Dollar Tree (DLTR) 29 Nov 232024 Q3 Earnings call transcript

Hello, and welcome to the Dollar Tree Third Quarter 2023 Earnings Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the conference over to Bob LaFleur, Senior Vice President, Investor Relations. Go ahead, sir.

Good morning, and thank you for joining us today to discuss Dollar Tree's third quarter results. Dollar Davis. and are and Rick today Jeff CFO, me Tree's CEO, Chairman Dreiling; With

statements. begin, would make we are the company's Before I plans considered remarks some everyone expectations, the that to Litigation of by harbor forward-looking that statements risks could which we and safe future Securities of differ from These contemplated Reform results will those materially and provision today under forward-looking of the the like statements XXXX. about our uncertainties, cause Act prospects to remind Private are to actual subject

XX-K For could and the Conditions XX-Q information on our SEC. results, with and on risk fiscal filed XXXX, and press the ended recently our see Financial risks filings Form of Results for most and of Discussion uncertainties please our X-K XX, Management's Form most quarter, recent the Form Analysis affect that release Operations factors, March report sections annual other the and and business our actual in on

We except reliance obligation forward-looking we any and to law. update statements disclaim statements, forward-looking caution made on required any by against as today, any

our Also the measures Reconciliations directly basis. items call, non-GAAP of GAAP stated, financial will to GAAP available refer we of during are not non-GAAP financial today's measures. these for we otherwise will discuss financial earnings Unless on intended non-GAAP a in section are website. IR measures substitute this the to These results. to provided be comparable GAAP a results our release, most certain on

note on our IR and discussed is a same are selected slide quarter stated, the fiscal otherwise year that XXXX website. the third available deck supplemental period comparisons metrics all outlining for the of are a operating unless section Additionally, ago. Please today against of

[Operator now, to Instructions] Following will our like your the turn over remarks, Jeff I'd Rick. And call to Rick questions. take and prepared

our teams range. our welcome transformation, results In the our towards and and today. of business like brief, well everyone on continued us third I'd expected dedication within Bob. hard thanks to to execution work Thanks, joining quarter the call were

the reduced peers. of top segments, taking affected inflation, a retail the accomplished outpaced benefits in our initial market and of this lower-income reflects where depleted investments environment In share have initiatives. challenging by which we and transformation accumulating negatively most consumers, We our line savings pressures of performance government impact believe our both

and EPS. $X.XX softer $X.XX delivered of share Dollar announced unexpected Family previously Despite the per OTC costs comps other we of and voluntary recall from products, of

new and continues Our dollar customers sales mostly market and be momentum share. unit gain driven both to attract we as traffic

months, Family Tree In we million new the new last XX customers have Dollar. customers million X.X at Dollar added X.X and at

times of most back Importantly, their first-time first us with after come to shop these customers multiple visit.

States. in United fact, In customer the third are customers loyal our base largest the retail now

broader from cycled As was the perception price comp year in X our levels. last investments, short Tree importantly, incomes of July. a strong after price demographic X Tree's Dollar we income Family said, is significant quarter have year's fell income Dollar of customers our which expectations. over value customers Most growth. At Dollar range of That Family Dollar, over past attracting and comp our to this $XXX,XXX, contributor a household new remains quarter

reported, have softening retailers the other quarter, throughout what to particularly October. Similar in we experienced trends

in government the responded in to benefits, notable saw consumers particularly lower-income higher-margin discretionary of reduced accumulated spending, impact categories. pullback As a inflation we and

review highlights. our will some quarter of I now third

from the little came to the resulted million, ticket our Operating of For down traffic impact This net driven quarter, EPS which X.X% $XXX.X than by up a in growth $X.X including sales increase X%. average OTC X.X% third in consolidated less $X.XX, delivered comp income basis, recall. with the in of a billion. was we negative X.X%, at $X.XX and

In segment, by X.X%. comp and average X.X%, decreasing by was up increasing the Dollar traffic Tree X% ticket our with

they of with top results We pleased these especially as an come year. X.X% are on comp last

Our believe consumables as Tree as comp Dollar embracing strained up our at We consumables strong multiyear the up and this our value quarter XX.X%, proposition X.X%. strength customers discretionary comp environment. was discretionary economic compelling in shows this are well was

to grew basis third unit impressive consumables an X%, Nielsen, volume in According ] while our of share the Dollar market XX volume as Tree [ gained quarter points unit market declined.

