Dollar Tree (DLTR) 1 Mar 232022 Q4 Earnings call transcript

Good morning and welcome to the Dollar Tree Fourth Quarter Earnings Call. This meeting is being recorded. At this time, I would like to hand the call over to Randy Guiler. Please go ahead, sir.

Thank you, operator. to fiscal to XXXX welcome fourth Dollar and and quarter results. morning our discuss call Tree’s Good With me on Rick Dreiling; today’s call are CFO, Davis. Chairman Jeff and and CEO,

various like may Before I are and the prospects constitute about to purposes remarks company Litigation differ subject plans that in statements. the statements remind our we the under expectations, we would of everyone forward-looking Act begin, for of provisions our make indicated Reform will actual Safe that for from Private and materially Securities results risks those these to These Harbor and uncertainties statements XXXX. forward-looking the

and For the financial results for Securities of information caution fiscal affect see from release to make by other update risk could any and factors, XX-K that we today’s obligation on reliance operations or sections business ended condition and against Exchange and quarter, and in made we these discussion risks forward-looking disclaim these March XX-Q on of our and maybe except X-K our required XX, press and as today XXXX, filings uncertainties analysis the law. statements, statements the please our actual filed recently Commission. revise results, management’s with most the time-to-time We and

Jeff Following take our your remarks, Rick will prepared and questions.

you ask Given to the large number participate, would limit your that questions like of I those that to one.

I will Rick. the to turn now over call

XXXX an for I off XXXX. current I I everyone. fine. news fiscal priorities. detail that of the I good Jeff performance morning am the am review little and and is will good and will our four Then apologize and Randy for update you, financial highlights COVID hoarse. a provide Thank I on expectations coming will quarter am

a with For the to billion operating $XXX.X $X.XX. income of $X.XX of delivered sales, comp million, X%, in leading four quarter, quarter EPS of increase growth enterprise X.X%, of an we

Same-store is continuation quarter gain on X, This sales Dollar at a was Family momentum the as Tree fruits good for X growth Our as result at stack of getting hard share store and is and by and and accelerations of quarter three. X.X% X-year sales we the comp well price, work work believe fourth by teams I market labor just of And X.X% our basis. the are not from simply and and of merchant store our a performance happening itself, lots started. of truly represented performance early improved Dollar investments.

in to am by of retailing to half Tree. century. leadership a in role transformations. been Dollar play been have for multiple incredibly a I for path ahead fortunate be I I excited the part And have energized and

transformational exceptional an have cannot and occurring in amount business. of change I We overstate the team assembled positive this

tools developing people, and the committed chain focus serve productivity to to we And as accelerated while associates and we store are on merchandising our our our growth. We technology better to our to and better operations, that supply improving strategies support innovating this shoppers. fuel do enhancing simplifying

do know experiences, Given drive the exactly productivity team’s profitability. and what prior improved to we relevant to

to we possible potential business am of I and as will capture quickly as the confident moving are We full succeed. this

reflected tremendous at levels have are behind least Family we a Tree clear it’s performance We that this and the financial results. At to and Dollar opportunity Dollar, banner. is decade our improve in prior

to improvements it operationally, gap the narrow will realized our financial we performance. be As in material

finding are improve get As meaningfully we more more banners. to in, opportunities and settled we both

grown. short a list Compared months opportunities improvement to just of ago, the few has

has taken our over experience years, complete opportunity Doing increasingly X to point so situations. what returns Our team’s implementing just to clear longer the become the dallying. gives our initiatives X great responsible shareholders. is to far calls maximize with in that to these in for no has urgency. in There objective guiding is most It other us of months

Our of many them stores minimal with teams are investment. and initiatives, merchants, of lots driving other

some I later. highlight these of will

traction, they more more team, our greatest enhancing supported across a out complementary store already the these better complementary we we are each conditions, these will impact, them. is others. the While the have competitive making investments. gaining the will pricing, initiatives synergy and stronger The the the if There by investments get of our with associate additional the are

is XXXX incremental company attractive are these cost and the outlook, million investments For forward pulling increase is $XXX these only minimal of that returns high-returning return in The in assumes The this as from reason, implemented major once XXXX and in and outlook investments. investments. accelerating reflected these of an our confident investments schedule SG&A yield we our beyond. a will

yield confident These aware cadence many of of the considerations While these these forecasting investments will also pieces, the many economy. make earliest dynamic in are stages we particularly a moving of strong turnaround, quarterly of nature the these operating and of investments, the are challenging. dynamics expense of returns, current benefits interdependence simultaneous unusual the the from in the we pieces

only these for fact, For this will as transformation, of our this reason, materialize. first in benefits they, we year consider

