferred Compensation Program, which operates in conjunction with, and under the authority of, the Omnibus Plan. Pursuant to this program, cash fees may be deferred into either a cash account or a phantom stock account, and annual equity awards for service as a director may be deferred into the director’s phantom stock account. Deferred fees

that are paid out in cash will earn interest at the 30-year Treasury Bond Rate. Deferred amounts to be paid in common stock are determined by dividing the deferred fee amount by the closing market price of a share of our common stock on the date of deferral.

Total stock-based compensation expense was recorded in the accompanying Consolidated Statements of Operations as follows:

						Year Ended
(in millions)						February 1, 2025						February 3, 2024						January 28, 2023
Cost of sales						$	13.9					$	11.9					$	10.3
Selling, general and administrative expenses						93.0						64.4						81.2
Income (loss) from discontinued operations, net of tax						18.0						20.4						18.9
Total stock-based compensation expense						$	124.9					$	96.7					$	110.4
Excess tax benefit (deficit) on stock-based compensation recognized in the provision for income taxes						$	(0.9)					$	3.9					$	9.8

The following discussion of our stock-based compensation awards includes awards related to continuing and discontinued operations.

Restricted Stock

We issue RSUs to employees and officers and issue PSUs to certain of our officers. We recognize expense based on the estimated fair value of the RSUs or PSUs granted over the requisite service period, which is generally three years, on a straight-line basis or a shorter period based on the retirement eligibility of the grantee. For PSUs, the compensation expense recorded is re-evaluated at each reporting period and adjusted, as necessary, based on the probability of achieving the performance criteria.

RSUs

The fair value of RSUs is determined based on our closing stock price on the grant date. The following table summarizes the status of RSUs as of February 1, 2025 and changes during the year then ended:

						Number of RSUs						Weighted Average Grant Date Fair Value
Nonvested at February 3, 2024						839,186						$	141.45
Granted						668,169						131.89
Vested						(403,756)						136.95
Forfeited						(130,466)						140.71
Nonvested at February 1, 2025						973,133						$	136.86

The total fair value of the RSUs vested during the years ended February 1, 2025, February 3, 2024 and January 28, 2023 was $55.3 million, $53.8 million and $51.5 million, respectively. The weighted average grant date fair value of the RSUs granted in fiscal 2024, fiscal 2023 and fiscal 2022 was $131.89, $141.70 and $158.05, respectively. As of February 1, 2025, there was $73.6 million of total unrecognized compensation expense related to the outstanding RSUs which is expected to be recognized over a weighted-average period of 1.5 years.

PSUs

Historically, we have granted PSUs that have a service and performance condition. The fair value of these awards is determined based on our closing stock price on the grant date. In fiscal 2024 and fiscal 2023, we granted PSUs that cliff vest at the end of three years and that contain a market condition modifier, in addition to having a service and performance condition. The market condition modifier can adjust the number of shares that vest under the award based on a comparison of our total shareholder return to that of a designated peer group over the performance period.

The fair value of these awards incorporating the market condition was estimated on the grant date using a Monte Carlo simulation model with the following weighted average assumptions:

						Fiscal 2024						Fiscal 2023
Expected term (in years)						2.8						2.8
Expected stock price volatility						34.7		%				34.5		%
Dividend yield						—		%				—		%
Risk-free interest rate						4.49		%				3.82		%

The expected stock price volatility is based on the historical and implied volatility of our common stock over a period matching the expected term of the awards granted. The dividend yield reflects that we have never paid cash dividends. The risk-free interest rate represents the yield curve in effect at the time of grant for U.S. Treasury zero-coupon securities with maturities that approximate the expected term of the awards.