Family the up increasing with ticket increasing X.X%. X%, Dollar and In was average traffic X.X% comp segment, our

at was home comp consumable in toys. like XX.X%, and at electronics Our strong categories especially discretionary meaningfully decor, particularly down was while X.X%,

how these In goods. increasing their underscore spending directing and stress our financial needs-based view, under trends lower-income are households towards

consumables, for both positive as with we While October soften were quarter, through moved turning ticket traffic impact both negative customers with we ticket OTC the quarter, market substantially with the in exceeding dollar our adverse market the margins. grew average the results realized did Dollar and external by pulled and and as of unit recall. back challenges, Even the these wide in growth share Family

to customers or basis, was have much low in X especially more quarter pressured by been XX% prices Family quarter reduction strength X% a in in reductions XX% at benefits than SNAP which the were down enable on Nationwide, in us a position SNAP quarter X. consumables, reduction Dollar operate of Although third government from the our year-over-year our benefits. lower-income

X our payments in quarter. SNAP the Timing-wise, the quarter month-by-month reductions national comps throughout deceleration the matched progressive in

growth wide comps pressure have competition. maintain to addition tax payments, range I help Dollar's from this the said, will initiatives in negatively refunds affected SNAP to momentum In we relative our that us year. That lower Family by place of lower were believe the

challenging factors positioned control, economic we're don't. navigate meet customers' needs to we remain on uniquely environment. can a continue we value in a to around we'll As and as those we retailer, can the best We focused that that

Now minutes update to transformation let me take a our journey. on few you

time on with initiatives and are supply we on Our date. chain budget, progress merchandising, are pleased to and IT and our

on schedule of ahead we're multi-price journey. Tree, our Dollar At

assortment stores, Tree track available more finish in X,XXX are on Plus to Our than is the we now with year and Dollar X,XXX.

of now of are X,XXX. and X,XXX our frozen Tree ahead target significantly in stores, assortments year-end Dollar refrigerated original Our

Customers least XX% Tree are research that of assortment multi-price multi-price purchased a have once Dollar at a our store expanded to in the from U.S. households as our clearly XX shows responding product us past months.

Importantly, these their are on traditional products top multi-price of customers adding baskets.

multi-price For in average items. X, example, the traditional quarter $X.XX items and multi-priced included XX.X basket X.X

inches as Family stores At Dollar scheduled, resets on product and profile than assortment Family increasing expanding Dollar, track merchandising ] by to the completed year-end. portfolio. and X,XXX our our November we We're XX by while more improving to across renovate [ our shelf planogram

upgraded to and H stores now Dollar Family X.X formats. have We X,XXX rural our extra-small box

schedule, at quarter In and brand a private penetration hit by we X, Dollar are to XX% quarter pace on XXXX. target ahead reached of our XX%, Family

new Family same We to and end time conversion XXX are XXX to also product more complete to new XX of on also private than our Wellness expect brand to in control track line Within the total SKUs add frame, by SKUs we our private over that brands. December. of brands

real our track XXX we we stores X, year. to and in of meet target quarter In new stores new opened XXX to are this on estate, XXX

to stores North our preparing roto liftgate are serviced implement and center with Matthews, distribution process next Carolina our by we trailers carts chain, supply streamlined month. In delivery for starting

centers remain carts, of extremely positive. roto carts be distribution end the the on schedule of XXXX. been roto feedback our testing been and all for our have We using to by We has

company, throughout Across our and the our the at in investments improvements increased store markets, level communications the in teams, made key increased wages satisfaction. we've in turnover meaningful are associate store including people, work and simplified driving

our for to in was work part-time I'm holiday National success. current season an the in prepared we busiest report that huge hired nearly We record the year, our our mid-October stores associates proud event. this all-time season, to as Additionally, for Hiring of annual XX,XXX Day for a

do of in what still pleased we I date. transformational accomplished this am have we've a with While journey, lot to to work