more and team, in we for this feel that a $X leadership Under on comparable of including by through This rates and XXXX X-year benchmarking market magnitude, field basis XXXX competitive improving in are market fiscal and hourly of looking including the order which key personnel, initiatives. are maintenance investments technology made increasing the other year’s to wages, stores, investment position. include corporate, put repairs wages several investments, conditions, this areas and average labor XXXX. and hourly in and following wage estimated of full investments retail wages, year impact We store and us the period new a during and will in

additional investments also in other us made and in our hours coverage, to better. investments and labor managers much execute store and field We help areas

productivity higher these expect turnover lower and and efficiency. attraction stores, labor investments and talent, our and execution improved drive of in shrink wage retention We reduce of will sales, greater

our critical our to excited the are transformation personnel talent. journey investments are field we and associates and Our in about

culture the to deserve operators to our to local grow this importantly of need within give business, our the associates, they We are invigorate tools opportunities company. the and provide they execute and looking them

On recall spoke about commitments with When our store focus straighten standards, this, up respond visits. store on a last bigger repeat them I we standards, them to do with and up, and up. importantly, shoppers an them clean fill our quarter, more basket intense

worker Our of and Mike three new workplace. must work, COO, October. joined the productive operations, work, on we focus and the Mike successful run team in a the Creedon, the efficient possesses the pillars The stores. relentless store

I a in product critical we that positively product our impacts Approving the certain efficiencies sell if get place As in and we associate processes a onto can’t backroom. volume high it’s business, to have it’s shelves transaction quickly. our workflows experience. am

and in to associates so. DCs to in we indicated contributing the we to were are of and that This The not maintained must reduction retail The starting up organization our must we career worker, in store Frankly, conditions and and be as this investments and commitment we as the that their with to have development. our our ability enhance train focus, workplace see. DC successful. enable stores a and process turnover are and we to leadership doing the associates standards. be improve new being We past, combined contribute hire, our believe an retain to will cornerstone are support recruit, wage our

be what We reactive to from are we approach. to proactive consider actively maintenance transitioning

what workplace, stands and stores work, in certified are In for identifying GOLD Look each the addition leadership and process worker GOLD These to clear, across as team a like. understanding store Grand of for teams example of the concise the will well-run Opening Mike’s distinct district stores the region. so regions and a our for serve stores Daily. most a our successful they have vision and look all

these in investments, the call. of I will On our later the address question corporate

$X.XX and the Our merchant primary successfully are McNeely led working Dollar hard. merchandising Larry to The teams by price transition point. through Rick team managed Gatta Tree the

majority we throughout traffic the fourth stores three. XXX basis of cycled quarter, the saw a improvement in point we to quarter As sequential compared these

to and positive that Dollar a the comps is our are the plus XXXX, of In merchandise more X. we $X or flowing multiple throughout product confident at and anniversaried We February, it into XXXX. when begin Tree through stores more total this remainder in stores than And plan another X to added we in point traffic in price be product multiple $X X,XXX Dollar our have X,XXX to this contributor Tree add price bringing we additional Now will stores. centers, positive distribution year. we

multiple store to and $X the double with X base customer basket attractive going each no X least consists we Separately, cooler ice are basket and we these selection responding X customers when in XXXX. cream expanding proteins, X,XXX items, seeing and have Tree pizza, Tree that more, Dollar is positively of our This the $X, an frozen been price which point of from product with aggressively purchased items. refrigerated $X, frozen are at of stores Dollar plus than doors, What multi-priced more to. size the is at one the with the price across

has predictable Day And We all prepared we We set well for Stores get doing advance time Easter bar to transition behind well chain. creative with customers the more and believe options for for now and are The reward. up to $X.XX consistent and easy before. sell-through. slide on we what Dollar were than raise launch have They a delighting carved are no discussion. season. terrific experiencing the Valentine’s and in had it’s merchants stores sales us, more Tree is for ever believe driving now are

improve the have In addition long-term to opportunity to performance operating the Dollar. opportunities Tree we Family a at banner, Dollar at tremendous the

sales by This stores quarter SKU initiative already begun following: have for comp margin-driving XX-inch X. costs. our offering our are you the without to stages. X.X% in have these us the Among have shelf to OTC product have increasing as X, and of HPA, a the to us in a albeit to initiatives to the base our are including our X.X% shoppers. by early store-related and grow enable actions the throughout the contributed quarter raising allows We profit-enhancing But profile items, we in broaden number followed X,XXX height seen, a that underway,

to the continuing refrigerated in of are to cooler add We plans accommodate doors XX,XXX number with expand items. to frozen more doors and XXXX

to is store. per XX doors have goal Our

Dollar rely their Our to their consumable provide Family in communities to base products feed these families. on shoppers

we being labels and brand brands national of our our Chesapeake, many will new brands, and products here half of private be are will include We control redefined which kitchen of Virginia. back are year. These equivalent in in replacing hundreds in this developed introducing the labels, with new test

greater provides and items beauty on to over-the-counter and the slower and nimble to store us ship moving, shopper flexibility. both This including health in needs, improving and margin we which flow ECS, be improves enables more meet are and better inventory our To profitability ability higher products.

