Dollar Tree DLTR Form 10-Q filing Q1 FY2026

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited):

Condensed Consolidated Income Statements 4

Condensed Consolidated Statements of Comprehensive Income 5

Condensed Consolidated Balance Sheets 6

Condensed Consolidated Statements of Shareholders’ Equity 7

Condensed Consolidated Statements of Cash Flows 8

Notes to Unaudited Condensed Consolidated Financial Statements 9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 17

Item 3. Quantitative and Qualitative Disclosures About Market Risk 26

Item 4. Controls and Procedures 26

PART II—OTHER INFORMATION

Item 1. Legal Proceedings 28

Item 1A. Risk Factors 28

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 28

Item 3. Defaults Upon Senior Securities 28

Item 4. Mine Safety Disclosures 28

Item 5. Other Information 28

Item 6. Exhibits 28

Signatures 30

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

DOLLAR TREE, INC.

CONDENSED CONSOLIDATED INCOME STATEMENTS

(Unaudited)

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

DOLLAR TREE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

DOLLAR TREE, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Description of Business and Basis of Presentation

Dollar Tree, Inc. (“we,” “our,” “us,” or “the Company”) is a leading operator of discount retail stores in the United States and Canada.

The accompanying unaudited condensed consolidated financial statements include the financial statements of Dollar Tree, Inc., and its wholly-owned subsidiaries and were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026 filed with the U.S. Securities and Exchange Commission (“SEC”) on March 16, 2026. The results of operations for the 13 weeks ended May 2, 2026 are not necessarily indicative of the results to be expected for the entire fiscal year ending January 30, 2027.

In our opinion, the unaudited condensed consolidated financial statements included herein contain all adjustments (including those of a normal recurring nature) considered necessary for a fair presentation of our financial position as of May 2, 2026 and May 3, 2025 and the results of our operations and cash flows for the periods presented. The January 31, 2026 balance sheet information was derived from the audited consolidated financial statements as of that date.

All intercompany balances and transactions have been eliminated in consolidation. All amounts stated herein are in U.S. Dollars. Continuing operations consists of the operations of our Dollar Tree and Dollar Tree Canada brands, as well as our Summit Pointe property in Chesapeake, Virginia.

On July 5, 2025, we completed our sale of the Family Dollar business to 1959 Holdings, LLC. Total cash generated from the sale approximated $793 million, consisting of approximately $680 million of net proceeds, including from settlement of net working capital and net indebtedness, and approximately $113 million monetized primarily through a reduction of net working capital prior to the date of sale. The Company has continuing involvement with Family Dollar under a transition services agreement, through which the Company and Family Dollar continue to provide certain services to each other for a period of 18 months following the date of sale. The results of Family Dollar are presented as discontinued operations in the accompanying unaudited Condensed Consolidated Income Statements for the prior year comparable period. The assets and liabilities of Family Dollar are reflected as assets and liabilities of discontinued operations in the accompanying unaudited Condensed Consolidated Balance Sheets for the prior year comparable period.

Unless otherwise noted, all amounts and disclosures included in these Notes to Unaudited Condensed Consolidated Financial Statements reflect only our continuing operations. Refer to Note 10 for additional details on discontinued operations.

Note 2 - Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03 “Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”) which requires disaggregated disclosure of certain costs and expenses, including purchases of inventory, employee compensation, depreciation, amortization and depletion, within relevant income statement captions. ASU 2024-03 is effective on a prospective basis for annual periods beginning in fiscal 2027 and for interim periods beginning in fiscal 2028, with retrospective application permitted. We are currently evaluating the impact of this standard to our consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, “Intangibles–Goodwill and Other–Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”), which amends the accounting for internal-use software by requiring that an entity start capitalizing software costs once management has authorized and committed funding for the project and it is probable that the project will be completed and the software will be used as intended. ASU 2025-06 is effective for annual and interim periods beginning in fiscal 2028, with early adoption permitted. ASU 2025-06 can be applied using a prospective transition approach, a modified transition approach or a retrospective transition approach. We are currently evaluating the impact of this standard to our consolidated financial statements.

We have reviewed all other recently issued accounting standards and determined they were either not applicable or not expected to have a material impact on our financial position or results of operations.

Note 3 - Contingencies

As previously reported, in the first quarter of fiscal 2024, a tornado destroyed our Dollar Tree distribution center in Marietta, Oklahoma. In connection with this, in the first quarter of fiscal 2026, we received additional insurance proceeds of $5.2 million related to damaged inventory which was recorded as a gain. In the first quarter of fiscal 2025, as previously reported, we received insurance proceeds of $70.0 million, including $50.0 million related to damaged property and equipment and $20.0 million related to damaged inventory. We recorded a gain of approximately $62.0 million for the excess of the insurance proceeds received over the losses incurred for the damaged property and equipment and damaged inventory.

The gains recorded in fiscal 2026 and fiscal 2025 are reflected within “Other income, net” in the accompanying unaudited Condensed Consolidated Income Statements.

