Dollar Tree (DLTR) 5 Jun 242025 Q1 Earnings call transcript

Hello, and welcome to the Dollar Tree Q1 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

It's now my pleasure to turn the call over to Bob LaFleur, Senior Vice President, Investor Relations. Please go ahead, sir.

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

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

For Results on Form actual and X-K in Management XXXX, information and other could report Discussion that see of our with recent risks of annual SEC. on filed Form Business affect our uncertainties release Financial Condition and most Operations results, press Analysis the on sections and our the XX, March the and XX-K please risk filings factors, and

the certain release provided of non-GAAP non-GAAP discuss We any most IR Also website. any measures on these financial statements, forward-looking section disclaim financial directly the in items measures. today, GAAP we any available and update to we to obligation comparable as on against earnings call, will this required by except reliance Reconciliations during statements law. made are caution today's of forward-looking our

on substitute GAAP to intended to a not for results. results are be will measures basis. stated, a non-GAAP refer Unless GAAP These our financial otherwise we

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

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

would to of today's number to who question. the you yourself X callers limit session, ask we participate that in like Given

the over I'd to turn now like Rick. call to

our today. call in on gratitude remarks Dollar community begin you Marietta, devastating I'd and my Tree my for morning, of our Good joining today thank Bob. the by members like following Thanks, heartfelt us extending to Oklahoma. to tornado

there, am resilience While Dollar one I in proud the tornado especially also of distribution facility. was our this thankful by no extremely the in injured our our team tragic the I'm Tree that of displayed aftermath event. members destroyed center

Fortunately, on we broader our disaster also this leadership incremental families believe The while absorb help we expect disruption Marietta a operating hotel keep level distribution associates is in the Tree our to network to Dollar store at temporary a flexible and With highly our their impact associates, at costs, and time of local of wider need. support their community. mind, we to a will is this set to the in sensitive we minimum. up site team

other food in such supplies batteries, and essential brought chargers, We as diapers and toiletries.

Our over associates response have a and in $XXX,XXX services. grants health access immediate to mental

of difficult periods by For you our in these that everyone organization character strength the everything thank recent impacted the It's you've Marietta, through. to during adversity I this done during of want and shines situation time. for

Whether decisions, mind. of or the it's serve with our always top they disasters strategic and natural communities important dealing are associates

differently alternatives each our a earlier strategic are appeal separate of of business. today, you review alternatives sets decision formal Family announcement explore in sure to I'm includes we banner to strategic owners. Dollar how different might As saw initiating the The for evaluating

true to by might allow separating them X whether includes valuation completing leadership accelerating X It businesses best could Dollars Family potential. the teams and of accomplished dedicated and their reach separate each enhance the be also growth Tree's both evaluating Dollar performance transformation individually

some me Let provide context. and additional background

process XXX underperforming required could and investment fix underinvested intrinsic been review was the value. journey Family not been decision for its them to in this years and fully had stores. multiyear a of capital important return. unlock stores our to rate this to and of close We portfolio in organization on transform the step these deliver have An Many Dollar an acceptable

and should Moving business. portfolio forward of help with accelerate a Family streamlined long-term Dollar's the improve transformation returns the

out While aggressively and we our Family our bankruptcy. transform pursuing recent of $X.XX Dollar, like offering banner transactions accelerating accretive of are our by store multi-price to acquisition the up we only XXX working of Tree openings rate to Dollar to continue grow expanding stores the new

our that the stores highly banner average. Tree These to profits well and above portfolio are to expected are returns Dollar complementary sales, and are produce

ownership are look to openings its later each its banner the of a banner This enable stage Family respective different own journey alternatives for proper this Today, we year. their so right has structure locations support why each best the unique is thorough now strategic is these at under Dollar We conduct Dollar can to a and transformation. Tree its and review believe and time determine of and bring what to the needs. of set pleased forward is to operational we is

allow to to right necessary the each Dollar the creation want needs of to we In the the capital to At Family business. Tree end, and that maximize the Dollar ensure should unlock banners have in and meet strategic, banner. customers that us fully value Tree structures evolving time, same operational Dollar both the their the value and of

associates opening, of are us. top I As for our said serve always and mind in communities the they my

of without in Family years, families role Family would the incredible For played more This neighborhoods important do America has an across dedication associates. be with less. helping by incredibly our Dollar XX Dollar not possible