We are sales ability confident I our our accelerate this plans focused ambitious on in execute and grow undertaking. to remain and earnings, to

along changing being way. and That be and the thoughtful help also said, to enhance believe will We about store journey to this results. adapt conditions our needs portfolio market learnings our dynamic our

we store not are aligned have market a considerations. need for our current we maximize initiated Family to reevaluate transformative that periodically of portfolio individual end, terms creation, Dollar and with this of To review portfolio in vision stores To comprehensive overall conditions, performance underperforming value portfolio our our company. address to the

the stores on a the each This for relocation sustainable will identifying among banner full ensuring assets things, Dollar or is that basis. Family rebannering as involve, delivering candidates other shareholders under goal our for value closure, of with its

communities what I strong associates Family it country. and believer brand our customers the in Dollar means am and of in across the a thousands to

is associates. well believe portfolio Family the forward, of and of financial meets full the need and to that for we organization our to brand growth potential. ensure our We operating this Family and Dollar and fortify Dollar valued objectives our achieve Going allow success customers base, will and strengthen action our positioned its expectations that the

financial review now will of results for outlook our and Jeff remainder year. the the

increased and In more initiatives. traffic, continue respond the levels volume did last gross our to growth to generated segments, as of profit both we Overall, market quarter higher our quarter, everyone. morning, Tree customer generated in year Rick, and Dollar you, good Thank third unit and third X% Dollar than the Family share. dollars we consumers positively

This consumables. our was Consistent all-time mix pronounced of sales where trend Dollar, XX%. quarter at to towards high more mix shift third with prior-quarter consumables Family reached an trends, continued

XX.X% in a X points, basis, point substantial was The which a business the sales versus Operating at net basis decrease declined improvement contraction XXX SG&A XX gross million. income margin by was $XXX.X Looking quarters in the rate. compressed to margin in point on margin a of X.X% basis first and Operating operating increased a basis $X.X year. the trend increase driven consolidated XXX billion. to QX

by markdowns shrink, contracted This mix, increased primarily from recall. lower costs Gross the margin was distribution from offset OTC costs. and unfavorable partially higher freight product

our in across While banners, expectations. shrink elevated with were results still mostly both line

completion across our We set physical than more inventory with have January. XX% of completed stores, balance a now checks for in

IT primarily investments from in our stores, expanded costs. depreciation costs, and expenses ongoing SG&A facility labor

XX.X%. Our effective XX.X% versus was rate tax

versus Our opportunity higher was favorable nondeductible tax expectations were partially state rate taxes by offset lower net higher work credits tax as expenses. and

million. by recall decrease business to was of $X.XX. share. At billion. driven XX X.X% Operating income basis increase SG&A And OTC $X.XX margin and Net million, and declined $X.XX to level, approximately by approximately a point per XXX in net income sales net the basis compressed increased was point operating $XXX.X diluted impact points, a Dollar $X segment basis gross EPS $XXX XX Tree's margin X.X% versus rate. the was in The

cost. occupancy costs, and from and product contracted by offset freight Gross partially higher center primarily sales were distribution and costs margin These shrink. lower leverage

investments, were SG&A labor expanded and partially facility by sales offset principally leverage. expenses costs. from store These wage minimum increases

XXX to to Family Dollar's $XX.X by Operating billion. in a SG&A Operating X.X% compressed point on points increase and of increased net basis a rate. a in million. basis loss million XX margin XXX gross margin declined basis point $XX.X $X.X increase sales income

from primarily increases, OTC facility to to increased higher costs costs, margin primarily related shrink, OTC expenses related SG&A and investments, mix. increased markdowns partially Gross recall and offset the wage lower from depreciation. the labor sales recall freight, by minimum

the Moving flow. free on balance cash sheet to and

reminder, QX XXXX. decreased a X.X%. QX sheet and balance comparisons my As by XXXX comments between reflect Inventory

our through position by a we meaningful As imports, seasonal our improvement inventory we work year-end. in expect shipments of

investments the renovations, last cash third the elevated expenditures versus reflecting openings, chain comes Free quarter year. growth store investments macro $XXX.X despite strategy. our IT. support multiyear million, new accelerated environment million improvement improved Third capital This a $XXX.X quarter challenging versus in and were to supply flow million and $XXX.X

to income noncash of free million, partial largely share billion flow the payable. In last same lower authorization. the equivalents our quarter X repurchase compared totaled For $X.XX million. items, for third applicable CapEx accounts million net versus remaining including million cash we led from by X.X months lower inventories, quarter, for the million approximately offset and with and increased XXXX, $XXX.X $XXX.X excise year, timing Cash repurchased the of end, $XXX shares merchandise improved had we under cash At $XXX.X period a tax. adjusted

under additional source You'll announced an we At had million quarter to outstanding quarter, our this working recall $XXX program. liquidity commercial as last our we new end, capital of manage program paper needs.