Legal Proceedings

We are defendants in ordinary, routine litigation or proceedings incidental to our business, including employment-related matters; infringement of intellectual property rights; personal injury/wrongful death claims; real estate matters; environmental and safety issues; and product safety and product liability matters (including cases arising from talc and acetaminophen products sold by the Company). Legal proceedings may also include class, collective, representative and large cases and arbitrations. We will vigorously defend ourselves in these matters. We do not believe that any of these matters will, individually or in the aggregate, have a material effect on our business, financial condition, or liquidity. We cannot give assurance, however, that one or more of these matters will not have a material effect on our results of operations for the quarter or year in which any reserves are established (if ever) or they are resolved.

We assess our legal proceedings monthly and reserves are established if a loss is probable and the amount of such loss can be reasonably estimated. Many, if not substantially all, of our legal proceedings are subject to significant uncertainties and, therefore, determining the likelihood of a loss and the measurement of any loss can be complex and subject to judgment. With respect to the matters noted below where we have determined that a loss is reasonably possible but not probable, we are unable to reasonably estimate the amount or range of the possible loss at this time due to the inherent difficulty of predicting the outcome of and uncertainties regarding legal proceedings. Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions. Management’s assessment of legal proceedings could change because of future determinations or the discovery of facts which are not presently known. Accordingly, the ultimate costs of resolving these proceedings may be substantially higher or lower than currently estimated.

In connection with the sale of Family Dollar, Dollar Tree agreed to defend and indemnify Family Dollar against certain specified litigated matters, including certain product liability cases arising from customers' alleged use, before the sale, of talc and acetaminophen products purchased at Family Dollar.

Antidumping and Countervailing Duties

In 2025, the U.S. Department of Commerce (“DOC”) issued separate orders for antidumping (“AD”) and countervailing duties (“CVD”) on imports of paper plates and aluminum pans coming from China. In August 2025, the DOC initiated a circumvention case regarding whether paper plates sourced from Cambodia and Malaysia were circumventing the AD and CVD orders by using parent rolls of paper from China. Similarly, in July 2025, the DOC initiated a circumvention case regarding whether aluminum pans produced in Thailand and Vietnam were circumventing the AD and CVD orders by using parent rolls of aluminum from China. In addition to DOC’s assessment of duties on product imported after case initiation, petitioners in both cases have requested the DOC to apply duties retroactively to imports that occurred prior to the initiation of the circumvention cases. The Company imported both products from impacted countries during the requested retroactive period and after initiation of the cases.

In April 2026, the DOC issued a preliminary determination in the aluminum pan case, affirming retroactive application, with a final determination scheduled for July 2026. Subsequent to May 2, 2026, the Company filed a brief and requested a hearing with the DOC prior to the final determination. The preliminary and final determinations in the paper plate case are expected later in 2026.

Although the DOC has significant discretion in deciding these cases, based on past precedent of DOC rulings, the Company does not believe it is probable that we will incur losses with respect to retroactive duties. Total exposure in these cases is currently estimated to be as high as approximately $56 million for aluminum pans and $53 million for paper plates, as of May 26, 2026.

Tariff Refunds

On February 20, 2026, the U.S. Supreme Court ruled that certain of the tariffs imposed in fiscal 2025 under the International Emergency Economic Powers Act (“IEEPA”) were unlawful. The ruling did not address potential refunds; however, on March 4, 2026, the U.S. Court of International Trade ordered U.S. Customs and Border Protection (“CBP”) to begin refunding all tariffs imposed under IEEPA. On April 20, 2026, the CBP launched a process for submitting IEEPA refund claims. The Company submitted refund claims in April 2026 and will record these refunds as and when the amounts are collected. Subsequent to May 2, 2026, the Company began receiving refunds for IEEPA tariffs previously paid, totaling approximately $110 million through May 26, 2026, including $6 million of interest.

Note 4 - Short-Term Borrowings and Long-Term Debt

Long-Term Debt

On March 19, 2026, the Company entered into a credit agreement (the “Term Loan Credit Agreement”), with Bank of America, N.A., as agent, and the banks, financial institutions and other institutional lenders from time to time party thereto, providing for a $500.0 million term loan (the “Term Loan”). The Term Loan matures on March 19, 2029.

The Term Loan bears interest at an initial interest rate equal to the Term Secured Overnight Financing Rate (“SOFR”), as defined in the Term Loan Credit Agreement, plus 1.00%, subject to adjustment based on (i) our credit ratings and (ii) our leverage ratio. The Term Loan Credit Agreement allows voluntary repayment of the Term Loan at any time without premium or penalty, other than customary breakage costs with respect to SOFR loans. There is no required amortization under the Term Loan.

The Term Loan contains a number of customary affirmative and negative covenants that, among other things, restrict, subject to certain exceptions, the Company’s ability to incur subsidiary indebtedness, incur liens, sell all or substantially all of our (including our subsidiaries’) assets and consummate certain fundamental changes. The Term Loan also contains financial covenants, including a maximum leverage ratio covenant and a minimum fixed charge coverage ratio covenant. The Term Loan Credit Agreement provides for certain events of default which, if any of them occur, would permit or require the Term Loan to be declared due and payable and the commitments thereunder to be terminated. As of May 2, 2026, we were in compliance with all applicable covenants.