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we stages that of said, still this the early are very in review. All

of wide process range We the have regarding of not the judgments any made pre eventual outcome potential given especially outcomes. this

until specific disclosures this action are updates determined or Board you to do be of any advance lot and thank the manner. that not work you understanding approved and provide sure necessary. there further unless done, a I'm appropriate is As appreciate, to or a your can of I we in has intend further for course on

results. move our let's first quarter to that, on With

quarter adjusted the and range. costs at First our These expense end freight the higher EPS results of outlook management of quarter. $X.XX careful reflect during was favorable diluted

the of right key units. the me times say growth retail pleased per fundamentals in and to heard in many I'm X move that X And foot to are You've transactions, continue report sales all in these direction. metrics square

segments, and highlights financial Let in the cover to basis, by key sales consolidated billion. traffic X% quarter. was now the that a X.X% increased were a driven by was $X.X In lower me average gains Tree offset average some discretionary by reflected ticket. The net traffic average in increase declines comp demand, was decline offset both segment. a in Dollar On as ticket partially comp growth particularly weaker Enterprise X.X% partially X.X% from tickets.

comp in by comp Tree offset a average X.X% own in on consumables X.X% on noting and X.X% comp discretionary was X.X% traffic, Tree's X.X% increase customer right, banner. came of respectable is it Dollar consumables while X.X% its performance comp increased top its by decrease in X.X% year. a a comps declined worth at that Looking partially last is this ticket. Dollar consumable

quarter was Tree below at the seen this of hand, comp at first of expectations XXXX quarter since decline first X Dollar the Dollar outset came other the the discretionary in the Tree's On comp driver we've discretionary things this year. -- to fact, X% perspective, us for Easter in of is of challenging a sales especially historically was demand Easter Easter represent in our annual because discretionary sales. major about put pandemic.

retailers. Also Easter year, is This wet another much of early the our weather way, left retailers, is way the Easter, fourth quarter to with X.X%. closer this extra families largest XXx in holiday. it spring-oriented, a unusually that figure to at important and cold Looked country the outdoor us combined negatively throughout For last for shorter many than selling the Dollar week other with Tree is celebrate year centric traditionally much more in season. impacted

In which across showed purchased caters XXXX. these X fewer XX% down Easter products American demand recent types million dampened of to were consumer Easter year celebrations. consumer fact, our households that seasonal research heavily This that in discretionary assortment, and this gatherings

related and seasonal We non-Easter discretionary toys also other saw outdoor categories in supplies, like garden softness items.

guidance, shift unit a the All expectations. in the growth and X and Dollar market Overall, comp. monthly Despite this essentially XXX that took the our the by we in softness Dollar days It's influenced Easter comp was and quarter our note the Comps was by dollar points our basis XX important market basis points. on to exceeding our in, before quarter to also was weather growth of comp. quarterly Tree's Tree the after XXX in highly unusual cadence point Easter was concentrated basis share prior contemplated our soft in meaningful not. While first consumable first that Easter. were market quarter Tree calendar this, specific the to drag XXX Dollar exceeding with with the quarter believe X line

I quarter, announced called multi-price of choices. more next our the Last strategy phase

part Dollar at multi-price stores items price approximately points are by and XXX this As Tree above of we expanding over year-end. program, assortment our X,XXX $X.XX by

a are the store Importantly, multi-price concentrated integrated single items these being throughout aisle. center store fully rather than aisles in into

price customers to the expand adding expect points about It's that value products are in our at on existing is them. multi-price it what that me raising assortment. this categories Multi-price been reiterate high-quality on the points I that at most our proposition and they've to prices has represent relevant about Multi-price to price items to offers that moment is incremental Before never let program, what a compelling new come core a not. take items. new are

is $X.XX our Multi-price core it. not designed complement replace strategy, to

remain that Tree level of multi-price at entry we as any assortment, our store will XX% expand point. expect the least items in at that price we Dollar Even

to converted the performance stores, in-line of are to multi-price $X.XX which quarter, stores we Now end pleased the are the only To with Dollar Plus new we this rollout. latest the of By Dollar group had stores. of roughly our in date, of the Tree configuration. Tree outcomping back XX%

are roll to to using concept complete conversions. operational disruption minimize year, stores X,XXX the excited by over more the any As taking out specialists steps journey. of latest we to this dedicated teams our our of balance third-party multi-price we about proactively I'm

curve price above little of of multi-price discipline majority take evolve vast time from are stores core our the learning and build at This new we said, a us fully to off with we're a good as But fixed running out for transitioned. it is competencies. That there bit we to a at comps or us will legacy. have a is our expectations bit of Post-conversion a start. that

to pleased the far, so new our offerings. response And I'm customer with

partially last of in to cycled increased several was X quarter were we've a with over and was our trends offset year. over average X.X% as Both Dollar. sequential comp a X.X%, traffic X.X% X in and ticket. growth line basis as expectations. Customer we traffic Family the quarters launched Shifting merchandising the decrease which past strategies by ticket performance a Comps in Top on X.X% in improved to continue line progress. up initiatives multiple quarter

comp and consumable was down comp X.X%. Dollar's X.X% Family up discretionary its was