credit as with agreement, finance the During chain this quarter, suppliers was supply will financial to revolving is program. our Dollar finance new Tree. our a them we third-party program for institution. This be provides leverage, in Participation under third process managed due from X.XXx. quarter our voluntary implemented defined by flexibility At also a end, and additional payments

outlook. Now its fourth on expectations full-year let EPS into me provide our sales impact and our some the and perspective quarter for

outlook and market. throughout Consistent households, expected the expectations shrink remain comps quarter. with unfavorable trends expect Family into to continued patterns have environment remain expectations: year, in in Our macro prior will the weakness and consideration the our elevated fourth following reflecting the promotional discretionary we Dollar factors seen activity and the the takes we unfavorable low-income are for soft,

plus the strength at expect the savings. value Tree multi-price as On strategy embrace incremental banner side, Dollar in addition to we compelling continued our freight proposition consumers and

at supported minus comp that With mid-single-digit Dollar. increase be sales a in billion, enterprise, of for at by plus Family billion range increase X% and to background, Tree comp a in based net will sales low single-digit $X.X $X.X Dollar expect X% the quarter we the on the to fourth for store

accelerated As we price a began in and back half most year, transformation throughout investments notably Family meaningfully comp and reminder, our launched initiatives. the Dollar as last the our labor year's

comp Dollar reflect QX and Family QX outlook tougher for Our comparisons. these results for

fourth $X.XX estimate to diluted $X.XX. be in of range EPS We the quarter will

fiscal single-digit driven range Dollar the increase a $XX.X at at comp level, $XX.X in in of Tree a low to mid-single-digit Family store year, a comp by Dollar. enterprise a at billion, we sales which mid-single-digit and comp the XXrd the For by expect supported sales week, includes billion

lower Dollar With expense freight Dollar. higher to sales Family EPS, and respect we incremental revenue that proactive expectations will to savings allow believe us at at offset controls and Tree,

EPS the range new still selling of legal to by X% a the outlook growth $X.XX we expect first be to the store to GAAP We in year to footage for $X.XX took our including full-year tightening $X.XX, quarter. are and back-end reserve We to grow weighted. X.X% square

million in and the outlook for $XXX share interest $XXX quarter full following: million. repurchases. include approximately range to No the in Depreciation $XX our Other million $XXX expense should should the XXXX for million the fourth be incremental amortization approximately year. Net considerations of or be

fourth We of XX.X% the quarter year. and an rate tax are effective assuming for XX% approximately the full approximately for

We expect and year. for full XXX.X quarter fourth XXX diluted shares diluted for shares the million million the

approximately the $X with XX% We and total expect will expenditures towards approximately growth toward capital billion, allocated balance maintenance initiatives. CapEx

in Dollar remarks. our Finally, full-year impact the outlook any Rick that from QX not the does of portfolio potential include Family and outlined optimization review his

on months, no call we process progress QX We March. later and than will the expect review take in our several you will update our

Now, remarks. turn for back over the I'll call Rick to closing

we we Thank you, Jeff. for am seeing Similar in pressures outlook to of other retailers you've Nonetheless, heard from market the more our year. this earnings than our are encouraged momentum the our by among confident year, share season, in I'm balance consumers. and earlier did particularly the macro lower-income

our our transformation making Across progress are enterprise, on we initiatives. good

metrics per benchmark our As are these All growing before, we I've square operating said heading units the three of direction. right and on performance sales traffic, in foot.

to be customers expectations portfolio, optimize and objectives of steps our we our the and want operating we're better organization Dollar of meet the our financial to and valued positioned the Family taking associates. With to

we to you to competition, at a our of position on months in the want continued look both strength progress banners. from operate Relative forward ahead. our I updating to

growth associates our as since in more want XXX,XXX opportunity holiday of midst we're our to of an than this in the continued And take dedication the support also their season, important for organization. I to thank

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

Our UBS. first Instructions] Michael Lasser [Operator from question from coming is

year, to is to when It's you're about current the your next the long-term than the you question. guidance seems if remains the for environment be you earlier facing, offered of does Number what one a two-part given economic economic achieve this how by your case to that is, different $XX expected earnings influence date few thinking environment XXXX that years? ability your that

there's second going a point is that call to around -- this the And my year. $X it, is question second you're perception earn,

in earnings. What would You get year. next $X the of $X you of of freight that not way realizing generate stand would benefit that? And

Jeff to that. let going handle I'm

your appreciate question. I

through. the your that economic first we're of The longer-term managing believe part outlook, we today, that regarding environment in question the we're

take and Family Dollar see doing across Dollar continue Tree share, You they're consumables. the well to market

that we customer of help into year action many with line, value top next the we're that sort our quarter will put and who actions go is believe into We a will developing as the through still improve especially of fourth looking additional for be opportunities.