The following table summarizes the status of PSUs as of February 1, 2025 and changes during the year then ended:

						Number of PSUs						Weighted Average Grant Date Fair Value
Nonvested at February 3, 2024						150,150						$	147.29
Granted						178,579						114.98
Vested						(70,749)						128.03
Forfeited						(40,864)						151.60
Nonvested at February 1, 2025						217,116						$	128.95

The total fair value of the PSUs vested during the years ended February 1, 2025, February 3, 2024 and January 28, 2023 was $9.1 million, $8.7 million and $44.5 million, respectively. The weighted average grant date fair value of the PSUs granted in fiscal 2024, fiscal 2023 and fiscal 2022 was $114.98, $129.24 and $159.57, respectively. As of February 1, 2025, there was $10.1 million of total unrecognized compensation expense related to these PSUs which is expected to be recognized over a weighted-average period of 1.4 years. We assess the probability of the achievement of the remaining performance targets at the end of each reporting period and based on that assessment, cumulative adjustments may be recorded in future periods.

Stock Options

Historically, we have not used stock options broadly as part of our compensation strategy. In fiscal 2023, we began to issue stock options to certain key executives. These awards generally have a ten-year term and vest in equal installments on each of the first three anniversaries of the grant date, subject to the employees’ continued employment with the company through each vesting date. Stock options granted in fiscal 2024 and fiscal 2023 had a fair value of $5.6 million and $4.9 million, respectively.

In addition, in fiscal 2022, we granted a one-time award of options to purchase 2,252,587 shares of our common stock at a fair value of $135.6 million to the then Executive Chairman of the Board, who was also appointed Chief Executive Officer of the company effective January 29, 2023. The grant of options was subject to the terms and conditions of a five-year Executive Agreement. The option award has a ten-year term and was scheduled to vest in equal installments on each of the first five anniversaries of the grant date, subject to the Executive Chairman’s continued employment with the company through each vesting date. In the fourth quarter of fiscal 2024, the Executive Chairman and Chief Executive Officer resigned from the Company. As a result, $27.1 million of expense was recognized in the fourth quarter of fiscal 2024 related to the accelerated vesting of an additional number of options pursuant to the terms of the Executive Agreement. Vested portions of the award remain excercisable through the original ten-year term.

Stock options are valued using the Black-Scholes option pricing model and compensation expense is recognized on a straight-line basis over the requisite service period.

The weighted average assumptions used in the Black-Scholes option pricing model for the executive stock options granted in fiscal 2024 and fiscal 2023, as well as the assumptions used for the fiscal 2022 award granted to the former Executive Chairman are as follows:

						Fiscal 2024						Fiscal 2023						Fiscal 2022
Expected term (in years)						6.0						6.0						6.5
Expected stock price volatility						37.1		%				36.3		%				34.1		%
Dividend yield						—		%				—		%				—		%
Risk-free interest rate						4.36		%				3.81		%				2.15		%

The simplified method was used to estimate the expected term of the options due to our lack of historical option exercise experience and the “plain vanilla” characteristics of the option awards. The simplified method results in an expected term equal to the average of the weighted average time-to-vesting and the contractual life of the options. The expected stock price volatility is based on the historical volatility of our common stock over a period matching the expected term of the options granted. The dividend yield reflects that we have never paid cash dividends. The risk-free interest rate represents the yield curve in effect at the time of grant for U.S. Treasury zero-coupon securities with maturities that approximate the expected term of the options.

Prior to July 1, 2023, certain of our directors elected to defer their compensation into stock options under the 2013 Director Deferred Compensation Plan. These options vested immediately and were expensed on the grant date.

The following tables summarize information about options outstanding at February 1, 2025 and changes during the year then ended:

						Number of Shares						Weighted Average Per Share Exercise Price						Weighted Average Remaining Term (Years)						Aggregate Intrinsic Value (in millions)
Outstanding at February 3, 2024						2,360,102						$	155.84
Granted						102,147						125.94
Exercised						(726)						76.97
Forfeited						(661,498)						156.42
Outstanding at February 1, 2025						1,800,025						$	154.49					7.3						$	—
Exercisable at February 1, 2025						1,669,653						$	156.55					7.1						$	—

The intrinsic value of options exercised was less than $0.1 million in each of fiscal 2024, fiscal 2023 and fiscal 2022. As of February 1, 2025, there was $3.9 million of total unrecognized compensation expense related to these options which is expected to be recognized over a weighted-average period of 1.5 years.