Family improved shift Dollar towards consumables discretionary gradually by underlying worth it discretionary year, negative, And basis stack has of X is that pace slowed. X-year still While points. comp improved. of is our out has Family definitely the mix trend comp The has since Dollar's X,XXX quarter last pointing of

While deal inflation, higher reduced our to lower government interest benefits. income rates with and consumers continue

behind that the are worst us. headwinds We to be the encouraged SNAP appear of

XXX basis While point lower a to over Family market were drag Dollar market points. basis SNAP consumables quarter gain by a the first meaningful basis also to Dollar's with X growth Family improvement this points point Dollar Similar SNAP market the sequential XXX was share comp, dollar benefits Tree, exceeding exceeding XX basis our quarter headwinds. the and growth our XXX by on unit continues

revenues take a in portfolio quarter. you Lastly, identified stores our comp closed P&L. round closed moment were in in The X that the on opened the Dollar are although remaining We in closures stores any Family the me update or so on stores included XXX Family May. we and quarter they and are the time results, Dollar, were None expenses in initial quarter the optimization. first from of our let of underperforming in included XX closed X

emphasize in segments turn operating to to our strong. Before remain again I want Jeff, things performance over both I that

in broader we to new to Dollar, multi-price share market at will Dollar continue next with believe and decisive we a took portfolio as generation have acquire At operations consumers. our the gain And solidify of positive Tree, on the return. of customers a actions resonates base impact we Family

Dollar's Family wide the As it. streamlined am confident of a growth that that on I in days initiatives place. best organization, based are are more ahead of range

the turn I'll to Jeff. that, call over With

QX by in first our morning. XXXX quarter will non-GAAP focus fiscal I'll our Rick, on comments provided of and which outlook. provide A applicable, results, reconciliation discussing start results. good after will Thank I earnings adjusted I you, adjusted is release. and our on our results Where

by Adjusted decrease increase operating looking at a XX X.X% operating a SG&A by income million, by business offset from sales basis last margin a decreased increased $XXX in $X.X billion. rate. year. to basis. begin basis increase reflecting basis points Let's X% Net on margin, XX adjusted Adjusted consolidated point the by XX point a in gross was

and of Tree's QX of Dollar and amortization SG&A accrual. rollout, a closure lower shrink. from $X.X accrual. partially excluded million Adjusted came and elevated primarily SG&A depreciation improvement margin store and Gross higher costs, year temporary sales costs legal unfavorable and year sales by Adjusted for mix increased severance from freight multi-price million labor QX legal $XX.X a other $XX million deleverage. reversal exclude a last offset this

effective million, adjusted and Our diluted compared EPS XX.X% rate was net Adjusted tax $X.XX. income to was $XXX XX.X%. was adjusted

business point XXX X.X% increased Tree's XX margin Moving increase basis $XXX $X.X margin SG&A driven billion. to basis a sales gross rate. results. to point net XXX segment in X% Operating points, income to in a by our offset decreased Dollar million. increase by basis decreased Operating

increased This amortization to due elevated by sales Gross deleverage. lower expenses temporary margin the SG&A was shrink. improved sales offset conversions, primarily and freight labor and and depreciation primarily from mix multi-price for partially costs. higher unfavorable

flat partially to gross increased freight, net from primarily product by The at the sales Gross margin rate margin was margin Adjusted increases mix. increase Dollar's $X.X unfavorable offset $XX income last as SG&A was by and attributable an and adjusted Family X% XX billion. from cost XX% increased all was XX.X%. basis to adjusted operating million, lower operating year increase sales increased a points.