longer-term continue is but taking our This resolute a we're outlook. in There's and real to between forward there, We we to outlook. our the early the -- in that there crystal and feel strongly us believe will transformation. to really ball we're we happen lot now XXXX, that isn't that's going remain a actions move

to about and yes, sort standpoint on you think that $X relates this I between got incremental you've XXXX EPS no good take of the week, basis, as pro we $X.XX a our about from point that of which all forma thinking the it Remember, you in XXXX, a growth, year. you're But the As outlook. is when takes way puts no starting think feel our forecast for that's up a to XXrd that. this back about

remain we've some to that, in and based we're started We in for point good we move taking actions the this And believe very upon forward, continue to upside will the freight confident our as There that returns the up from get starting initiatives a and what year dollar we the you. that that EPS. may that's to we additional trending. develop will currently we're be additional pick ability

number discretionary of the on done bullish number. our consumer. we X me want all fact not just of to gain the we are softer We is starting than very let's initiatives the in what's into to And the gotten the as fact that think . And let add consumable lose we've Michael, And I sight responding remain a look why really are of thoughts more on XXXX that. that are little we're the important sales excellent, and sales year getting needs XXXX, traction.

we the have see they're the items we're more what want, see incremental gives the we price Dollar side. when and the that's beyond. and and incremental going points items, fact 'XX they're new to see confidence relevant. going on as profile, into And to come store And they the shelf They're to into great the going me the Tree look that

Simeon from Gutman today Our is next coming from Stanley. Morgan question

follow-up little the we core second should talking again as not business sure? real in think to again, question freight plus a business take part. endorsing the without It's we next that about $X freight, slight we get the should a then we and maybe If core prior guidance, grows about Or grow get necessarily you're freight? the for year,

then when it generating crux to is the higher occur? remind the the Dollar, us you sales step-change? if part margins can should And to of then second just And what's of productivity, that Family going on be

the Want to first take part?

You the take I'll one. the second freight, take and

good. Very

and and comes Michael's way to roughly freight with this was and think, again, off well takes at year, assuming items $X and plus to FY from of be Memphis, of that you the assume what's other for if relates -- dollar it week, the general of as around those again I point the the view end 'XX be additional the a the to was some then trying components, point growth, year together where once had year as EPS, as the a starting which once assuming standpoint no we putting of West kind XXrd believe as OTC point investment liability. a incremental puts I we $X.XX of discrete we'll this would you he off I looking would starting to no think respond is --

We're that our giving point our right your the you based hold have you will take there. there. as to continue guidance components But we focused we and on a not to believe and upon that opportunity assumptions that the what business initiatives think But grow for people XXXX get starting to think are yet. grow from of are how then will from I

be and I and now where at you SKUs, Dollar see are we we're And carry start regards to Family think then discretionary. they which to higher about think which on as . incremental margin should little bulk reflect tend margin, all rates, OTC when I incremental a the HBA, more to now, right the in the of

label You incremental we've massive -- that which about carries already XX%, think the our reached fact now margin. private

how going stuff lot we Family into next be as going is that perform year. roll of of a All is again, XXXX, place on me to gives which, in to Dollar comfort

way no comfortable There's ever than it responding. lower-income out. on consumer. offering to And box But pressure figure very the had. it ability presented said that how has the the Dollar the in there's better very, it's way is consumer always we consumer and a are has I'm I've proposition Family value doubt looks, the with the

I first ] very add we in watched we the good were comps would that quarter the -- when our through [ entered quarter. the period of them the period And and quarter, X, Dollar, erode Family through

we entered very position. it again, a So strong from

from Paul coming from Citi. question is Next Lejuez

Can just talk XQ, about you're comp down ticket a breaks your Family how from about assumption thinking versus traffic you perspective? it how Dollar

BT can And 'XX? you ticket, versus XQ make AUR and if curious about then assumptions ]? inflation your comments within any I'm FY for [

that in makeup. it, has seen a really and traffic. It's here the we we've the think customer about recently ticket off It's as XX-XX. dropped been challenged. consistent What been has way guess comp of more -- has been little between more balance really around the pretty I we ticket Paul, been its is

it's going ticket some probably into offset into -- have pressure. fourth comp, down guidance We're of our the getting think ticket, going But see more not think start further traffic to ] to that driving of traffic it. and by-section other to we're about X%. we to prepared -- as X% we and the by We're continuing [ plus to of AUR going thus quarter,

call I want the we that And traffic, -- on are like look I'd to unit it, intently square things per report And Paul, metrics: foot. believe key you sales we and focused to the sales ultimately, and square three want to that, we are -- comp whatever add growth Transactions, that chain. -- in that on because growth drives those to footage I