Dollar we space are Family we end-cap focused and displays, examples store adjacencies sales that These box. refining just few working teams sales improved in trajectory to Additionally, believe eliminating are on on the improving that flex by productivity Larry’s a Family the are to Dollars ahead. optimize contribute will enhancing better

a continue from positioning be pleased price our perspective. to We with

with gap in and Shoppers third-party and Family We are our suggest data have we that at is new pricing parity sharp responded late the actions key and to have an grocery of customers Dollar two the took increasing drug. amount in to seeing stores. competitors widened quarter

number CFO Davis, over us. just peddling of ahead long-term on will turn making in while fast his of at provide now strategic and great including color will more I quarter now initiatives Dollar and the of Jeff a is October. Tree leading since plan. four Jeff financial key He been what’s Jeff to development progress our mic the has in seat

fourth Rick, same against the quarter morning, and ago. you, stated, year comparisons good period Unless all everyone. Thank otherwise a are

a key In my our Investor supplemental that Relations of comments is to several deck website. available outlines addition operating metrics today, slide on our

total from more $XXX.X primarily Dollar Gross freight by to $X.XX margin costs product partially basis improvement SG&A. billion. million offset of revenue mark-on, initial in higher for a than shrink was cost XX markdowns, in XXX Operating basis income point by improved product XX.X% gross decline a basis segment The margin, This lower gross X.X% to XX increased which offset and cost operating higher increased leverage, X% and inflation sales points, margin. compared was and point Tree mix, distribution. profit to profit or

increased XX points. Dollar’s gross margin Family basis

cost represented last mix, The Family occupancy, was by and higher first the improvement shrink driven freight on in mark-on, margin improvement partially gross initial quarter in This X lower by higher markdowns, quarters. Dollar’s distribution and offset costs. leverage

repairs non-cash due percentage $XX.X DC million of and and impairment hourly store The categories. year with $X.XX maintenance a our wages standards. to as of XX SG&A and to charge were basis and $XXX.X Investments a along Corporate revenue was distribution $X.XX costs increased X.X% expense ago. as consistent points commitment EPS elevated store increase XX.X%. to Net a is and improve across of several million, expenses comparison store support at income and inflationary revenue. center in was to in other part

sheet, cash store receipts are Dollar expansion growth growth Family $XXX to the XXXX multi-price and pre-pandemic balance totaled at a from increased including and balanced and will end of growth at of product the expansion unit spring cost $X.XX inflation, merchandise, Units freight, from level with Combined similar period. of plus unit store to my primarily per Moving Inventory XXXX the compared to and new early reflect combo the inventory. QX and XXXX. million XX.X% versus $XXX QX equivalents comparisons million. cash comments associated

is inventory dated have limited we levels. well fresh, inventory and manageable Our within

the were $XXX $XXX.X in fourth expenditures million. quarter versus million, Capital

XXXX, billion. programs. what productivity and stores. we and improvement. conveyor store projects. replacements and fiscal More total to as enhance is protection to DCs approximately as improvements compliance our DCs for HVAC enhanced consider and this operate facility stores improvements to well permanent facilities, business for and our optimization freezers related to this For and business we growth include remaining $X safety expect Of DC and includes dedicated for run would characterize safety coolers, and distribution The be the would our capital asset expenditures XX% cooling we building specifically, XX% continuity continuity for projects and $X with billion, projects

and efficiencies to and optimization center projects projects an distribution improvement our stores, Our include XXX new enhance growth support productivity X,XXX renovations, store and will approximately numerous growth. estimated technology our projects

factors. sales XXXX EPS Our a number and expectations incorporate of

a First, this XX-week year. is

approximately and fourth $XXX this by in in diluted sales $X.XX We will expect quarter benefit the EPS. million

cycling for expect mix to a assortments pressure where last year, margin are we outpace benefit rate the are initial produced as point. the Also our expected to both and to for of evolved Tree’s outsized segments, we pressure half from discretionary Second, it transition Dollar the inflation XXXX margin in first margin the price from merchandise point cost $X.XX as sales. to price new see consumables continued we XX%

