Slide 1: Supplemental Financial Presentation 4th Quarter 2022
Supplemental Financial Presentation 4th Quarter 2022
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This Supplemental Financial Presentation contains “forward-looking statements,” as that term is used in the Private Securities Litigation Reform Act of 1995, concerning our sales, comparable store sales, selling square footage, depreciation, net interest expense, effective
Slide 3: Comparable Store Sales Composition
COMPARABLE STORE SALES COMPOSITION Traffic & Average Ticket Consumables & Discretionary FISCAL 2021 FISCAL 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 TOTAL 4.7% (0.2%) 0.6% 3.1% 11.2% 7.5% 8.5% 8.7% Traffic (4.4%) 1.1% (1.1%) (2.8%) (3.6%) (5.8%) (5.2%) (1.1%) Average Ticket 9.4% (1.3%) 1.8% 6.0% 15.4% 14.2% 14.6
Slide 4: Category Mix
CATEGORY MIX Category % of Net Sales 24.6% 23.4% 57.5% 57.5% 75.4% +120 bps 76.6% 42.5% Flat 42.5% 4Q21 4Q22 4Q21 4Q22 Consumables Discretionary Consumables Discretionary Discretionary Categories Discretionary Categories Seasonal & Variety Home, Apparel, Accessories, Seasonal, Electronics 4
Slide 5: Operating Income Margin
OPERATING INCOME MARGIN Basis Point Change Year-over-Year Q1 Q2 Q3 Q4 Q4 Trend Driver Prior Year 12.1% 10.1% 8.5% 15.0% COGS Merchandise Cost 1 590 455 485 150 Higher Initial Mark-on and Lower Freight COGS Occupancy 80 50 60 50 Sales Leverage COGS Distribution 50 20 20 (40) Maintenance, Compliance a
Slide 6: Operating Income Margin
OPERATING INCOME MARGIN Basis Point Change Year-over-Year Q1 Q2 Q3 Q4 Q4 Trend Driver Prior Year 6.7% 5.1% 3.0% 2.7% Higher Initial Mark-on, Vendor Support and Lower Freight COGS Merchandise Cost 1 35 (15) 45 100 Category & Product Mix COGS Occupancy (45) - 25 30 Sales Leverage COGS Distribution 15
Slide 7: Fiscal 2023 Outlook
FISCAL 2023 OUTLOOK First Quarter Fiscal Year Sales - Enterprise $7.2B - $7.4B $29.9B - $30.5B Comp Sales – Enterprise MSD LSD - MSD Comp Sales – Dollar Tree LSD LSD Comp Sales – Family Dollar MSD MSD Selling Square Footage Growth 3.0% to 3.5% Depreciation $845M - $850M Net Interest Expense ~$27M ~$
Slide 8: Fiscal 2023 Outlook: Underlying Factors
FISCAL 2023 OUTLOOK Underlying Factors Impacting Outlook ✓ Fiscal Year 2023 ending February 3, 2024 includes a 53rd week • 53rd week will benefit the 4th Quarter by approximately $500 million in Sales and $0.29 to diluted EPS ✓ Dollar Tree segment is cycling 600 basis point outsized gross margin ben
Slide 9: Fiscal 2023 EPS Outlook
FISCAL 2023 EPS OUTLOOK TALE OF TWO HALVES $7.21 $6.30 – $6.80 53rd Week 45% & 60% Freight Relief $1.25 Benefit 55% 40% FY 2022 FY 2023 Actual Outlook 1st Half 2nd Half 9
Slide 10: Import Freight Comparison: 2019 vs. 2023
IMPORT FREIGHT COMPARISON: 2019 vs. 2023 Longer Terms, Rate Category Feb - Apr Rates May - Jan Rates Long-Term & Charter Higher Rates 47% Expire FY24 & FY25 72% Spot Contract 40% 28% 13% 2019 2023 Less Dependent on Transpacific Shipping | Port of Entry 25% 25% Lowest Container Freight Rates 45% 35%
Slide 11: Fiscal 2023 New Store Growth
FISCAL 2023 NEW STORE GROWTH BACK-END WEIGHTED 455 600 - 650 48% 57% 52% 43% FY 2022 FY 2023 Actual Outlook 1st Half 2nd Half 11
Slide 12: Store Count by Format
STORE COUNT BY FORMAT 8,061 8,134 660 2,469 7,401 5,665 4Q21 4Q22 Traditional DT Plus Traditional: Dollar Tree stores primarily at fixed price-point of $1.25 per item DT Plus: Dollar Tree stores that include $3 and $5 Plus merchandise in assortment 12
Slide 13: Store Count by Format
STORE COUNT BY FORMAT 8,016 8,206 240 810 3,815 4,360 3,961 3,036 4Q21 4Q22 Traditional H2/Renovated Combo Traditional: Original Family Dollar store format H2/Renovated: Store with improved merchandise offerings and a minimum of freezer & cooler door Combo: Family Dollar store that includes select D
Slide 14: Dollar Tree $1.25
DOLLAR TREE $1.25 Anniversary Prior Year Store Rollout 7,896 5,849 3,059 2,790 2,478 2,047 122 122 190 312 Oct '22 Nov '22 Dec '22 Jan '23 Feb '23 Additions Cumulative 14