Termination of the Existing Credit Agreement

Upon entering into the Term Loan Credit Agreement discussed above, and the expiry of the Company’s existing $1.0 billion 364-Day revolving credit agreement, dated as of March 21, 2025, as amended, restated, supplemented or otherwise modified from time to time (the “364-Day Revolving Credit Facility”) on March 20, 2026, all commitments under the 364-Day Revolving Credit Facility have been terminated and all obligations have been fulfilled.

Short-Term Borrowings

In connection with the maturity of the 364-Day Revolving Credit Facility on March 20, 2026, the Company decreased the size of its commercial paper program, with the issuance of commercial paper notes limited to a maximum aggregate amount outstanding at any time of $1.5 billion, compared to the previous maximum permitted of $2.5 billion. The Company’s $1.5 billion revolving credit facility (the “Five-Year Credit Facility”) serves as a liquidity backstop for the repayment of notes outstanding under the commercial paper program.

There were no short-term borrowings outstanding at May 2, 2026, January 31, 2026 and May 3, 2025.

Note 5 - Fair Value Measurements

Financial assets and liabilities are classified in the fair value hierarchy in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (e.g., when there is evidence of impairment). We did not record any material impairment charges during the 13 weeks ended May 2, 2026 or May 3, 2025.

Fair Value of Financial Instruments

The carrying amounts of “Cash and cash equivalents,” “Restricted cash” and “Accounts payable” as reported in the accompanying unaudited Condensed Consolidated Balance Sheets approximate fair value due to their short-term maturities. The carrying values of our Five-Year Credit Facility and borrowings under our commercial paper program approximate their fair values. At May 2, 2026, we had no borrowings outstanding under our Five-Year Credit Facility or our commercial paper program.

The aggregate fair values and carrying values of our long-term borrowings, including current portion, were as follows:

The fair values of our Senior Notes were determined using Level 1 inputs as quoted prices in active markets for identical assets or liabilities are available. The fair value of our Term Loan was determined using market-based inputs for comparable corporate loans within the same industry, credit quality and currency, resulting in a Level 2 classification.

Note 6 - Earnings Per Share

The following table sets forth the calculations of basic and diluted earnings per share:

Share-based awards of 2.3 million shares and 2.6 million shares were excluded from the calculation of diluted net income per share for the 13 weeks ended May 2, 2026 and May 3, 2025, respectively, because their inclusion would be anti-dilutive.

Note 7 - Shareholders’ Equity

We repurchased 5,552,410 shares of common stock on the open market at a cost of $600.4 million, including applicable excise tax, during the 13 weeks ended May 2, 2026. We repurchased 5,926,985 shares of common stock on the open market at a cost of $436.8 million, including applicable excise tax, during the 13 weeks ended May 3, 2025. Of the shares repurchased during the 13 weeks ended May 2, 2026 and May 3, 2025, $18.0 million and $5.0 million, respectively, settled subsequent to May 2, 2026 and May 3, 2025, respectively, and these amounts were accrued in the accompanying unaudited Condensed Consolidated Balance Sheets. At May 2, 2026, we had $1.3 billion remaining under our existing $2.5 billion Board repurchase authorization.

Subsequent to May 2, 2026, we purchased an additional 1,031,569 shares of common stock on the open market at a cost of $98.0 million, as of May 26, 2026.

Note 8 - Segments and Disaggregated Revenue

Dollar Tree is a leading operator of discount variety stores offering merchandise predominantly at the opening price point of $1.25, with additional offerings at higher price points. The Company operates approximately 9,100 stores across 48 states and the District of Columbia and approximately 285 stores across seven Canadian provinces. We also operate 16 distribution centers in the United States and two distribution centers in Canada, as of May 2, 2026. Our revenue and assets in Canada are not material.

The Company has revised its composition of reportable segments in the first quarter of fiscal 2026 to disclose only one reportable segment. In fiscal 2025, the Company previously reported the Dollar Tree segment, which included the operations of all our stores and distribution centers under the Dollar Tree and Dollar Tree Canada brands, and corporate, support and other, which consisted of store support center costs and the results of operations for our Summit Pointe property in Chesapeake, Virginia. Corporate, support and other also included costs that were previously incurred in support of the Family Dollar segment but that were not directly attributable to it and thus were not recorded in discontinued operations. As a result of this change, we have recast prior year amounts to conform to the presentation of one reportable segment.

Our chief operating decision maker (“CODM”) is our chief executive officer of the enterprise. The CODM evaluates the financial performance of the Company using consolidated net income, operating income and gross profit. The CODM considers variances between actual results and internal budgets/forecasts when making decisions about allocating capital and resources. The CODM uses gross profit to evaluate our ability to control product and supply chain costs relative to changes in sales between comparable periods. The CODM uses operating income to evaluate the overall operating performance of the business. The measure of segment assets is reported on the Company’s Condensed Consolidated Balance Sheets as total consolidated assets.