Note 11 – Earnings (Loss) Per Share

The following table sets forth the calculations of basic and diluted earnings (loss) per share:

						Year Ended
(in millions, except per share data)						February 1, 2025						February 3, 2024						January 28, 2023
Numerator:
Income from continuing operations						$	1,042.5					$	1,265.8					$	1,500.1
Income (loss) from discontinued operations, net of tax						(4,072.6)						(2,264.2)						115.3
Net income (loss)						$	(3,030.1)					$	(998.4)					$	1,615.4
Denominator:
Weighted average number of shares outstanding						215.7						219.5						223.2
Dilutive impact of share-based awards (as determined by applying the treasury stock method)						0.2						0.4						0.9
Weighted average number of shares and dilutive potential shares outstanding						215.9						219.9						224.1
Basic earnings (loss) per share of common stock:
Continuing operations						$	4.83					$	5.77					$	6.72
Discontinued operations						(18.88)						(10.32)						0.52
Total basic earnings (loss) per share of common stock						$	(14.05)					$	(4.55)					$	7.24
Diluted earnings (loss) per share of common stock:
Continuing operations						$	4.83					$	5.76					$	6.70
Discontinued operations						(18.86)						(10.30)						0.51
Total diluted earnings (loss) per share of common stock						$	(14.03)					$	(4.54)					$	7.21

For the years ended February 1, 2025, February 3, 2024 and January 28, 2023, share-based awards of 3.1 million shares, 2.4 million shares and 3.0 million shares, respectively, were excluded from the calculation of diluted earnings per share because their inclusion would be anti-dilutive.

Note 12 – Employee Benefit Plan

Dollar Tree Retirement Savings Plan

We maintain a 401(k) plan which is available to all full-time, United States-based employees who are at least 18 years of age. Eligible employees may make elective salary deferrals. We make contributions in the form of a dollar-for-dollar match on the first five percent of employee contributions to eligible employees who have completed one year of service in which they have worked at least 1,000 hours.

Contributions to and reimbursements by us of expenses of the plan were recorded in the accompanying Consolidated Statements of Operations as follows:

						Year Ended
(in millions)						February 1, 2025						February 3, 2024						January 28, 2023
Cost of sales						$	6.0					$	5.7					$	4.8
Selling, general and administrative expenses						18.0						15.9						14.3
Income (loss) from discontinued operations, net of tax						14.4						14.3						12.6
Total retirement plan contributions						$	38.4					$	35.9					$	31.7

All eligible employees are immediately vested in any company match contributions under the 401(k) plan.

Note 13 – Segments and Disaggregated Revenue

As described in Note 2 under the caption “Assets Held for Sale and Discontinued Operations,” as well as Note 15 below, effective as of the fourth quarter of fiscal 2024, the Company no longer reports the Family Dollar segment; it now reports its financial performance based on the Dollar Tree segment and corporate, support and other. The Dollar Tree segment is a leading operator of discount variety stores offering merchandise predominantly at the opening price point of $1.25, with additional offerings at higher price points. Dollar Tree stores serve customers with a broad range of income levels principally in suburban locations. The Dollar Tree segment includes our operations under the Dollar Tree and Dollar Tree Canada brands, 15 distribution centers in the United States and two distribution centers in Canada. Corporate, support and other consists primarily of store support center costs and the results of operations for our Summit Pointe property in Chesapeake, Virginia that are considered shared services and therefore these results are excluded from the Dollar Tree segment.

Our CODM is our chief executive officer of the enterprise. The CODM evaluates the financial performance of the Dollar Tree segment using segment gross profit and operating income. The CODM reviews these metrics to allocate resources to the segment, primarily in the annual budget and quarterly forecasting process. The CODM considers variances between actual results and internal budgets/forecasts on a monthly basis for both profit measures when making decisions about allocating capital and resources to the segment. The CODM also uses segment gross profit to evaluate our ability to control product and supply chain costs relative to changes in sales between comparable periods. The CODM uses operating income to assess the overall performance for the segment. The CODM is provided asset information on a consolidated basis rather than by segment.