Third, realized existing nearly a import of long-term the charters of our second our all will freight $X share expenses half. with approximately outlook volume rates. of that per benefit contracts half XXXX includes container benefit from at at or in reduced Approximately remain fiscal elevated

with additional market XX% majority fiscal of XXXX. the volumes, half approximately in these Dollar an cost freight fiscal volume support We rates remaining $X anticipate XXXX we a meaningfully savings, XX% expect in freight lower for of rate the gross the renegotiated rates contracts in profits impact and fiscal which These expect of will our in container within margin freight range realize year. of lower If Tree relief operating for year. on the to spot which limit the XXXX. current The will impact XXXX persist, of and XX% approximately the to we factors conditions segment realized

operating across corporate. two and and Four, include are outlook company. in $X.XX includes wages, $XXX million our the investments as per in approximately between repairs we corporate accelerate evenly investments or maintenance expenses investments banners our and labor to store split roughly These this and transform share

activity, to economic volatility interdependencies of and precisely initiative transformational of of Given magnitude amount timing it investment related is environment, returns. difficult the and the the estimate

investments already benefit as investments, in and management’s Dollar back will that by XXXX a and returns these are strong in actions at XXXX results half these Our recent and is once There is implemented, evidenced only assumes Family yield investments. yielding XXXX Company Dollar of the trends. from that Tree our outlook evidence minimal beyond. attractive confident

in tremendous from While meaningful this this our Dollar ahead. the year, profits and produce is are outlook opportunity contribution sales assumes we Family Family and and productivity to Dollar will years opportunity minimal profit margins realize believe improve there we confident

continue to and operating will and tools performance to technology conditions, people, drive growth long-term we on store Finally, improvements. focus

the decline as margins XX% dollars, on EPS second in We XXXX half well growth week by we accelerated in these factors, second week of the includes store followed half the in expect which anticipate half half. the teens. of in approximately first approximately and will in We inflation, the low and to comprised XXXX, the estimate of and expenses QX. will as new be extra expense which investments first gross confluence operating XXrd the SG&A Based in general includes year-over-year XX% X grow

range Consolidated full are fiscal for $XX.X billion. the $XX.X from XXXX net sales expected to billion to year

for mid-single-digit to increase the Dollar segment square X% in Selling comp a to sales comprised and to single-digit store segment. low low Tree Dollar a year, in increase mid-single-digit grow increase Family the expect X.X%. a from footage expected We of is the

year Our XXXX. is end expected $X.XX. new to back be store to this more $X.XX will openings weighted compared range Diluted and between EPS

we same-store will range billion QX, be are forecast Diluted net per billion the sales a $X.X based For earnings mid-single-digit range to in $X.XX in for for of to on from increase $X.X consolidated estimated sales QX the $X.XX. to enterprise. share

While as billion share share the included $X.XX January we remaining repurchases our are had not repurchase outlook, XX. authorization of in under

expected for the considerations and to range to $XX to following: consolidated from and $XX Net $XXX XXXX million be approximately include expect depreciation $XXX modeling in million the interest amortization the we million. year. for million outlook expense Other QX is

share to QX tax first million quarter shares period. million assumes XX.XX% for for full Our for to average XXX.X outlook the XXXX Weighted the shares rate fiscal year. for XXX.X counts assumed diluted be and of and a the XX.X% are

I’ll now turn to Rick. back the call

Jeff. you, Thank

fast. moving As an organization, we are

are spot that convenience deliver and retail. value one. quality, We continuing both driving flight climate are higher believe income steam is gaining in quarter in the value and a today. start we current in shoppers is more economic to need into are nice are off momentum The right segments to initiatives as operating the consumers early Our and

the to ahead to Before accelerated the of on contributors tools Group to that us, to our I In unlock future Information are opportunity vision a success. we want two performance. impact right our clear creation enhanced the order to Technology supply and Q&A, place has projects will we and additional Aflatooni chain. have our in technology they greatest growth. Bobby must move and briefly prioritizing discuss support have value technology

speed fueling some increased the of expenditures Some projects, operating and expenses. capital are these our

year the captured included and outlook. projected spend this in for All is our of

Flanigan John to enhance of And a is they have stores the need and team great supply easily. work merchandise the chain doing ensure deal upstock and it can efficiency

the our products We have case-by-case DCs of from at much John of This running end big forward stores. the least and more one especially and will new year, our up get DC an in inefficiency organization to the then onto our into and approach to by XXXX to for process. and our store handling and enable beyond. efficiently us trucks step identified reliably our current for the has process come having on This a eliminating associates. manual more should which for be committed our

period I our our believe is and change a is buildings. Tree’s great company’s achievement very it only have our organization. year very of were for independent are of by XX XXXX. a change for In the company ago. all time. of website, auditor, recertifying practices XX listed represented this to demonstrates an year, substantial officers we in Dollar XXXX to two the in Tree XX would the begin associates That Dollar DCs The company proud good of of clearly the like good clean months commitment been on Also, on to with back. third-party distribution teams DC deal process already run our Of short the a our and pat past certified to