Profit and loss information for our one reportable segment, is as follows:

Corporate selling, general and administrative expenses were $141.8 million and $141.8 million, for the 13 weeks ended May 2, 2026 and May 3, 2025, respectively.

Disaggregated Revenue

The following table summarizes net sales by merchandise category for our reportable segment:

Note 9 - Supply Chain Finance Program

We facilitate a voluntary supply chain finance program, administered through a financial institution, which provides participating suppliers with the opportunity to finance payments due from us. Participating suppliers may, at their sole discretion, elect to finance one or more invoices of ours prior to their scheduled due dates at a discounted price with the financial institution.

Our obligations to our suppliers, including amounts due and scheduled payment dates, are not impacted by the supplier’s decision to finance amounts under these arrangements. As such, the outstanding payment obligations under our supply chain financing program are included within “Accounts payable” in the accompanying unaudited Condensed Consolidated Balance Sheets and within “Cash flows from operating activities” in the accompanying unaudited Condensed Consolidated Statements of Cash Flows.

Our outstanding payment obligations under this program were $298.4 million, $305.1 million and $352.0 million as of May 2, 2026, January 31, 2026, and May 3, 2025, respectively.

Note 10 – Discontinued Operations

On July 5, 2025, we completed our sale of the Family Dollar business to 1959 Holdings, LLC. Total cash generated from the sale approximated $793 million, consisting of approximately $680 million of net proceeds, including from settlement of net working capital and net indebtedness, and approximately $113 million monetized primarily through a reduction of net working capital prior to the date of sale. The Company has continuing involvement with Family Dollar under a transition services agreement, through which the Company and Family Dollar continue to provide certain services to each other for a period of 18 months following the date of sale. For the 13 weeks ended May 2, 2026, we recorded $21.1 million of net income from transition services between the two companies. In addition, the Company is guaranteeing lease obligations for 114 Family Dollar stores amounting to approximately $83.0 million for the first year following the date of sale, which represents the full lease obligations on these stores. The amount guaranteed in the second and third year following the date of sale is $20.0 million and $10.0 million, respectively. The fair value of the lease guarantee is immaterial.

The results of Family Dollar are presented as discontinued operations in the accompanying unaudited Condensed Consolidated Income Statements for the prior year comparable period. The assets and liabilities of Family Dollar are reflected as assets and liabilities of discontinued operations in the accompanying unaudited Condensed Consolidated Balance Sheets for the prior year comparable period.

Financial Information of Discontinued Operations

“Income from discontinued operations, net of tax” in the accompanying unaudited Condensed Consolidated Income Statements for the prior year comparable period reflects the after-tax results of the Family Dollar business and does not include any allocation of general corporate overhead expense or interest expense of the Company.

The following table summarizes the results of operations of the Family Dollar business that are being reported as discontinued operations:

The following table summarizes the Family Dollar business assets and liabilities classified as discontinued operations in the accompanying unaudited Condensed Consolidated Balance Sheets:

Assets and liabilities classified as held for sale are required to be recorded at the lower of carrying value or fair value less costs to sell. As of May 3, 2025, we remeasured the fair value of the Family Dollar business, including costs to sell and recorded an additional valuation allowance of $258.4 million. In addition, during the first quarter of fiscal 2025, certain assets and liabilities of the Family Dollar business were moved out of held for sale as they were retained by Dollar Tree. The assets and liabilities included 57 combo stores that were converted to Dollar Tree stores, and were reclassified as held and used at their fair value, which resulted in a $71.4 million reduction to the valuation allowance. The fair value of the Family Dollar business was estimated using the expected sale price as negotiated with the third party buyer. The valuation allowance was recorded within “Loss on held for sale and disposal of discontinued operations” in the summarized results of operations of discontinued operations for the 13 weeks ended May 3, 2025.

Capital expenditures related to discontinued operations were $44.1 million for the 13 weeks ended May 3, 2025.

Note 11 - Unaudited Condensed Consolidated Financial Statement Details

The Unaudited Condensed Consolidated Statements of Cash Flows for the 13 weeks ended May 3, 2025 includes the cash flows of continuing and discontinued operations. The following is a reconciliation between “Cash and cash equivalents” and “Restricted cash” of continuing operations presented in the Unaudited Condensed Consolidated Balance Sheets and the total cash, cash equivalents and restricted cash presented in the Unaudited Condensed Consolidated Statements of Cash Flows for the prior year period:

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Quarterly Financial Highlights

Financial highlights for the 13 weeks ended May 2, 2026, as compared to the 13 weeks ended May 3, 2025, include:

• Net sales increased 7.2% to $4,970.5 million primarily due to a 3.5% comparable store net sales increase and net sales of $259.0 million at non-comparable stores.
• Gross profit increased 10.9% to $1,829.5 million primarily due to our net store growth, the 3.5% comparable store net sales increase, and a 120 basis point improvement in gross profit margin.
• Selling, general and administrative expenses, as a percentage of total revenue, increased 50 basis points to 27.8%.
• Transition services agreement income, net was $21.1 million resulting from services provided to Family Dollar following the sale.
• Operating income, as a percentage of total revenue, increased 120 basis points to 9.5%.
• The effective tax rate was 24.9%, a decrease of 100 basis points as compared to the prior year quarter.
• Income from continuing operations was $347.3 million, or $1.76 per diluted share, compared to $313.5 million, or $1.47 per diluted share, in the prior year quarter.