The accounting policies of the segments are the same as those described in Note 2. We may revise the measurement of each segment’s operating income, as determined by the information regularly reviewed by the CODM. If the measurement of a segment changes, prior period amounts and balances are reclassified to be comparable to the current period’s presentation. Corporate, support and other includes costs that were previously incurred in support of the Family Dollar segment but are not directly attributable to it and thus were not recorded in discontinued operations. Information for our segments, as well as for corporate, support and other, including the reconciliation to income from continuing operations before income taxes, is as follows:

(in millions)						Dollar Tree Segment						Corporate, Support and Other						Total
Year Ended February 1, 2025
Net sales						$	17,565.8					$	—					$	17,565.8
Cost of sales						11,284.1						—						11,284.1
Gross Profit						6,281.7						—						6,281.7
Other revenue						0.1						12.6						12.7
Selling, general and administrative expenses						4,193.2						639.2						4,832.4
Operating income (loss)						2,088.6						(626.6)						1,462.0
Interest expense, net																		107.5
Other (income) expense, net																		(29.1)
Income from continuing operations before income taxes																		$	1,383.6
Depreciation and amortization expense						$	488.9					$	38.0					$	526.9
Capital expenditures						$	1,262.2					$	38.3					$	1,300.5
Year Ended February 3, 2024
Net sales						$	16,770.3					$	—					$	16,770.3
Cost of sales						10,761.4						—						10,761.4
Gross Profit						6,008.9						—						6,008.9
Other revenue						—						10.8						10.8
Selling, general and administrative expenses						3,730.3						514.9						4,245.2
Operating income (loss)						2,278.6						(504.1)						1,774.5
Interest expense, net																		112.5
Other expense, net																		0.1
Income from continuing operations before income taxes																		$	1,661.9
Depreciation and amortization expense						$	370.1					$	30.4					$	400.5
Capital expenditures						$	1,081.2					$	112.6					$	1,193.8
Year Ended January 28, 2023
Net sales						$	15,405.7					$	—					$	15,405.7
Cost of sales						9,630.2						—						9,630.2
Gross Profit						5,775.5						—						5,775.5
Other revenue						—						5.8						5.8
Selling, general and administrative expenses						3,239.8						442.2						3,682.0
Operating income (loss)						2,535.7						(436.4)						2,099.3
Interest expense, net																		127.2
Other expense, net																		0.4
Income from continuing operations before income taxes																		$	1,971.7
Depreciation and amortization expense						$	338.5					$	26.8					$	365.3
Capital expenditures						$	544.4					$	94.6					$	639.0

Disaggregated Revenue

The following table summarizes net sales by merchandise category for our Dollar Tree segment:

						Year Ended
(in millions)						February 1, 2025												February 3, 2024												January 28, 2023
Consumable						$	8,575.3					48.8		%				$	7,915.6					47.2		%				$	6,978.8					45.3		%
Variety						7,944.0						45.2		%				7,781.4						46.4		%				7,456.3						48.4		%
Seasonal						1,046.5						6.0		%				1,073.3						6.4		%				970.6						6.3		%
Total Dollar Tree segment net sales						$	17,565.8					100.0		%				$	16,770.3					100.0		%				$	15,405.7					100.0		%

Note 14 – Supply Chain Finance Program

During fiscal 2023, we implemented a supply chain finance program, administered through a financial institution, which provides participating suppliers with the opportunity to finance payments due from us. Participating suppliers may, at their sole discretion, elect to finance one or more invoices of ours prior to their scheduled due dates at a discounted price with the financial institution.

Our obligations to our suppliers, including amounts due and scheduled payment dates, are not impacted by the supplier’s decision to finance amounts under these arrangements. As such, the outstanding payment obligations under our supply chain financing program are included within “Accounts payable” in the accompanying Consolidated Balance Sheets and within “Cash flows from operating activities” in the accompanying Consolidated Statements of Cash Flows.