on our Moving a $XXX a book $XX value million. recorded Marietta and Inventory cash million destroyed X% equipment flow. we of to million loss destruction. related to quarter, related free inventory or to and balance distribution the $XX the and property sheet at by decreased note, in loss a related the On center

we inventory losses offset of nature insurance coverage cost. policies our include operations, by insurance property Given the expect of expansive Based these scale to fully significant recoveries. and on breadth our above catastrophic and be this event,

our to losses there As were insurance fully the quarter recorded offset receivable, first the by was no impact P&L. net

equivalents $X.X of With million and cash debt cash long-term and $XXX billion. of

strong. Our balance sheet remains

Our bank-defined investment-grade underpin continues leverage worthiness. approximately credit at which quarter our end to stood X.Xx, at

million last year growth Regarding million higher $XXX and $XXX in $XXX we cash the compared $XXX $XXX Notwithstanding quarter flow, disciplined last our operating approach of capital Consistent million shares to the store in year. generated new price year. from we generated accelerated flow X.X our of to million last CapEx repurchasing other quarter with cash by $XXX $XXX the shareholders were million after business, investing to initiatives. in expenditures million activities allocation, million per an million reflecting $XXX we growth in investments at spending, average share. returned compared versus free Capital ongoing in to openings and the our

share $X billion authorization. quarter At approximately had remaining existing under repurchase we our end,

second year our on provide perspective expectations. me quarter let Now some and full

approximately to year reflects the additional to outlook our basis. loss operating on expect a estimated and current and DC. The expenses EPS costs the incur QX is of approximately Marietta Our of other full $X.XX transportation we incremental to $X.XX following: impact in $X.XX to be related

may full and on impact outlined shrink, outlook quarters. adjusted the revisit subsequent As consistent this with costs remains outlook disruption becomes freight, our the of with on we this available, expected mix, in SNAP The more quarter. last we associated information EPS expectations year

in recently given will sales for be the our observed carrier that a Adjusting quarter, the X% net Additionally, favorable net we segment to domestic the subject for to the volume level portfolio low background, expect the low the a $X.X to and be range offset based in for volatility our markets second we in limited enterprise, Family the may approximately for X% that the flat rates, $X.X billion for freight partially of sales digits stores Dollar Tree growth exposure of is as believe Dollar comparable that billion the With shipping on as and by optimization. single relatively global cost. were spot is of closed segment. part to

We the year-over-year X% to expect decline X% to Family a Dollar net second quarter on by segment basis. sales for

$X be EPS the in incremental the of of with $X.XX, DC. associated to adjusted expect loss will expense the reflects range Marietta the operating We which

expect be For $XX of the full net to in sales year, the we billion still $XX billion. to range

closed of we point to Adjusted year time, the still think Marietta. single for Although EPS X% to segment. sales Adjusting low Dollar reflecting the expect to Dollar the to now be optimization, be for year-over-year enterprise, operating the we in expected X% digits loss the in the likely expenses Family the expect Tree of $X, sales with again, on decline the as in the Family in part at that we for portfolio low mid-single $X.XX basis. is range year for net for segment stores are this more growth full for of We of by to a half the lower full incremental to associated mid-single Dollar the digits comparable digits net and range.

remaining of also It excludes guidance. which not QX is any year or related on available current workforce or incremental you that portfolio the costs support our fiscal does supplemental IR share any our the the Our presentation, to in severance interest reductions. outlook to I additional for related include review In direct will website our for financial details repurchases. the time, future

back that, the to over turn I'll Rick. With call

Thanks, Jeff.

quarter towards end focused next stores. high We out serve. our rapidly are rolling are delivered At pleased overcame of difficult EPS first on Easter position softness multi-price some but easy, Change that the truly prouder the associates our be steps be the honored Tree, and business ongoing for the their that in of Dollar, XXX,XXX to we prosperity. outlook of never remain commitment communities Tree for couldn't we is X best teams Dollar part and necessary results of generation adjusted they At and their Dollar we retail. am to across taking range. Family long-term I the and lead to Family of Dollar I and our customers

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

is Instructions] from [Operator from question of coming the Kelly Fargo. Edward Our today line first Wells

to So Tree. I wanted start with Dollar

mid-single-digit year. what help QX underpins softer. just maintained comp bit Can around you You've the little for guidance confidence the a obviously us that? the was

going And a future this you're think obviously, price to you with then, on growth. is this of here as on you the Rick, earnings how basis us a What the profile give lot the business? there's multiple multiyear do opportunity? relates Can it bit over perspective little growth real a points, concept, you see accelerating more and

take multi-price I'll sir. the year add can of through is Yes, the point. you confidence second in The Tree as we I and Dollar impact move have first part the part. the

have no are see to them, brand. and -- have the of down out-comping that multi-price. continue stores multi-price the that outcomping into and We the multi-price stores, in stores Ed, I valley the they're love customers trade that the traffic

these also the continue and regards to we with be nothing introduce but to we we're going We as upside in new with pleased basket items. where consumables, see

a So is the of the And they of drivers on point, when repeatedly multi-price X normal it our reference into the more than multi-price Tree the talk the And And me are also is future. heard just very key larger for a basket, about Xx Dollar item, trips very, driving basket. and stores. bullish you've side. by there's I'm the way, transactions

a points before add going on more into longer-term couple multi-price Just the to profitability. maybe

still of stores On over That the the we have those ramping in-line the quarter the course stores are first XX% multi-price, we of up. roughly to the converted mentioned that had happened been that conversion.