Store Activity and Selected Sales Data

At May 2, 2026, we operated stores in 48 states and the District of Columbia, as well as stores in seven Canadian provinces. The average size of stores opened during the 13 weeks ended May 2, 2026 was approximately 9,230 selling square feet. A breakdown of the changes in store count and square footage is as follows:

The store counts above do not include new stores until they are opened for sales. Similarly, stores converted from a Family Dollar store to a Dollar Tree store are reflected in the table above when they re-opened as a Dollar Tree store.

Our net sales are derived from the sale of merchandise at new stores and at comparable stores. We use comparable store net sales to evaluate the performance of our existing stores from one year to the next. Comparable stores include only those stores that are open throughout both of the periods being compared, beginning after the first fifteen months of operation. We include sales from stores expanded, relocated or remodeled during the year in the calculation of comparable store net sales. Stores that were converted from Family Dollar stores to Dollar Tree stores are considered to be new stores and are not included in the calculation of the comparable store net sales change until after the first fifteen months of operation under the Dollar Tree brand. Additionally, sales that are excluded from the calculation of comparable store net sales are referred to as non-comparable store sales and consist of sales from new stores open fifteen months or less and stores that are closed permanently or expected to be closed for more than 90 days. Comparable store sales measures vary across the retail industry. As a result, our comparable store net sales calculation is not necessarily comparable to similarly titled measures reported by other companies.

The percentage change in comparable store net sales, as compared with the preceding year, is as follows:

Comparable store net sales are positively affected by our expanded, relocated and remodeled stores, which we include in the calculation, and are negatively affected when we open new stores or expand stores near existing stores.

Net sales per selling square foot is calculated based on total net sales for the preceding 12 months as of the end of the reporting period divided by the average selling square footage during the period. Selling square footage excludes the storage, receiving and office space that generally occupies approximately 20% of the total square footage of our stores. We believe that net sales per selling square foot more accurately depicts the productivity and operating performance of our stores as it reflects the portion of our footprint that is dedicated to selling merchandise.

Net sales per selling square foot for the 52 weeks ended May 2, 2026 and May 3, 2025 is as follows:

See our “Strategic Initiatives and Recent Developments” below for more information on the initiatives that are driving our comparable store net sales growth and net sales per selling square foot growth.

Strategic Initiatives and Recent Developments

We continue to execute on strategic initiatives to accelerate profitable growth for Dollar Tree as a standalone banner following the sale of Family Dollar. At our 2025 Investor Day held on October 15, 2025, we outlined our strategic plan that will help drive profitable sales growth: (i) expanding and enhancing our product assortment, (ii) managing costs with agility and discipline, (iii) strengthening our customer connection through data-driven marketing and other initiatives, (iv) opening new stores and improving store conditions, and (v) improving store operations and consistent execution to enhance the experience for our customers and our associates – all supported by supply chain enhancements, disciplined financial management, technology and investment in our people.

Expanded and Enhanced Assortment. A central pillar of our strategy is expanding and refining our multi-price assortment to deliver a broader, more relevant offering while preserving our foundational value proposition. Our multi-price strategy is designed to increase basket size and drive margin expansion by introducing complementary products, new categories, larger pack sizes, and select branded and licensed items that we could not historically offer under a single price point. As of May 2, 2026, we carried our expanded multi-price assortment in the majority of our stores. We are also expanding customer access through digital and delivery partnerships, such as Uber Eats.

Agile Cost Management. We are implementing cost management strategies designed to mitigate cost pressures both in how we buy and distribute our products as well as the selling, general and administrative costs to support the business. Our merchandising approach includes five primary levers: renegotiating supplier terms, re-engineering products for efficiency, shifting country of origin where advantageous, discontinuing lower-margin or underperforming items, and executing targeted retail price adjustments when appropriate.

The tariff environment remains fluid, and we expect our results to continue to be impacted by near-term challenges, potentially including higher costs due to increases or variability in tariffs. Further, we may continue to experience implementation costs associated with our mitigation strategies that impact us before the benefits from those efforts are expected to materialize.

On February 20, 2026, the U.S. Supreme Court ruled that certain of the tariffs imposed last year under the International Emergency Economic Powers Act (“IEEPA”) were unlawful. In April 2026, the U.S. Customs and Border Protection launched a platform for submitting IEEPA tariff refund claims. We are taking action to preserve our rights to refunds for these IEEPA tariffs and have submitted refund claims. Subsequent to May 2, 2026, we began receiving refunds for IEEPA tariffs previously paid, totaling approximately $110 million through May 26, 2026, including $6 million of interest. Following the Supreme Court’s decision, the United States imposed new, temporary tariffs on imports from all countries under section 122 of the Trade Act of 1974 and could take action to invoke other laws to collect additional tariffs. In May 2026, the U.S. Court of International Trade invalidated these section 122 tariffs. There remains substantial uncertainty regarding the impacts of these events on existing tariffs, the scope and duration of any newly announced tariffs, and the possibility of further additional or modified tariffs or retaliatory actions. As a result, our margins and operating results could vary significantly.