As of February 1, 2025 and February 3, 2024, our outstanding payment obligations under this program were $346.5 million and $10.0 million, respectively.

The change in our outstanding payment obligations under the supply chain finance program is as follows:

						Year Ended
(in millions)						February 1, 2025
Obligations outstanding at February 3, 2024						$	10.0
Obligations confirmed during the period						1,063.7
Obligations settled during the period						(727.2)
Obligations outstanding at February 1, 2025						$	346.5

Note 15 – Discontinued Operations

As previously reported, in fiscal 2024 the Company initiated a formal review of strategic alternatives for the Family Dollar business. This strategic alternatives review concluded in the fourth quarter of fiscal 2024 and resulted in the decision to sell the Family Dollar business. Accordingly, the Company determined the assets of the Family Dollar business met the criteria for classification as held for sale. Additionally, the Company determined the ultimate disposal will represent a strategic shift that will have a major effect on our operations and financial results. As such, the results of Family Dollar are presented as discontinued operations in the accompanying Consolidated Statements of Operations for all periods presented. The assets and liabilities of Family Dollar have been reflected as assets and liabilities of discontinued operations in the accompanying Consolidated Balance Sheets for all periods presented. On March 25, 2025, the Company entered into a definitive agreement to sell the Family Dollar business to Brigade Capital Management, LP and Macellum Capital Management, LLC, for a purchase consideration of $1,007.0 million, subject to a number of adjustments, including with respect to working capital and net indebtedness. The closing of the transaction is subject to satisfaction of customary closing conditions, including receipt of U.S. antitrust approval. Net proceeds are estimated to total approximately $804.0 million.

Refer to Note 2 under the caption “Assets Held for Sale and Discontinued Operations” for additional details on accounting criteria for held for sale and discontinued operations treatment.

At February 1, 2025, the Family Dollar business included the operations of 7,622 general merchandise retail discount stores and ten distribution centers. The Company plans to convert the Odessa, Texas Family Dollar distribution center to a Dollar Tree distribution center in the second quarter of fiscal 2025. In addition, the Company intends to reassign approximately 330 leases for closed Family Dollar stores to Dollar Tree.

Financial Information of Discontinued Operations

“Income (loss) from discontinued operations, net of tax” in the Consolidated Statements of Operations reflects the after-tax results of the Family Dollar business and does not include any allocation of general corporate overhead expense or interest expense of the Company.

The following table summarizes the results of operations of the Family Dollar business that are being reported as discontinued operations:

						Year Ended
(in millions)						February 1, 2025						February 3, 2024						January 28, 2023
Net sales						$	13,252.1					$	13,811.3					$	12,912.5
Other revenue						15.0						11.4						7.7
Total revenue						13,267.1						13,822.7						12,920.2
Cost of sales						9,894.5						10,510.6						9,766.1
Selling, general and administrative expenses, excluding Goodwill impairment						4,706.9						4,899.4						3,017.1
Goodwill impairment						490.5						1,069.0						—
Selling, general and administrative expenses						5,197.4						5,968.4						3,017.1
Operating income (loss)						(1,824.8)						(2,656.3)						137.0
Interest income						5.5						5.7						1.9
Loss from classification to held for sale						3,438.8						—						—
Income (loss) from discontinued operations before income taxes						(5,258.1)						(2,650.6)						138.9
Provision for income taxes						(1,185.5)						(386.4)						23.6
Income (loss) from discontinued operations, net of tax						$	(4,072.6)					$	(2,264.2)					$	115.3

Depreciation expense related to discontinued operations was $430.6 million, $418.5 million, and $372.1 million for the years ended February 1, 2025, February 3, 2024, and January 28, 2023, respectively. The Company has ceased depreciating and amortizing its long-lived assets for Family Dollar which primarily includes right-of-use assets and property and equipment.