transformation embraced running as the share I’m the to my creation journey as our will we field got only is all transformation to new be the shoppers the like dollars imagined careers to than us I welcomed and day. XXXX stakeholders. the I track. One have support long-term friendly and stabilizing retail to team associates Dollar our us. not success. in, to change me leaders joined value the of my investments capture our organization. XXX,XXX This future gratitude would to a our each associates to make saving run is modernize reflect every create the ahead our I stores about business on clean in that transform to of back The process, sincere operate day, have their which develop long-term It’s about that before but inflection and to organization and dollars This includes able remarkable places ahead in on is to our The and the point spending opportunity very be to business. value unlock as company commitment serve the and by we value of knows long-term bigger they full, for deliver and store To grow that want in right and our Tree I not team. clear. company

we forward could for otherwise XXXX, Jeff from outlined, fiscal prior expect And a certain pulled earnings have step years. investments extended be consequently, the back we to XXXX several that in year. been As into

earlier ahead. an put shareholders. and forward. in This our believe will about is a us higher investments an this We of years as as path returns and for We’re it means for we the this maximize and returns on acceleration year move growth in approach to acceleration excited earnings initiatives important that

over the progress Virginia, its Southeast outline being June. our several and to first leaders ahead will the we format our in We our this for years Day be there, in Our transformation do the in are vision here eager to along currently to so details more we Investor get a on for path more share way. planned as events of intend and and structured the

service and Witynski to take shareholders thanks it over wish for Before to we’re and you contributions. the of grateful turn I to questions, employees, like Board, best. years extend I moment of you on would Mike the all to Mike, to his a our behalf

to questions. ready and I now Jeff are Operator, take

Thank ahead. you, Matthew Instructions] comes sir. Please First JPMorgan. [Operator from go from Boss question

Appreciate color, better, you’re the all feeling Thank. Great. Rick. and hope I

you, Thank Matt.

opportunities at Tree, off have break seeing kick elaborate now in that forward, comps stores concept before can larger picture, to success going the the break dollar, the buck? Dollar and sequential in maybe to touch then decision maybe $X on you can that how lapped on relative for $X improvement the to So to introduction? the just And you’re of best separately, that about think item you the

The first, Yes. answer, Matt, the to is $X. let’s do $X one the last

We’re is manage price very that for only multiple create table. pleased. the And and but the now the product why key on ability approach takeaway store’s is customer, the we’ve which the not is everything taken selling on that the it confusion the to points not

substantially very as but look more get it. we is larger the count the basket. multiple improvement, not and at importantly, the what’s that, in improvement, So the it’s And price basket when sales, I that we the on the pleased transaction know in with only points going the

pleased. we – very So are

excited. We’re cycled measure we’ve going what’s that on now And true getting a on. it, we’re

Family just switch over No, no, Yes. absolutely. then gears And maybe no, to to Dollar.

Family you digit Dollar? elaborate that with change the is gains on in long-term for there And the return? get share with what the the that any seeing multiyear to could any straight investments. you opportunity operating is, to for you’re comps I’m at So high margin visibility trying the mid can single-digit single market guess of I acceleration share just now quarter, second

And that share of be talking starting the want a gaining more spend larger while thing the share. sort Dollar not And gain wallet. about to will a lot also do specific, to it’s Family is of Investor We I time at Day.

please. Sergey, next question

Securities. question next from Truist Please Scot from ahead. our comes Ciccarelli go And

doing, you are Scot? How

to need years, Good to accelerate X think in you that you? understand guess But in a hear are plan a in we remarks all the your is, of what about earlier I a you longer. achieve you. on investment business. follow-up made X to takes bit of comment to usually kind little Rick, question, the How lot which a second I

list starting could a see So I question mentioned, in growth of beyond? guess should given reset ‘XX? in and we you as we point view growth that the to is, or pressure kind just and ‘XX ‘XX projects continue growing for earnings Or spending investment ‘XX of

‘XX will would as be of Excellent and think I at utilize question. basic. set I will look ‘XX – in more kind the ‘XX us we getting level investments and

it You’re now. investing won’t anything of tackling the magnitude in we’re business, the always be but that

And short challenge you’ve much it. question management is in time. at in that to could retail you operation of past, the induce second there settled at how Family new think period a this Do of in Got a a Tree, then just team of the as a limit is can lot Dollar Dollar be change turnarounds a kind in Rick? the point, natural

experience the I willingness are to those so are made here. far seeing viewing have couple me Dollar Dollar organization. team get of the for experience Another team, you, really Family amount tremendous a great things drive Tree to the to organization the new done here, never – believe going with you married composition there an here. question. The the seen observations Scot. of is of that to It’s becoming and help is more time And us quality employees they them They seeing to price the wage, are seeing in investments it positive. the they sales in change and and I clear that we spend I’ll make people Then drive seeing older seeing in their – couple performers, are faster. store the with made we’ve a what be The of changes. accept they this are facilities, of terms and in all we’ve as like I’m dying And to the are doing. we’re XXX,XXX in investments believe high company that

Got it. you very Thank much.