Beyond addressing the cost of goods sold, our strategy includes disciplined management of operating expenses. Following the sale of Family Dollar, we are reshaping our organization to align with the needs of the standalone Dollar Tree business, with a focus on operating leverage and scalable profitability. Our long-term objective includes reducing corporate selling, general and administrative expenses as a percentage of net sales through improved productivity, cost optimization, and right-sizing initiatives.

New Store Growth and Improved Conditions. We continue to expand our store footprint while investing to modernize and optimize our fleet. We operate more than 9,300 stores and believe we have ample opportunities for new store growth in the future, supported by disciplined site selection and capital allocation. Our modernization efforts include refresh and renovation programs, which are designed to improve the customer shopping experience.

Improved Store Operations. We are focused on improving store standards and operational consistency to enhance the in-store experience and optimize shelf productivity. These actions are intended to strengthen customer connection, increase traffic and basket size, and drive higher returns on invested capital.

Supply Chain Optimization. We are modernizing our distribution network to improve flexibility, speed, and efficiency, including investments in expanded and optimized distribution center capacity, enhanced warehouse management systems, transportation improvements, and selective automation initiatives.

In April 2025, we announced plans to return to Marietta, Oklahoma, with a new, enhanced distribution center expected to be fully operational by spring 2027, with capacity to serve approximately 700 stores across the West and Southwest regions. Reconstruction of the Marietta, Oklahoma distribution center commenced in September 2025.

In October 2025, we announced the purchase of a distribution center outside Phoenix, Arizona. On May 13, 2026, we celebrated the grand opening of this 1.0 million square foot facility with outbound deliveries to begin in June 2026, shipping to approximately 700 stores across Arizona, Colorado, Nevada, New Mexico, and Utah. These investments are expected to support long-term growth and improve network resilience, though they may modestly impact gross margin in the near-to-mid term as capacity ramps up.

Technology Investment. We are executing a multi-year plan to modernize our technology platform, replacing legacy systems with integrated, real-time tools that we believe can enhance decision-making and operational agility. Key investments include enhancements to our human capital management systems, supply chain platforms, and data analytics capabilities. These initiatives are intended to improve productivity, enable test-and-learn capabilities, and support scalable growth.

Human Capital. Our more than 150,000 associates remain foundational to our strategy. We continue to invest in competitive pay and benefits, training, career development, and initiatives designed to reduce turnover and improve productivity. Since 2023, we have promoted tens of thousands of associates and advanced initiatives focused on making it easier to work in our stores through improved tools and processes.

Sale and Separation of Family Dollar. On July 5, 2025, we completed our sale of the Family Dollar business to 1959 Holdings, LLC. Total cash generated from the sale approximated $793 million, consisting of approximately $680 million of net proceeds, including from settlement of net working capital and net indebtedness, and approximately $113 million monetized primarily through a reduction of net working capital prior to the date of sale. The Company has continuing involvement with Family Dollar under a transition services agreement, through which the Company and Family Dollar continue to provide certain services to each other for a period of 18 months following the date of sale. For information on discontinued operations, refer to Note 10 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Results of Operations

Our results of operations and period-over-period changes are discussed in the following section. Note that the cost of sales rate is calculated by dividing cost of sales by net sales. Gross profit margin is calculated as gross profit (i.e., net sales less cost of sales) divided by net sales. The selling, general and administrative expense rate and operating income margin are calculated by dividing the applicable amount by total revenue. Basis points, as referred to below, are a percentage of net sales for expense categories within gross profit and cost of sales, and are a percentage of total revenue for all other expense categories. A 100 basis point increase equals 1.00% and a 1 basis point increase equals 0.01%.

The following table contains results of operations data for the 13 weeks ended May 2, 2026 and May 3, 2025:

Net Sales

The increase in net sales in the 13 weeks ended May 2, 2026 was primarily the result of the comparable store net sales increase and net sales of $259.0 million at non-comparable stores. Comparable store net sales increased 3.5% in the 13 weeks ended May 2, 2026, as a result of a 4.5% increase in average ticket, partially offset by a 1.0% decrease in customer traffic. The increase in average ticket was as a result of targeted retail price changes executed during the second and third quarters of fiscal year 2025 and higher mix of multi-price penetration.

Gross Profit

Gross profit margin increased during the 13 weeks ended May 2, 2026 due to a 120 basis point decrease in cost of sales. The cost of sales rate decreased to 63.2% during the 13 weeks ended May 2, 2026 from 64.4% during the same period last year primarily due to

improved mark-on from pricing initiatives executed during the second and third quarters of fiscal year 2025, lower import freight costs, and lower shrink from favorable inventory count results, partially offset by higher tariff costs and higher markdowns.