The following table summarizes the Family Dollar business assets and liabilities classified as discontinued operations in the accompanying Consolidated Balance Sheets:

(in millions)						February 1, 2025						February 3, 2024
ASSETS
Cash and cash equivalents						$	179.0					$	259.7
Merchandise inventories						2,456.4						2,617.0
Other current assets						200.9						193.7
Property, plant and equipment, net						2,268.0						2,322.0
Operating lease right-of-use assets						2,580.6						2,815.6
Goodwill						—						490.5
Trade name intangible asset						750.0						2,150.0
Other assets						12.8						13.9
Valuation allowance to adjust assets to estimated fair value, less costs of disposal						(3,438.8)						—
Total assets of discontinued operations						$	5,008.9					$	10,862.4
LIABILITIES
Current portion of operating lease liabilities						$	598.5					$	613.2
Accounts payable						977.5						896.7
Other current liabilities						378.6						488.9
Operating lease liabilities, long-term						2,134.5						2,405.3
Other liabilities						135.8						133.2
Total liabilities of discontinued operations						$	4,224.9					$	4,537.3

Assets and liabilities classified as held for sale are required to be recorded at the lower of carrying value or fair value less costs to sell. As of February 1, 2025, we determined that the fair value of the Family Dollar business, including costs to sell was lower than its carrying value and we recorded a $3,438.8 million valuation allowance against the assets held for sale. The fair value of the Family Dollar business was estimated using the expected sale price as negotiated with the third party buyer. The non-cash valuation allowance was recorded within “Loss from classification to held for sale” in the summarized results of operations of discontinued operations for the year ended February 1, 2025.

Capital expenditures related to discontinued operations were $439.4 million, $907.5 million, and $609.8 million for the years ended February 1, 2025, February 3, 2024, and January 28, 2023, respectively.

Impairments

Impairment of Long-Lived Assets

In fiscal 2024, fiscal 2023 and fiscal 2022, we recorded impairment charges related to discontinued operations of $80.2 million, $500.6 million, and $38.7 million, respectively, to write down certain assets. These impairment charges are recorded as a component of “Selling, general and administrative expenses” in the results of discontinued operations above.

The fiscal 2024 impairment charges included $70.0 million of operating lease ROU asset impairment charges and $10.0 million of store asset impairment charges recorded in connection with our annual review of events or changes in circumstances that indicate the carrying amount of store-related asset groups may not be recoverable. As a result of this review, we identified underperforming stores within the Family Dollar business that indicated that the carrying amount of their long-lived assets may not be recoverable.

The fiscal 2023 impairment charges included $343.9 million of operating lease ROU asset impairment charges and $149.2 million of store asset impairment charges recorded in connection with the store portfolio optimization review. This review was announced during the fourth quarter of fiscal 2023 and involved identifying stores for closure, relocation or re-bannering based on an evaluation of current market conditions and individual store performance, among other factors. As a result of the portfolio optimization review, we identified approximately 970 underperforming Family Dollar stores, including approximately 600 stores to be closed in the first half of fiscal 2024, and approximately 370 stores to be closed at the end of each store's current lease term. As of February 1, 2025, we had closed approximately 695 stores identified under the portfolio optimization review.

For the fiscal 2024 and fiscal 2023 impairment charges, we performed an undiscounted cash flow analysis on each individual store’s asset group, and determined that certain store asset groups had net carrying values that exceeded their estimated undiscounted future cash flows. We estimated the fair values of the asset groups based on a discounted cash flow method for each store and recorded an impairment for store asset groups where the fair value was lower than its carrying value. For stores that were to close in the first half of fiscal 2024 pursuant to the portfolio optimization review, we estimated the remaining fair value of the asset groups taking into account our ability to generate sublease income or lease termination benefits prior to the end of the lease term. The significant estimates used in the discounted cash flow methodology, which are based on level 3 inputs, include our expectations for future operations and projected cash flows. The valuation date for estimating the fair value of the long-lived assets at the stores for fiscal 2024 and fiscal 2023 was November 30, 2024 and November 25, 2023, respectively.