We rest ramp-up out for will will. if the will that another of continue roll the tailwind, still stores to you sort additional in year that some of give X,XXX us

comparison by you've our that, things don't of we've our get top have actually On comps the be sort that first some half back the in comps, in year know you and compare. the I of of looking a softer the but stringent noticed, year to half with the if published at probably being before, quarter versus of second most little the our of

how across encouraged to your thinking of of sales the And part drive about greater offering the enterprise to seeing with by be to question, drive believe, allowing second us continue banners. respect was I the The we're we're long-term brand. to what very profitability and The volumes we and profitability. multi-price is both

opportunity of continue these greater OTC organization we gross standpoint Family to freight deliver profit label greater well in drive higher as as greater from Dollar expenses the we brand The across the continued way. the drive to a margins continue HBA. combination We will along in and to private dollars our believe cost. We allow continue to us discipline gross drive drive things in of as the to there's continue that as to improvement

the for we So in. year, the have we very confident feel that outlook

to opportunity through some the There's manage this. of

considerations far. have at numbers the we've other on don't really fact that that to So point, provide the additional any to than we we continue you remain this outlook so given

from Our is UBS. coming question Lasser Michael from next

the X is a process. question My parter on strategic

earnings you Family a and the might you able to a much the the to you divest the is Family be ongoing dissynergies of business. sense Dollar plan were help way Dollar to business what could Dollar if how can like, give B? corporate not the overhead If us allocated as the of to frame are power us what Family is sell look And what

happen the the you going or what It's soon in process exactly thank question. Michael, too the for to what's are. me alternatives all for say to

original comment keep that to to that from all away stay to updated. like you I and my come I'd promised back So

would some corporate is functions don't have chain, are separate. that much know In the I important most Jeff, are look the to add little basically, you and HR, I intertwined, not. want merchandising the of a overhead business, legal, pretty to if There you in but is terms you terms basic how at XX-XX. supply all pieces think that? are the also the and I anything of say retail

I think that it. covers

Your next question today from is coming JPMorgan. Boss from Matthew

a X So X of questions, multiyear. couple near-term,

at about quarter, So Dollar the X% you for some comp confidence X% the what Tree to seen quarter. X% thinking around the on to just banner, near-term, the have to you provide guidance trends second if just can X% relative to comment post quarter-to-date Easter? the first Maybe

the And Is saturation just just unit Dollar and strategy annual then the ceiling acceleration growth elaborate in for that concept? to multiyear, Maybe Rick, to how thinking you're could at consider any on speak terms Tree? long-term there about you acquisition? of

Yes. couple questions the first there. of want great A Do me question? you to take

I'll Yes, one. let second the take the first one, I'll

QX, in for we that comp of to Tree with the we've banner that's reason that we're out guidance the the of provided why it. X% Dollar Matt, line So coming X% gave guidance

a Easter and pretty quarter, mid-single-digit day of reflective much that had the we our low of the As comp had pretty period, course a X the in we I'm was to mentioned of sorry, that we comp out -- to XX through came prepared in that mid-single-digit absence actually comps. a remarks of period,

into we as move So we're with line I QX. think in that still

our future the to to Matt that the regards franchise the $X.XX, reflects the long-term commitment totally we there think at the And acquisition you there look of opportunities business and company, even in Dollar that the grow more. fact there are to Tree

And is in average to to is higher-income is these acquisition Dollar And be as this, think together say frank, into have we retail consumer above are have an the now. think generate to were real our in exceptionally excited powerful about we very estate and that the in really them. a things in occasions, we I attracting a committed are multi-price overall stores said terms term moving many the chain. on we've I'm returns format. very acquire And on a good well-run to we box. of of California going lot The And we that Tree right able I going actually

is John Guggenheim question from Securities. from Next coming Heinbockel

John. This Anders Meyer for is actually on

the I touch cooler just So to on wanted resets.