Selling, General and Administrative Expenses

The selling, general and administrative expense rate increased 50 basis points during the 13 weeks ended May 2, 2026 primarily due to increased investments in marketing, higher general liability claims costs, and higher depreciation expense from store investments, partially offset by lower payroll expenses. Payroll expenses decreased primarily due to lower temporary labor used to support our multi-price rollout, lower corporate payroll and incentive compensation, partially offset by higher store payroll from wage increases. Selling, general and administrative expenses include costs to support the transition services agreement with Family Dollar.

Transition Services Agreement Income, Net

Transition services agreement income, net was $21.1 million in the 13 weeks ended May 2, 2026 resulting from services provided to Family Dollar following the sale.

Operating Income

Operating income margin increased to 9.5% for the 13 weeks ended May 2, 2026 compared to 8.3% for the same period last year, resulting from the increase in gross profit margin as described above, and income from the transition services agreement with Family Dollar, partially offset by the increase in the selling, general and administrative expense rate.

Interest Expense, Net

Interest expense, net decreased $6.4 million in the 13 weeks ended May 2, 2026 compared to the same period last year, primarily due to the repayment of our $1.0 billion principal amount of 4.00% Senior Notes in the second quarter of fiscal 2025, partially offset by lower interest income on investments, and interest on our new $500 million Term Loan.

Other Income, Net

Other income, net decreased $56.3 million in the 13 weeks ended May 2, 2026 compared to the same period last year, primarily due to a higher insurance gain recognized in the prior year for the excess of the insurance proceeds received over the losses incurred for damaged property and equipment and damaged inventory associated with the tornado that destroyed our Marietta, Oklahoma Dollar Tree distribution center. The insurance gain recognized in the first quarter of fiscal 2026 totaled $5.2 million compared to $62.0 million in fiscal 2025.

Provision for Income Taxes

The effective tax rate decreased to 24.9% for the 13 weeks ended May 2, 2026 compared to 25.9% for the comparable prior year period, primarily due to increased benefits from the vesting of share-based payment awards, partially offset by an increase in expected state taxes and lower Work Opportunity Tax credits.

Liquidity and Capital Resources

We invest capital to build and open new stores, expand and renovate existing stores, enhance and grow our distribution network, operate our existing stores, maintain and upgrade our technology, and support our other strategic initiatives. Our working capital requirements for existing stores are seasonal in nature and typically reach their peak in the months of September and October. We have satisfied our seasonal working capital requirements for existing and new stores and have funded our distribution network programs and other capital projects from internally generated funds and borrowings under our credit facilities and commercial paper program.

The following table compares our cash flows for the 13 weeks ended May 2, 2026 and May 3, 2025:

Net cash provided by operating activities increased $265.5 million primarily due to higher income from continuing operations, net of non-cash items, increases in accounts payable in the current year compared to decreases in the prior year, and reductions in merchandise inventories compared to a prior year increase. The changes in accounts payable and merchandise inventories were primarily due to the timing of certain payments and inventory receipts.

Net cash used in investing activities increased $54.0 million primarily due to no property and equipment-related insurance proceeds received in the current year compared to $50.0 million in insurance proceeds received in the prior year related to damaged property and equipment at our Dollar Tree distribution center in Marietta, Oklahoma as discussed in Note 3 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Capital expenditures were relatively unchanged from the prior year as we continue to invest in new stores and our supply chain network including the construction at our new distribution centers in Phoenix, Arizona and Marietta, Oklahoma.

Net cash used in financing activities decreased $338.5 million primarily due to $500.0 million in proceeds from our Term Loan, partially offset by higher share repurchases in the current year.

At May 2, 2026, our long-term borrowings were $3.0 billion, including our new $500.0 million Term Loan which we entered into on March 19, 2026 as discussed further in Note 4 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Additionally, we had $1.5 billion available under our Five-Year Credit Facility, as well as borrowing capacity under our commercial paper program. Further, on March 20, 2026, the existing $1.0 billion 364-Day Revolving Credit Facility expired and all commitments thereunder were terminated. In connection with the maturity of the 364-Day Revolving Credit Facility on March 20, 2026, we decreased the size of our commercial paper program, with the issuance of commercial paper notes limited to a maximum aggregate amount outstanding at any time of $1.5 billion, compared to the previous maximum permitted of $2.5 billion. The $1.5 billion Five-Year Credit Facility serves as a liquidity backstop for the repayment of notes outstanding under the commercial paper program. At May 2, 2026, we had no borrowings outstanding under our Five-Year Credit Facility or our commercial paper program. We also have $85.0 million in trade letters of credit with various financial institutions, under which $2.6 million was committed to letters of credit issued for routine purchases of imported merchandise as of May 2, 2026.