Your from Kelly Wells is next question from Fargo. coming Edward

wanted Tree core business. Dollar I a guess, I Dollar -- to you, around two-part Tree ask the question

on continue you that evolution new of should of going update points. how roll points? the You those think an where of time? is think to out timing price price over Maybe rollout the just And we about

does And given is happening there? and the Is as then, units in the very impact developing Family that competitor. of generally, concept formidable you curious And where both concept any evolution from? store go? to the it's impacting it dollar of how I'm like about a where traditional into gaining you Dollar, may think share way the what you're number think growth, those is there units

question. Great

price with start the points. Let's

test introducing McNeely order we with advance year his job Halloween starting the them have buy in with done into these multi-price we're in you a to an and a to Rick stores. almost stores really, And and candy, new number price things on to have arrive. And excited have with a of that. really have actually see We what team points. outstanding remember, them happened and get We've Ed, done we're of to

we're and in different want the important what be is number our that I've -- really of working there's store. frequently, XXX We're -- to point that going price points. don't said to And right still is price core on, anyone it's amount to what Now, right price points $X.XX. think I this going and

that, we receptive is I you consumer -- consumer is year is the very tell broken, what's can barrier a it and going you ago, I the what $X.XX the broke that now on. tell And to have to when -- is was

$X.XX we different his not different adding We're when little incremental a has an more a bigger at point, item were that's value. little adding and added And item Rick that price even or team bit $X. a

SKU no which executed. get us there's harder to more a little makes overlap, So

coming overseas, I Now priced get what it's SKUs the the of from the to add into product. the items right marked, going our properly. and XX% get we've they're work. are going them take price know to already point done on store, to

with been has is been think done. relevant able make we've -- what to lot the to I pricing, a seeing we're more more work So people. of brand that's some of multi great And the the

it's and reacted I a different hard, team we're but also segment. positive proved the that the And the has consumable that, customer way side to I know think, attracting

we mix the are weighing proper fast, Dollar is regards it Obviously, become Family Dollar between the and right now, Dollar what Now in appears growth, store Tree. very Trees to and a of future we've very appeal of a a that is the would Dollar broadened format And that format. I've said And retail it's in. powerful a well-run this, demographic Tree pretty brand. that profitable lot people shop

-- And to we're areas be we've store the that on stayed our our our price getting able historically arms be different from. that to putting fact getting the away go fact we're might that around us standards might position we is the arms points, in a where brand that

is to different at I Dollar, Family would it those you regards are In customer segments. two look affecting say, and

the together The go-to-market we as team brands when that for first different. both are totally a did got we thing is realized strategies

out, an there's you it. bought to got in the expectation more I versus retailing, where run have be if which One get what has hunt to to and and Dollar, time there in be Family it's is should I is come every store, out, treasure the consumable in thrill of of that traditional

basket. prepared where to mentioned of income million attracting that that new just customer, a Ed, we're fact lot in the in or happening actually demographic are the that customers X.X coming A capturing from $XXX,XXX higher-income a greater, Dollar add, comments, Tree in lot And customers is we're that year-over-year growth basis. on of the and that's had we these of

from today question Next is from coming Heinbockel Guggenheim. John

more to the dedicate deleverage descaling you'd stores potential, attack first to quick review, talk or not is your the far quick. back Because [ from cut resources one have the But a also going philosophically, how one that perspective. Two most want right, things you're can you FTL or to hand, maybe but that? the on you on too want to -- ] as don't

about maybe those Does all talk to to that, So Dollar that convert exist? of Tree. the opportunity

you'll then point you eight a just is my years small us doors When remind get cooler is $X follow-up out? X years is that? when think that And Dollar out, year to Tree, at X price to $X at out,

The cooler easy we have of go within Tree let's couple the Well, years. done with next doors, should one. the Dollar

exercise, Now because healthy and don't. think And in we this do idea to John, do. a place do what we me get do what review, thing off on ] I stores of started it's initiatives respond the this I and with to of all thing want everything [ that is timely our not being get what see is ahead FTL the a everyone to very and and

some some will be transparent, and always maybe game. will the of I've a some being all at world stores any tell that stores this close, we're the There maybe rebanner. on not of it. have stage I'm But will information trying stores I relocate, do to is do taking prided that at look will myself