Thank you.

now go Bank. Krisztina We next move to ahead. question Katai Deutsche will from from the Please

for the starting the on store share that price market been you is Hi. and certainly, it I does mean, Dollar. Family morning. investments question. taking the seem follow-up I years, just to that to with And has Good thank actually over wanted change. but it challenged

remained important of positive which multiyear, Like for on most work there? do traffic, strategy critical but here? it the a on the to you to a negative So year-over-year arriving to how question components model also is the inflect And so are that? what unlock envision how actually basis

Yes. most maintain are I do as consistent asking against I model. operating here, is we thing reflect our on execute can what important the store standards think and I mean you

all what their terms responding are know it is and responding They in they look you And the labor initiatives what are We designed at to take not of wallet. to in out of of of I if with taking think labor, trying Even share. place, are you have what’s look store – Krisztina, responding are the a place, doing it of in are that to store. we terms are the we if experience. to market that do share for consumer we bigger we and all putting

so to could customer-facing work that on more We trying eliminate activities. spend we are

place That’s optimal the regarding just been great. in-stocks? far how in-stock just but levels has And that are touch we Family again, improving is in quick Dollar, of and from since follow-up, levels, team how a can new you on

on of Family initiatives Dollar. Yes. is the in-stock I would say at in manufacturers building happening. retailers Several allocation. one level things are of have A the lot this key the

affecting order might everybody is if get So, that And cases. XXX now. cases, you XX right you

inventory The the if it’s if we system a product. order not we is that will we of other properly, time on-hand perpetual is quantities have right, discovered, issue long showing period had not we and a the system use for system are – have

talking I going here, people now reiterate initiatives. key are of of in-stock around a up, one about are we but one our process truing – through of of So, the tired me is will and it that

of luck. much and you Right. so best Thank

you. Thank

Instructions] go question Capital from Our ahead. [Operator Chukumba Anthony Loop Markets. next from comes Please

much. Hey, you recovering to from hear bid. are you so good Thank the

I hour, So, investments. those clarify, I just talked you. understand think just $X so Can to because I wasn’t quite walk Thank wasn’t better that? you sure, to wanted again, about on I of that but wage said sure you I you sequencing that, the through wanted just an

Yes, sure.

bulk at doing that hourly of looking what is where are not is. the investment wages, only market-by-market. are We is we And which the the

astronomical to what our the of know and field seeing increased we when manager. are in And We all and store and know the shelf wage when get our that the on ensure turnover know, better the execution, get We structure, that which looking they we the are we been I would the proper has slowdown. we manager team, the We have store morale shrink. coverage customer it’s do have at We we are looking district better store. coverage. to better the sees then also and better that are we and call at pretty get and right proven we retention leads standards also amount we

a it’s So, broad-based approach.

Got to you it. Look forward seeing June. in

Thank you, sir.

you. Thank

UBS. go We from to from ahead. move question will Michael Lasser our Please now next

lot morning. Thanks a question. Good for my taking

and frame few So going are for to what been going of investments some it’s is be, return are structure on Rick, investments look, to needs the we at these a and later the get burden to last business quarters the cost be and to what message today we date. this where is, to quantify going the to lot with it

that return of fixed framework a the it to just the terms time on is at return the quite you how cost, are be on a year, achieved Thank more may what on investments bit of you going investment you the you timing million to that, it’s are and to enterprise one-time to investments to maintenance how in get between nature least So, that are margin if repairs expect back investing much. $XXX nature? part expect these level in look, for for those and in that historically. operating very could more sales the as And to take of on and this the breakdown structural perceived them that nature how of wage you leverage, it that give flow does the the

This Michael. you, is Thank Jeff.

of earlier, think we Rick about are returns, the and are a As to indicated that there investments. had number related interdependencies these

complementary to time upon XXXX are we to execute this our XX,XXX to can our accomplish of with are will So, are us doing these as what – other we a are able imagine, and through initiatives. it take course that. investments of stores, Those the being interdependencies store and dependent merchandising against you against all lot

we half done. XXXX, early the have seen some on that at have of early tests returns back some and We

interdependency So, as will But returns minimal. that as, seeing the well we as year are believe somewhat quite of we an impacts to are honestly, uncertain future have what and a years. we confident this be of combination we will in that between improvement all execute trying the in this The environment. macroeconomic two these things,

level in it this it speak to as not to point saying actually specifics us for it because relevant is minimal any at any are time. We

you. Thank

Securities. move now from ahead. go question will Please John Guggenheim to We next from Heinbockel our

Hey John.

are How you?

Good, sir.