We repurchased 5,552,410 and 5,926,985 shares of common stock on the open market at a cost of $600.4 million and $436.8 million, including applicable excise tax, during the 13 weeks ended May 2, 2026 and May 3, 2025, respectively. Of the shares repurchased during the 13 weeks ended May 2, 2026 and May 3, 2025, $18.0 million and $5.0 million, respectively, settled subsequent to May 2, 2026 and May 3, 2025, respectively, and these amounts were accrued in the accompanying unaudited Condensed Consolidated Balance Sheets. At May 2, 2026, we had $1.3 billion remaining under our existing $2.5 billion Board repurchase authorization.

Subsequent to May 2, 2026, we purchased an additional 1,031,569 shares of common stock on the open market at a cost of $98.0 million, as of May 26, 2026.

Critical Accounting Estimates and Assumptions

Our condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. To prepare these financial statements, we must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosures of contingent assets and liabilities. Our estimates are often based on complex judgments, probabilities and assumptions that management believes to be reasonable, but that are inherently uncertain and unpredictable. It is also possible that other professionals, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts. Actual results could be significantly different from these estimates.

For a summary of our significant accounting policies and critical accounting estimates, refer to Note 2 of our Consolidated Financial Statements and Critical Accounting Estimates and Assumptions within Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the fiscal year ended January 31, 2026.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to various types of market risk in the normal course of our business, including the impact of interest rate changes, diesel fuel cost changes and inflation. We may enter into interest rate or diesel fuel swaps to manage exposure to interest rate and diesel fuel price changes. We do not enter into derivative instruments for any purpose other than cash flow hedging and we do not hold derivative instruments for trading purposes.

Interest Rate Risk

Our exposure to interest rate risk relates to our Five-Year Credit Facility, our Term Loan, and borrowings under our commercial paper program. At May 2, 2026, we had no borrowings outstanding under our Five-Year Credit Facility or our commercial paper program. A hypothetical increase of one percentage point on our $500.0 million Term Loan would not materially affect our results of operations or cash flows.

Inflation Risk

The primary inflationary factors impacting our business include changes to the costs of merchandise, transportation (including the cost of diesel fuel), store construction-related costs, and labor. If these inflationary pressures become significant, we may not be able to fully offset such higher costs through adjustments to our product assortment, improvements in operational efficiencies or increases in our comparable store net sales. Our inability or failure to do so could harm our business, financial condition and results of operations.

Item 4. Controls and Procedures.

Our management has carried out, with the participation of our Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”) as of the end of the period covered by this report. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of May 2, 2026, our disclosure controls and procedures were designed and functioning

effectively to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure.

In fiscal 2024, we began a phased implementation of a new warehouse management system which we expect to complete over the next several years. As of May 2, 2026, we have converted six distribution centers to the new system, including two converted during the first quarter of fiscal 2026. We have made changes to our internal control over financial reporting to align with the functionality and updated processes associated with the new system.

There were no other changes in our internal control over financial reporting during the fiscal quarter ended May 2, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

For information regarding legal proceedings in which we are involved, please see Note 3 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors.

There have been no material changes to the risk factors described in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended January 31, 2026, other than as set forth in the discussion of certain items that have impacted or could impact our business or results of operations during 2026 or in the future as disclosed in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following table presents our share repurchase activity during the first quarter of 2026:

At May 2, 2026, we had $1.3 billion remaining under our existing $2.5 billion Board repurchase authorization.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

During the fiscal quarter ended May 2, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408(a) of Regulation S-K).

Item 6. Exhibits.

Exhibit Exhibit Description Incorporated by Reference / Form Incorporated by Reference / Exhibit Incorporated by Reference / Filing Date Filed Herewith

3.1 Amended and Restated Articles of Incorporation of Dollar Tree, Inc., effective October 14, 2022 10-Q 3.1 11/22/2022 3.2 Amended and Restated By-Laws of Dollar Tree, Inc., effective June 19, 2025 8-K 3.1 6/20/2025 10.1 Credit Agreement, dated as of March 19, 2026, among Dollar Tree, Inc., Bank of America, N.A., as agent, and the banks, financial institutions and other institutional lenders party thereto 8-K 10.1 3/23/2026 10.2 Second Amendment to the Dollar Tree, Inc. 2021 Omnibus Incentive Plan, effective March 18, 2026 X 10.3 Form of Performance-Based Restricted Stock Unit Agreement under the 2021 Omnibus Incentive Plan (portions of the exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K) X

Exhibit Exhibit Description Incorporated by Reference Incorporated by Reference Filed Herewith

10.4 Form of Restricted Stock Unit Agreement (Standard) under the 2021 Omnibus Incentive Plan (portions of the exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K) X 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X 32.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X (101) The following financial statements from our Form 10-Q for the fiscal quarter ended May 2, 2026, formatted in Inline XBRL: (i) Condensed Consolidated Income Statements, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Shareholders’ Equity, (v) Condensed Consolidated Statements of Cash Flows and (vi) Notes to Unaudited Condensed Consolidated Financial Statements X (104) The cover page from our Form 10-Q for the fiscal quarter ended May 2, 2026, formatted in Inline XBRL and contained in Exhibit 101 X | *Management contract or compensatory plan or arrangement | | | | | |