And think that I totally anyone anyone to think I do And And reallocating I It's I'm productive. to because misconstrue want prudent. Family behind of think grow think don't where because that more Family am. I I want at do not be it's -- that Dollar that, we simply going we Dollar to matter assets we're I'm all. to mean doesn't saying can not not a don't

is Matthew from from coming question JPMorgan. Boss Next

November? any what from October? first, ticket? do Rick, traffic year Tree and my side. Dollar what think best you comps Have between about this mid-single-digit banner, So breakdown think to is At at the a comp you Dollar, change in Maybe couple the was beyond in on Rick, the seen Family questions of

landscape? what promotional And then, you in on elaborate seen change could the Jeff, just you've

-- start let's I'll color the take . mean, and with that's let I around and that, the put okay, let Jeff, you landscape, if me it. promotional Yes.

all grocery the you, I at have have an is items out this right there. the grocery and activity the I of you you they incredibly discretionary promotional think ], price being hand. I seen grocery look irrational a think [ being reflex game. on landscape, other the the a on I hasn't box it. of not has the anything there been are items coming tell But tell against get more year people which big which worried grocer, we packs. money I that than on little promoted, historically, and inventory the on about channel, items that, We a Thanksgiving been well-priced all-time will this turkey, stage XX at And seeing a contrary. would around CSD then you is saw basically make out lot lot your elevated of there you

on And first the then question?

as we through question during the the a quarter. started the Family nice regarding a they The was comps Family comps. Dollar course with went softened There the pace. off We of quarter, Dollar

month. challenged has most essentially particular fact our see month the that the to the across that, that for that was of for that's X% guidance of October soften retail. flat continued and in all quarter. And X% to were We the QX you'll the down reflecting entire that, And was plus was us, for quarter. guidance

things we soften saw wood initiatives got it we while a God, have I'd because been on the that, -- that I'm quarter. our we very add worse. could think And it knocking lot how softened, pleased one in I'm in while we through place October, And had here thank ourselves to thing Matt,

from coming Goldman Sachs. Next Kate from is McShane question

Tree specifically just Dollar at income Tree noted ask We to a the at banner? that your range wanted you're We it to with what lower saw Tree. seeing Dollar the contributed broader to specific growth know you you QX higher comp to We about Dollar regards wondered end. shopping of and the end,

And would I I focused base I the we're Dollar a Tree what essentially in on a strata, look customer I lower-income no broad been we're year. would the say think at always what the the say, income, There's fact and erosion seeing in is but the appeal. Tree. say, Dollar has -- that coming is trade undoubtedly, seeing, we're a mean, I higher had same. from would the $XXX,XXX growth, down the you is

X% on strong in comp customer on and -- year-over-year growth I multi-price well also sizable a than discretionary. The still a discretionary we're the Dollar basis to consumable and a a Tree, us that customer, dollar as this, supporting performance showing there. The it's which good reflect back with more to discretionary in in a areas share for we're -- in higher-income consumables, as lower-income lower-end in seeing had on capture growth better continuing because customers very also. probably respect consumable their of but units is

both performance So strong banner. a Tree it's those has customers a Dollar combination of Thanksgiving the as across

Katai is coming from Krisztina from question Next Deutsche Bank.

So on Family my consumer. get you think at current Dollar. towards is to of Dollar big there part question it pricing to digits? so profitability line about on a your Understandably, is But how top peers? you the planning the address track position relative do Family to with back your mid-single was inflection, some weakness how low-end are That softer-than-planned the

to think ability And the but part then not to offset I of potential to drive you're in any that, deflation consumables? philosophically, the banner next of units how guiding the about to next know positive second year, year best

as book line, so regards I first as are items. measure pricing Dollars value In key our sensitive most full there. key items to And a we regards in the position, thing on and our our Yes. it's say, And to call basis out the would in good top items pricing value pricing what Family we ever been.

grocery. we we small as both, right and channels, month, means every do very well so well checks box, we as we're these XXX% in -- around as which as at price We're comfortable parity. multiple at. across the we're big drug, as box well as on And where And very, them have do mark right

consumable in consumer X believe had quarter that in I this been pressure. that very consumer remember, do the in and powerful year It's feeling why Family the -- the I believe is is growth a to we to And consumable for Dollar starting where side that. And we've respond brand. now,

little deflation asked you will be would more about me at would afford deflation. to look think you I I say, items. consumer where I able and discretionary in And a the think position a bit us put

our it comes. the And same So it time. of it at us course, margin we'll take with should help as

options, that for [ respect quarter, fully ability point. important just in that work into getting really one here private With value in add we're customer, drive her the to give us. final going to implemented to that is this the greater Just is for 'XX. Larry and The something other doing ] really his something that's brands is fourth team

more an that customer we that sort there's even we they for to of is within the about have can options So our opportunity more extent value opportunity us deflation, as we think there assort is line. believe as private brands. It's for margins. greater actually looking our that particular how that And price product that provide value, to improve

Next Chuck today question from Grom is coming Gordon from Haskett.