opportunity overall, how has completion, been sales size with this overall upon impact the been So have they do to What progressing? how And product? you the comps?

doing mean going I it is up on the the to pooling on both cooler sales store overall. Dollar what's franchises And of incredibly the with work incremental the XX. cooler Yes. is basically doors we're in number We're driving pleased approximately into Family banner.

product. to moving consumer more is refrigerated the And frozen and

side, Now to category the X,XXX Tree us food multi-price in have on in it. the Dollar The expanded very you them. one the unlock the Dollar frank, and that and Tree be assortment of have we have now stores and that big multi-price surprises stores about think We've frozen X,XXX frozen to banner. for in is refrigerated

Tree, statement. a feeds Dollar of powerful or a very buy a a family And X. into $X is pizza that go can that for You you $X

It's very chasing where So the pleased banners are both continuing going it. and push consumer it. to is

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

bit to as in going put want you if well. I if Dollar, Family think wanted but be little in I the EBIT it's better. the Dollar Tree can't second a about about I to answer, I'll that a to P&L, respectful ask get we ask see question

little You're what going look run like. leftover the stores rate bit to a from better

profit look or a Can the stores, of And they're wide you Dollar among concentrated. then tell remaining about are distribution have big you can range outcomes the it, if X,XXX if able relatively what the Family life could you And a to talked us call in share there's break lease portfolio? costs or average you of that share are the then leases what like?

few Let's see I that. of can if pieces take a

the then And take I'll couple.

closed the tell aren't what would have level at that can this, we of higher we nonperforming the remaining position you profitability course, have you as had of at you than a portfolio I look of those a share, of still stores, Some stores distribution but you much of across sort in to a a stores. before

should $X.XX We for profitability had on the annualized stores from of those -- about an closed $X.XX coming you also additional and indicated year, profitability increased that EPS basis. already expect of

to into Our leases the somewhere at an approximately I really XX% can renewed X are between And average. XX% you time, point share on being with that are basis. leases on XX to normally annual with those any years one that's respect about of to what we this obligations. lease enter point At in

Family we're progress on initiatives to and many the the that brands is say And with thing X long-term different announcement have done it's growth. the X designed of their we making. What reflect fact and job are this has where X I the we is team would have at out Dollar different figure in trying The faith you to they're wrestling great lost in as a of stages that drive development. implementing at not

while And want we And more we them Family transformation by where it grow. for Dollar's provide accelerate to both to has that acceleration Tree, Dollar might want long-term. position at chance the brands to looking differently

is from Rupesh from Oppenheimer. Next Parikh coming question today

locations new We've to of commentary just back some in been product. multi-price with expansion. So the on going your point your newer

-- you seeing those you're expansion? surprises feedback consumer behavior any guys what store, consumer with with that are that type Just of in in seeing

discretionary then those sense within And consumables playing out expectations get a versus to how the want just is mix versus locations.

A of Yes. great questions. couple

likes shelf. to believe believe, it's -- it. it in responding think, I with on it. it I don't right is multi-price ongoing I piece consumer problem biggest we The truly is the our be And consumer be powerful can't going now a very The Our to going to future. keep is think

a the more multi-price through Christmas you am to multi-price on up more with advance seasonal show to I positive move the our will we into year know, have Christmas we we you're discretionary we'll for products, than in year, have holidays, tree first the have all side. Christmas decorations pretty product going time, inexpensive as that as as see the see, the guys we get will will in sell. You buy calendar that probably stores lights go an

price the are committed like are we share. what's on with the SKUs, regards broadens introducing again, we raising what consumer. the different In consumables, of or driving are multi-price which to assortment the our we are going in And appeal points, bringing to items that consumable not

this multi-price, we more in I with looking just that consumables with discretionary with heavier balance consumables. on had seen X would discretionary at other those conversion, the stores historically have line mix and point. had have a what we're in-line is as than of

like but it's we consumables, also in the So that driving balance discretionary multi-price lifting also. not is basket the only that

coming Paul Your Citigroup. next today is question from Lejuez from

stores. is in you first on of Just What in second, follow-up. and terms traffic the you're change landscape. the seen versus what multi-price in converted last What my a promotional the versus curious of that you've on follow-up year-to-date ticket you've comment. you I'm year rest the do seeing That's . And you what see what the there. seen out for the promotional assume see in what landscape expectations, also based curious your XQ that but -- on