In fiscal 2023, we also recorded $80.6 million of inventory markdowns and $5.6 million of capitalized distribution cost impairment within “Cost of sales” in the results of discontinued operations above related to the store portfolio optimization review. The operating lease ROU asset impairment recorded in connection with the store portfolio optimization review in fiscal 2023 did not relieve us of our monthly cash payment obligations under the leases. We continue to pursue lease terminations or subleases where practicable.

Trade Name and Goodwill Impairment

In connection with our annual impairment testing of goodwill and nonamortizing intangible assets during the fourth quarter of fiscal 2024, and as a result of the decisions made around the strategic review, we determined it was more likely than not that an impairment loss had been incurred with respect to the Family Dollar goodwill and trade name, and proceeded to perform a quantitative impairment test of both assets. We estimated, with the assistance of a third party specialist, the fair value of the Family Dollar trade name based on an income approach using the relief-from-royalty method. The significant estimates used in the relief-from-royalty method, which are level 3 inputs, include estimates of future growth and revenue, a company-specific royalty rate, our weighted average cost of capital adjusted by a company-specific risk premium and trade name premium. The valuation date for the Family Dollar trade name was November 30, 2024. The results of the impairment test showed that the carrying value of the Family Dollar trade name exceeded its estimated fair value resulting in the recognition of a $1,400.0 million impairment charge in the fourth quarter of fiscal 2024, which is recorded as a component of “Selling, general and administrative expenses” in the results of discontinued operations above.

Subsequent to the Family Dollar trade name and long-lived asset impairment tests, we estimated the fair value of the Family Dollar reporting unit using the expected sale price for the business as negotiated with potential third party buyers. The valuation date for the Family Dollar reporting unit was November 30, 2024. The annual goodwill impairment evaluation in 2024 showed that the fair value of the Family Dollar reporting unit was lower than its carrying value resulting in the recognition of a $490.5 million impairment charge in the fourth quarter of fiscal 2024.

In the fourth quarter of fiscal 2023, the annual goodwill and nonamortizing intangible asset impairment evaluations resulted in the recognition of a $950.0 million trade name impairment charge and a $1,069.0 million goodwill impairment charge. The impairments were the result of the anticipated store closures under the store portfolio optimization review described previously. The fair value of the trade name was estimated, with the assistance of a third party specialist, based on an income approach using the relief-from-royalty method. The significant estimates used in the relief-from-royalty method, which are level 3 inputs, include estimates of future growth and revenue, a company-specific royalty rate, our weighted average cost of capital adjusted by a company-specific risk premium and trade name premium. The fair value of the Family Dollar reporting unit was estimated, using the assistance of a third party specialist, using a combination of a market multiple method and a discounted cash flow method. The significant estimates used in the discounted cash flow method, which are level 3 inputs, include our weighted average cost of capital adjusted by a company-specific risk premium, long-term rates of growth and profitability for the Family Dollar reporting unit, working capital effects, and changes in market conditions, consumer trends and strategy. The market multiple method utilized comparable public company revenue and profitability multiples to estimate the fair value of the Family Dollar reporting unit. The valuation date for the fiscal 2023 Family Dollar trade name and reporting unit was November 25, 2023.

The annual goodwill and nonamortizing intangible asset impairment evaluations in fiscal 2022 did not result in any impairment charges.

We have recorded cumulative goodwill impairment charges totaling $4,599.5 million, all of which relate to the Family Dollar reporting unit and were recorded during the fourth quarters of fiscal 2024 ($490.5 million), fiscal 2023 ($1,069.0 million), fiscal 2019 ($313.0 million), and fiscal 2018 ($2,727.0 million).

Note 16 – Subsequent Events

On March 21, 2025, the Company entered into a new revolving credit facility (“new Credit Facility”), with JPMorgan Chase Bank, N.A., as agent, the banks and the financial institutions from time to time party thereto, providing for a $1.5 billion revolving credit facility, of which up to $350.0 million is available for letters of credit. The new Credit Facility matures on March 21, 2030, subject to extensions permitted under the new Credit Agreement (“new Credit Agreement”).

This new Credit Agreement contains a number of affirmative and negative covenants, similar to the prior Revolving Credit Facility.