Family store the the how, today fleet? On the Dollar profitability curious and optimization, comp exists just across why I'm gap

more I then for is guess this And question Jeff.

think On banner, and margin XXXX? Tree the how about? each the quarter, line into and the and for ] about What think FPO we to gross should [ between takes the biggest are fourth puts that

let's on. Chuck, comment game intend is call. rather into the an get Yes. opportunity started first this get have say March obviously, as of as the address question, stage And that more would disclose of not to underway that we we for -- we we I it's But head the I the and process at when us it. this, will

expect about as quarter, is question gross margins a your seasonally. first. as fourth more QX mix in driven of me would it Tree margins, largely have mix our and to think we in shift, to additional you stronger think gross I margins expand Chuck, We normally the Dollar by discretionary take would let the around then, And continue freight,

impact other is remaining as we've there of have XX%. the mentioned, XX% approximately our had we inventories, taken that we The

on inventories larger While is expect performance. because the any much on to that your of talking had only quarter remaining don't small we your we portion of overall in XX% portion less different than have much a past, you're the impact the outcomes about a

Tree gross quarter. So expansion for margin fourth the further for Dollar in our expectation is

believe for have also We many of Family for there as impact distribution. is that of on the less opportunities that, to as that some shrink freight, the same opportunity we as also it well quarter reasons relates an Dollar of within

margin expect in expansion for margin Family we'd fourth -- So Dollar. the quarter expansion also gross

Next question Scot is from from Truist coming Securities. Ciccarelli

on Young Josh actually Scot. for is This

the shrink year. headwind margin it's obviously, issue, big On a been this

of terms are You've dealing As you we're mitigation but it? if think about we progress some think efforts innings guys there, 'XX, the on about think in with do early curious you're substantial you or think do with to of starting dealing you in the some where talked still make you the problem?

take innings, early in inventory say once deal making Yes. physical feel headway. do a I we we're would I that The a but the we're is year.

your have make in still see labor. you wait adjustments, these see if to the them of you So fruits -- to these improvements, order

is stores. Now front, certain sight We've up certain of I our in have put haven't we've you, We've line stand the thing And the the moved behind cashier. a eliminated they check certain sales. tell items can important affected to items SKUs counter. we so

move a up, door one which out time, only it thief a at little out mention you an basically that we've the shelf. anti-sweep put counter and And whole the could And but that's I like might lock and say, sliding and also doesn't you I you prevents over move pull this, forgot from in, panel -- doors. cleaning to OTC item coming in

to progress. think we're think have going it's to everything. make going don't to And cycle So through I we're we --

do be direction going I not up. change. like we're the So product to without believe to lock an it's right but in having moving it's overnight

Piper Our final is from question today from coming Sandler. Peter Keith

to little deflation I deflation less for more thinking back maybe fill-in percolating mentioned customers circle seems that just is trips the about could on possible theme and that's XXXX. because more you money. be for a maybe bit competition? out something want negative banners, it have your But be Rick, the to that

because fixed you enhance will do up getting goods So side, on the Tree margin is the cheaper. price end basically it a we Dollar point, so have all the

top but it So I little, it a a say benefit. be fixed line the have can that could It might a be benefit. should

would an argument, the look can the make I it might But I margin again, say side, enhance and line. Dollar should Family the it affect To top line.

additional that dollars. It discretionary an them allow customer also before. customer disposable would in to to that the less they in have would purchases, is The up more those that pick gives And for their limiting opportunity additional our income consumables, maybe they didn't have take today discretionary.

value Yes. give we if a the the bit And more actually deflation, it of and to additional. consumer have add, invest I'd the us allows again, do product little in something

to I'd We've like question-and-answer closing floor comments. reached the further management over the our to turn back end session. for any of or

look for time, very Thank forward talking to and you much taking you to soon. the all

Thank you. and today's does webcast. conclude teleconference That

your disconnect may You your for lines you time, thank at wonderful We and today. a have participation day. this