XX% muscle. have about stores approximately So the would the in my maybe part opportunities. guessing we're bps. top a new to Again, the look question goes old I I'm come at you the of it stores it's outperforming off back of to, and of XX% tune first in we probably our are of up see the and retailer traffic to also right want increase with building I the And me. X%, are soon. ticket again, on expectation, XX and -- the say, see head, the XX% about we multi-price is,

on it's And there is promotion. buying the is right what that And items little actually seeing is the more look, buying promotion. on we're activity, definitely now more not promotional but a customer bit customer

what's is And that asking the nothing this the me we irrational promotional on landscape, what's seen thing going in Monday office at And every is promotion have my on time. I really in Jeff I that's important think think important.

with what promotional everybody And pop to, marking I and X-liter activity. seeing we think But maybe very I confuse easy that always talk inventory remind And traffic soda that's not incremental really down we are movements pop. And to driver. is stale really, on a important. is CSD, I have

I stable and maybe say CSD. So not environment, would it's irrational

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

can discipline new So you need about to have the and to new that Rick, what's are reset. you employees initial the on managers the talked going reset? transition In other the third-party the about actually doing words, done risk post the multi-price specialists acquire once store rollout, specialists and talk the those

from $XX you deleverage of the outlined much SG&A of how that? think of Jeff, talk resets? first expenses for then in I million was have just you the And And the Can quarter guys this the year. about phasing

great a again, Chuck, Yes. of questions. couple

I'll take. one, First

doesn't don't up and it it. the matter everything matter what in customer so if point, they grown the an does price the have We want is where this goes, where product it it they in same company decide doesn't with environment

we're to -- of in. Now center is We're what and introducing into putting doing category store. do we in just that not we're they multi-price the belong the the them the SKUs what is have

you when about has how how their in the do have right to spot prices, that that to so the and a associates create store. knows then the back teaching to to condition consumer section, get to with changes what on much are. it into the shelf. quite mind, the product stocking And all bears So And consumer frankly, regards product that's our handle when it that they they

they're to a in there regards when used item and to the same warehouse have the they on because on to Now stays it's was put that manage or right to the the something We're that the to kinds has outside But item not very we doing item, store's to now label it all in price that selected. is X not, the pulling things shelf. we've shelf people discipline allows pull pulling they case they're put put the also tag get shelf, has pull the of had comparable supposed item, years. associate of the over teach multi-price product as a But to the that. inventory, the it's be but point true. the it literally a on to the if it shelf it the We difference believe had the

with really margin X to SG&A, respect Chuck, components. is the then, And deleverage, if you will. This

called temporary component. the largest the labor You absolutely out was

with component was to lower with of was higher result first thing a recognize The X as The comp. third component the the sort labor of the that a up. working go stores There's it were learning the to the curve as -- to number the actually opened allocated, about teams. temp that how just second leadership and we store depreciation of in the deleverage crews how

that subsequent We we're make the continue to on stores in rolling out. that progress

earlier, the thought would of in we definitely of impact to using But EPS the approximately the time. sort had we third-party that of for was to year. that labor initial the $X.XX conversions here, we do headwind over as to we that quarter the So first moderate going us expect mentioned this in-line had cost

next question today from Barclays. from is Seth Sigman coming Our

about talk a think a expected. shrink. come quarter, It up was to this It that but want ton. I I headwind was hasn't

some signs didn't Just that? curious efforts, that of how mitigation guidance that any played out the stabilization of with you change the for given

could And then quarter. gross or a limited that us more I mix with was just curious, If improvement was help that? I'm a you the on margin something just guess bit question overall little this else?

that's if question, okay. shrink the take I'll Yes,

with not it taking away still the shrink we the in not year. still we direction. I that in that time, they to us. fair the put to honestly good they're think were was that on and were But people anymore. we've us also steps reinforce, were the definitely shrink first like curve have, we place. We're but I not calling are it I it's can problem, now place right efforts initiatives trends we the tracking out the We getting we've is say shrink in it's are deteriorating from last feel taking for say ahead around very put a I why want that think good

exposure self-checkout Our is basically nothing.

that. revisit So we don't have to

high-shrink And counters where the them. that behind also things placed check have control we've a started We year SKUs. stand can about eliminating We started we ago.