Excellent.

seeing terms against mix Can right? limitations. Dollar getting you the when that going terms point And think MPP opportunity huge in a about far, you of coolers or right, cannibalizing you again. coolers. because you it’s right, expanding everywhere, an opportunity, that do consumable three in been the business to FDO about consumable out, on, issue? not too I of right, touch right, rolled forward Looking How either the of think price know guarding at beyond historically, that’s then Tree, if

question. Great Yes.

grow the think I the will think basket. there item have for frozen the we is I and non-consumable on together the right in drive of basket a is it transactions. now. consumables to stores. and consumables, there it’s that’s the and in consumable an how I I $X, a is appetite this, is as perfect reflect challenge what figure And to but the example out $X get a a And say do food a – balance, $X item

We very, be in offsetting selective the they a store. this quarter. it’s very we without very Dollar consumables, the introduced are the John, we into over and approach. silly, to as doing last mix done at in Hey, And last ice but the over Tree put Dollar have quarter, sounds So, going Tree we bread look well. it

here So, methodical our think important it’s if nothing, it. I it’s manage way we But through can is process. that opportunity a but what’s

you. Thank Great. Okay.

question from next Lejuez from our Paul comes And Citi. Please go ahead.

Hey Paul.

Brandon for question. to on on Hi Cheatham everyone. freight in This the I taking for Paul. want Thanks costs. the is dig

Just you would your rates you able something bit costs you more spot are business wouldn’t where be to on the on to I little why Spot go benefit negotiate that market. a contracted, a want expand back that curious that freight imagine are looks partners to real if time? and below can like in the just be being experienced

So year? of can just you on timing next curious the dynamics there year and this if Thanks. benefit the that some of and expand

Yes.

to couple pieces So, of this. a there is

partners so, volumes those roll part and of the not back to are particular all us ways portion XXXX to large that’s will of have XX% that to we the And and we now. that reduce are of rates. or starting off off, business XXXX. that contracts for why any of extent sort or is spot charters the where charter given the can for a long-term that. our About But our challenge our contracted And year do that and late supplier where contracts, teams for also of of do the First our advantage right reason contracted about looking until to extent that and rate XX% going our always available. scale take is costs our that the they we are is

freight inventory of our The we this our that capitalize into other element is cost.

is the as So, capitalized roll is over one next Xx, cost. part inventory our have year, extent that in let’s the that to year to say, any got you turning, to going particular your of portion that

a timing of reasons carryover and continuation freight expiration the XXXX. roll it’s cost So, over the to reductions be off. to contract so freight two that those in as contracts things, then we the you the loaded will us, of be renegotiation. also, further from we But more the year of to X back-ended next It’s going of XXXX are have carrying of benefit those other for be why going into combination have a

That’s helpful. you. Thank Best of very luck.

next BMO Kelly ahead. Capital. Please comes our from go And question Bania from

Hey Kelly.

where your wages this bit Good you once can us if in the you of particular, industry? operating a understand Hi. starting questions. can this our the $X wages, expense in the just you And ahead curious if brings rest this we out wage average, line the compare your is much taking the morning. get little help of the to Thanks peers Wondering talk is $XXX with labor Just bring peers about and called how for does of or would your million increase investment more how rates? that implemented? in

we items. $XXX realized I answer the I is The I question such the so we for are what I to and million, two-thirds earlier, will, chain. what delta, $XXX appreciate in related doing things if are supply that Of of doing sort our of is doing didn’t about standards you that wage-related your because standards, IT, store wage in around we are question apologize.

brings not teams. as gap relates more hourly marketplace it rates leadership us bringing closing also us We it on wage in wages, it’s again, then it relates for competitive as the closes it’s $X, the but our As to definitely only gap. believe more us of collectively that, field it once the competitive the to

sort $X the that any increase about it X a years of but hourly of XX% average over represent. course would rate, provided haven’t We is the

in a have $X very you freight, guess comments of very but you helpful, is, a over recovery would helpful. freight And increase provided I of have – the the couple freight costs had on That’s the that in Okay. full or next outlined over that of be few recovery? that the a significant years. just last are reflect partial years, would sort the one only another that you assuming question really is

outbound rates inbound as you seen versus those to a is particular reduction which costs, And included to not is elevated and All freight import as be am levels One, and recovery. back I have freight, the Transatlantic this. XXXX. or rates also, its entirety. in of components those would XXXX There this. sorry, at portion, but in to three a there only freight on partial are return think you not of a rates to Also, more have and number everyone – fuel. want seems It components be about continue of focus factors is ultimately XXXX really gone freight driver chassis back to only there costs, all significant to

not as recover freight these would that this seen we – to and its forecasting going XXXX. do in which reductions at not look are we entirety, to So, cost is have comparison we we

you. Thank

apologize ahead. – please to move now will go We

our question Telsey Please go will move We Advisory now next to Joe from ahead. Feldman, Group.

