CHESAPEAKE, VA - Dollar Tree, Inc. reported financial results for its fourth quarter ended February 1, 2025.

“In the fourth quarter, our team was focused on successfully closing out the year, bringing the strategic review to a favorable conclusion, and setting Dollar Tree on a path to realize its full potential to create long-term value for our associates, customers, and shareholders,” said Mike Creedon, Chief Executive Officer, in the release. “We finished 2024 on a high note with strong execution at Dollar Tree as growing customer acceptance of our expanded assortment drove sales momentum. With the sale of Family Dollar set to close later this year, we will be able to fully dedicate ourselves to Dollar Tree’s long-term growth, profitability, and returns on capital.”

Sale of Family Dollar

After a thorough review of strategic alternatives, on March 25, 2025, the Company entered into a definitive agreement to sell the Family Dollar business to Brigade and Macellum for a purchase consideration of $1,007.0 million, subject to a number of adjustments, including with respect to working capital and net indebtedness. The closing of the transaction is subject to satisfaction of customary closing conditions, including receipt of US antitrust approval. Net proceeds are estimated to total approximately $804 million. Additionally, we expect the economic impact of tax benefits from losses on the sale to be approximately $350 million. The deal is expected to close in approximately 90 days with the Family Dollar business remaining headquartered in Chesapeake, Virginia.

In the fourth quarter of 2024, the Company determined that the assets of the Family Dollar business met the criteria for classification as held for sale. As such, the results of Family Dollar are presented in Dollar Tree Inc.’s financial results as discontinued operations in the Consolidated Financial Statements for all periods presented and prior periods have been adjusted to conform to the current presentation.

Unless otherwise noted, all amounts and disclosures included in this press release reflect only continuing operations. For additional information, please refer to Note 15 in our Annual Report on Form 10-K to be filed today, March 26, 2025.

Additional Business Highlights

• Opened 33 new Dollar Tree stores, bringing full-year openings to 525
• Finished fiscal 2024 with approximately 2,900 Dollar Tree 3.0 multi-price format stores, including 2,600 conversions and 300 new stores.
• For the full year, generated $2.2 billion of net cash provided by operating activities of continuing operations and $893 million of free cash flow from continuing operations

Fourth Quarter Results

Results for the fourth quarter, ended February 1, 2025, are reported on a continuing operations basis and reflect the Family Dollar segment as discontinued operations. Continuing operations reflect the results of the Dollar Tree segment and corporate, support, and other.

Also, unless otherwise noted, all comparisons are to the prior year’s fourth quarter, ended February 3, 2024, which also have been adjusted to reflect the Family Dollar segment as discontinued operations. Finally, the prior year’s fourth quarter ended February 3, 2024, included an extra week which affects year-over-year comparisons.

Net sales increased 0.7% to $5.0 billion. Same-store net sales increased 2.0%, driven by a 0.7% increase in traffic and a 1.3% increase in average ticket.

Gross profit declined 2.8% to $1.9 billion and gross margin contracted 130 basis points to 37.6%. The decline in gross margin expansion was driven primarily by the loss of leverage from the extra week of sales in 2023, lower initial mark-on, and higher shrink, distribution, and markdown cost, partially offset by lower freight. Freight costs in the quarter include $25.0 million in accrual for duties related to an anti-dumping case for product imported in fiscal 2024.

Selling, general and administrative expenses increased 260 basis points to 27.0% of total revenue. The increase was driven primarily by software impairments and related contract termination costs in connection with the decision to sell the Family Dollar business, and higher expenses across depreciation, stock compensation, professional fees, utilities costs, and the loss of leverage from the extra week of sales in 2023. The increases were partially offset by lower general liability claim adjustments.

Read the full report here.