So it I'm but out that you pleased woods, of at not the least can we stabilized. tell I are has

put Yes, a maybe it. finer bit little just on to of point

the we're be We're with still Our shrink and headwind in mix. the expectation about going that. seeing $X.XX line that first some the our to half to that against but were year and What on is predominantly seeing have early of mix actually was across year. is we that going it, slight for improvement performance was $X.XX in to of we're

as we that investments did So a said, on we -- and lot has Family side. that were making Rick Dollar of the the

the of Dollar and concept across growing also. opportunities now is a First Tree some banner proof self-help of those

the really Tree put Easter discretionary is for in consumable As having margin quarter on that a really was not by as the margin, performance it relates result gross from gross Dollar more to gross the pressure really what overall margin. our of pressure mix complement

points. Family healthy basis side, overall margins very of gross XX the Dollar On improvement in

we're to as So notwithstanding Easter, with where relates we're very our the impact gross happy of margins. trending it

from Our next question today from Katai Bank. is coming Krisztina Deutsche

wanted about I you supply ask So to the chain.

lot a of You've there. been making investments

the benefits deliveries You regarding of talk what part so inventory have seeing now of making rotacarts that you're are in-stock you turns availability, think that from are take helping to Can reallocate about store And some as supply is store early the far then chain savings it your shrink fleet. transportation the the able how hours? and to just overall you're and best reduce damages? that investments labor hour about

There's Yes. a lot there.

elements. if I Let of can couple it a distill just see down me to

was North it's of that It pallets. DC were was The DC Matthews, they which X Carolina. we previously first rolled off -- to Dollar in delivering the out Family a store

rotacarts. doing we're it now off of So

What were is improved anticipating. we we're time actually seeing low delivery which time, is on what

damages, level they helping We to are sort this their handled. satisfaction, seeing way a it that is the is and also that the recognizing And also associate do jobs. seeing of way that level mentioned, product is of improve engagement had higher you a being we're reduced as of

that now product here get just kicked we DC we're service a the outs But that quicker once on are Chesapeake. well as allowing in shelf DC the we the reduction fulfill of basically have unload improving in-stocks to to Dollar next in-store It's some nice levels shelf. and Tree DC The again, us times. It's to a these the to as off stores. is the really in seeing overall,

next Our is from Michael Montani coming Evercore question from ISI.

of in EBIT implied to half. XXX thing. was improvement for plus the wanted I ask flattish margin in the bps versus back X-part half potentially front there's of just an One kind

conviction So just wanted gives the drivers that. couple top to see of that that, for of the you

And for incremental then the did acquisition Cent stores, as you all XX follow-up, as you a mentioned. the

plus of to $XX So think power out. is as EPS Dollar from it core kind just of feasible Tree now see you

question. the of you So the handle first I'll part let

second too stay soon appropriate. I'd if to ahead. of like for away that The the Go part question, now, that's to know that. it's from

our in-line as of phasing of of And your a line couple the as multi-pricing Michael, roll really appreciate get the perspective, areas. question. the of can kind From the overall we we top conversions. sort think to continue that acceleration bucketed year, EPS we It about out talked about a I for into of

front for also $X.XX us we shrink on will And in again, believe than was that $X.XX have of headwind the neutralized is in in You half to -- the mix be half. of more we really the the back EPS year first once half.

much. we this may In expectations. be will SNAP is half, as the also some while the a available -- from still within may adjustment cola available a We question that back think perspective, that our is result tailwinds believe SNAP of be that October we how have

the of the couple you component of we're adjustment that accrual remember to OTC year, general We that you year, the we about specifically will. claims if had was going an last $X.XX. very around we to was is, in back foot an had of the pre-pandemic, a $X.XX around that on needed liability, had We if some make of then last faults, half back recall EPS. And that

as That And a to we $X.XX then the improvement. in least, but EPS be back half with the not optimization, predominantly year. last the had portfolio mentioned, are we is expecting of going

which elements SNAP nature. onetime and softer of growth, the and respect acceleration we in some compares were these components revenue to believe then last foot top with line then So against a shrink on of faults, are balance, result of and of some as those the

final Our Ohri-Gupta coming today Barclays. Priya question is from from

thinking maintain process, grade. it your rating about a how Would with rating try various a regard for credit was little would you to considerations Or at Dollar? to Family perhaps your bit the existing alternatives? to I us about least I as could sort be to know early the it's talk you're investment bit possible in be maintain expectation of that these but consider hoping you just

Yes.

how believe investment-grade an early strategic of policy, too our to a rating will. it's be that sort as the that an keeping of the review. out growth business, by to financial investment-grade our ahead outcome structure you the -- We if of may But important business, element we overall in get this what line is ultimate is So generated level. or of ourselves the capital the we us underlying believe the given power honestly, in of and quite allocation with execute cash flows basically our all

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

the and to your to us forward down to catching Thank talk for you today taking all up time look road.

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

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