a question. investments for are Thanks I making. guys. you that taking hey, Yes, about had question guys the the

both outlined Dollar have the You the Tree side. Family Dollar side,

decide how am As you and think on investments balance between store where improvement, it’s but you the side, to just Dollar you two curious the more and I each where feel how I to presumably, could you could by, brand Dollar of Family it Tree more – too, allocate improvement, a think surprised I because issue? like maybe which some need for but address was it use store actually store is sounded little Is there improvement. you that the

that, Yes. take jump and you will then in. I Jeff can

to Analyst sharing is first that I potential both on we and say power earnings there, banners. look And the in long-term with to is The of want there believe the we forward thing I think Day. everybody

I ourselves, we can the the that are work care, ceiling applies go honest care, if floor list which I of both quality the both banners. think are, need the down banners of we gondolas, with to in terms in facilities lights,

Tree think shows is has in terms Dollar you the banners between the of in two planograms when other, look it. at up what difference one standards versus and the I in no store

sins middle shelf. year, grant. merchandising So, have shelves And rusty inch up get and strategy. up put And when will square when you when the do more Dollar, problems you the a to lot we show planogram that. it’s done stuff the of be we of of based a on by out stocks, Family get thing applying easy just to every incredibly covered of that

a look have tremendous and of say, you would lot amount both a power. have Both banners long-term at stores opportunity. earnings of I So,

really So, balance. in It’s about it not getting a done both. it’s more

this are income mentioned seeing you does That consumer we into your that have heard that playing I the or great. trade-down Thanks. of seeing factor are from the Got trade-in had out? you consumer it. would see know year? as health And you how forecast it be earlier the health all and That’s Thanks. But Rick, how well. helpful. And consumers, which about higher

a consumer is making trading timing Yes. I that’s mean is And are $XX,XXX everything. we is what the seeing down. – year

But many way that. to. don’t planning We our a as experience go. are far as so do long for on to can are they They doing we relate an that with outlook, fronts better no, having in

it. Got

Okay. Thank quarter. you. Good this luck

Thank you.

Thank you.

Stanley. We Please will from Simeon from Morgan now take our Gutman ahead. question go next

everyone. on Dollar. Family Hey Two-parter

comp, the it traffic opposite. on the given some we First, than the It’s of would ticket price have expected investments. be to more

the So, a and maybe related on to that margin. last diagnose customer step of is maybe peak give composition? basket EBIT with a little a is happen us change a question on bit and There And was that twist Dollar to the how asked then spending before. what in second, should it’s Family

generating business inflecting. you. is the you some Thank curious keep in know unlock? Obviously, profit. lot a profit to have isn’t assumption rate, the for to needs of that, but a what’s are or I is comping profit there or profit comps is lot of happen that at this there there really assumption some the Your that

towards the So share of But [ph], larger shift every wise that think seeing wallet. like more consumable composition what we I we I other in seeing think are I a is do which the terms are retailer, consumables. comp we of the out. basket, is called improve, think of are transactions seeing

increasing. is basket the So,

said, the perspective, done, with have of as widening maybe Rick But pricing grocery in against as we the of, merchandising, convenience. will, market, and improvement things, multipoint are QX excuse work add two is you reduction basis is we traffic of from We believe that gain a the to in one, parity to there sets – competitive that. there saw our going So, quality the relates the One, if been opportunities to if our well from point it also we me, pricing reflective Mike gap as traffic, a to presenting. could QX. to has XX our that as a I had respect as

Family to things top we overall last of that such you at We we for levels profitability, somewhat productivity and also because improved believe a will exacerbated able be as margin. our And improve as of off simplify its relates And from basis. as function as building stores being of well combination a the us with of we we of procedures leverage to of ability base doing, to that of operating line still – prices can and investments. very a the continue as are recognized. encouraging those further its perspective, economics it P&L that Family then is against step those versus up, Dollar on year-over-year drive it’s that The to greater there Larry greater things that existing we believe profitability. private traffic a that two Dollar on will ticket accelerated its So, is label drive generate from it higher gross going is about that these piece gross unit talking relates from as Dollar is perspective, help we margin to drive able right well margin are additions us from now to levels perspective, lower more that’s that, the a a Tree,

now sales, over and incurring the time. we line these margin are gross of that some then leverage period expenses longer top of improvement against So,

how has is to know fix problems said there takeaway all If it’s I structural no key with I and one either, been we could what add thing, think fixable on is the it.

Thanks.

you, ladies and gentlemen. Thank

time. will final Randy it turn allotment over our reached have We I comments. for to Guiler

you Thank you on call for have day. Dave. today’s joining Take Sure, good Thank very us care. much. a and

concludes call. your Thank This participation. you. you today’s Thank for conference

disconnect. now may You