In connection with entry into this new Credit Facility, we terminated all commitments and fulfilled all obligations under our previous credit agreement dated December 8, 2021.

Additionally, on March 21, 2025, the Company also entered into a 364-Day Revolving Credit Facility, with JPMorgan Chase Bank, N.A., as agent, the banks and the financial institutions from time to time party thereto, providing for a $1.0 billion revolving credit facility. The 364-Day Revolving Credit Facility matures on March 20, 2026.

Note 17 – Quarterly Financial Information (Unaudited)

The following table sets forth certain items from the Company’s unaudited consolidated statements of operations for each quarter of fiscal year 2024 and 2023. The unaudited information has been prepared on the same basis as the audited consolidated financial statements appearing elsewhere in this report that reflect the results of Family Dollar as discontinued operations and includes all adjustments, consisting only of normal recurring adjustments, which management considers necessary for a fair presentation of the financial data shown. The operating results for any quarter are not necessarily indicative of results for a full year or for any future period.

(in millions, except per share data)						First Quarter						Second Quarter						Third Quarter						Fourth Quarter
Fiscal 2024:
Net sales						$	4,165.6					$	4,065.5					$	4,338.0					$	4,996.7
Gross profit						$	1,476.5					$	1,391.3					$	1,534.1					$	1,879.8
Income from continuing operations, net of tax						$	267.7					$	142.3					$	232.3					$	400.2
Income (loss) from discontinued operations, net of tax(1)						$	32.4					$	(9.9)					$	1.0					$	(4,096.1)
Net income (loss)						$	300.1					$	132.4					$	233.3					$	(3,695.9)
Basic earnings (loss) per share of common stock:
Continuing operations						$	1.23					$	0.66					$	1.09					$	1.86
Discontinued operations						0.15						(0.04)						—						(19.04)
Total basic earnings (loss) per share of common stock						$	1.38					$	0.62					$	1.09					$	(17.18)
Diluted earnings (loss) per share of common stock:
Continuing operations						$	1.23					$	0.66					$	1.08					$	1.86
Discontinued operations						0.15						(0.04)						—						(19.03)
Total diluted earnings (loss) per share of common stock						$	1.38					$	0.62					$	1.08					$	(17.17)
Fiscal 2023:
Net sales						$	3,931.7					$	3,873.4					$	4,003.8					$	4,961.4
Gross profit						$	1,388.7					$	1,293.2					$	1,393.8					$	1,933.2
Income from continuing operations, net of tax						$	291.6					$	186.8					$	255.0					$	532.4
Income (loss) from discontinued operations, net of tax(2)						$	7.4					$	13.6					$	(43.0)					$	(2,242.2)
Net income (loss)						$	299.0					$	200.4					$	212.0					$	(1,709.8)
Basic earnings (loss) per share of common stock:
Continuing operations						$	1.32					$	0.85					$	1.16					$	2.44
Discontinued operations						0.03						0.06						(0.19)						(10.29)
Total basic earnings (loss) per share of common stock						$	1.35					$	0.91					$	0.97					$	(7.85)
Diluted earnings (loss) per share of common stock:
Continuing operations						$	1.32					$	0.85					$	1.16					$	2.44
Discontinued operations						0.03						0.06						(0.19)						(10.27)
Total diluted earnings (loss) per share of common stock						$	1.35					$	0.91					$	0.97					$	(7.83)

(1) Income (loss) from discontinued operations, net of tax in the fourth quarter of fiscal 2024 includes the following charges: $1,400.0 million trade name impairment, $490.5 million goodwill impairment, $80.2 million of long-lived asset impairments and a $3,438.8 million loss from classification to held for sale. See Note 15 for further detail.

(2) Income (loss) from discontinued operations, net of tax in the fourth quarter of fiscal 2023 includes the following charges: $950.0 million trade name impairment, $1,069.0 million goodwill impairment, $500.6 million of long-lived asset impairments, and $80.6 million of inventory markdowns and $5.6 million of capitalized distribution costs impairment from store closures. See Note 15 for further detail.