Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 202030, 2021
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 0-25464
dltr-20211030_g1.gif
DOLLAR TREE, INC.
(Exact name of registrant as specified in its charter)
Virginia26-2018846
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
500 Volvo Parkway
Chesapeake,Virginia23320
(Address of principal executive offices)(Zip Code)

(757) (757) 321-5000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Symbol(s)Name of each exchange on which registered
Common Stock, par value $.01 per shareDLTRNASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes☒No☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes☒No☐



Table of Contents
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.        
Large accelerated filer☒Accelerated filer☐
Non-accelerated filer☐Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
☐No☒
As of November 20, 2020,19, 2021, there were 235,192,152224,956,059 shares of the registrant’s common stock outstanding.


2

DOLLAR TREE, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 202030, 2021
TABLE OF CONTENTS
Page
PART I - FINANCIAL INFORMATION
Page
PART I - FINANCIAL INFORMATION
Item 1.
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
9
Notes to Unaudited Condensed Consolidated Financial Statements
10
Item 2.
1716
Item 3.
3028
Item 4.
3028
PART II - OTHER INFORMATION
Item 1.
3129
Item 1A.
3129
Item 2.
3331
Item 3.
3331
Item 4.
3331
Item 5.
3331
Item 6.
3331
3533


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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

DOLLAR TREE, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Unaudited)
 13 Weeks Ended 39 Weeks Ended 13 Weeks Ended39 Weeks Ended
 October 31, November 2, October 31, November 2, October 30,October 31,October 30,October 31,
(in millions, except per share data) 2020 2019 2020 2019(in millions, except per share data)2021202020212020
Net sales $6,177.0
 $5,746.2
 $18,741.4
 $17,295.5
Net sales$6,415.4 $6,176.7 $19,232.4 $18,741.1 
Other revenueOther revenue2.3 0.3 8.2 0.3 
Total revenueTotal revenue6,417.7 6,177.0 19,240.6 18,741.4 
Cost of sales 4,252.6
 4,041.7
 13,105.9
 12,215.3
Cost of sales4,651.7 4,252.6 13,643.6 13,105.9 
Gross profit 1,924.4
 1,704.5
 5,635.5
 5,080.2
Selling, general and administrative expenses 1,458.9
 1,346.1
 4,429.2
 4,067.4
Selling, general and administrative expenses1,455.5 1,458.9 4,364.4 4,429.2 
Operating income 465.5
 358.4
 1,206.3
 1,012.8
Operating income310.5 465.5 1,232.6 1,206.3 
Interest expense, net 38.1
 41.4
 113.1
 122.9
Interest expense, net33.4 38.1 99.4 113.1 
Other expense, net 0.1
 0.1
 0.8
 0.7
Other expense, net0.2 0.1 0.2 0.8 
Income before income taxes 427.3
 316.9
 1,092.4
 889.2
Income before income taxes276.9 427.3 1,133.0 1,092.4 
Provision for income taxes 97.3
 61.1
 253.3
 185.2
Provision for income taxes60.1 97.3 259.3 253.3 
Net income $330.0
 $255.8
 $839.1
 $704.0
Net income$216.8 $330.0 $873.7 $839.1 
Basic net income per share $1.39
 $1.08
 $3.54
 $2.97
Basic net income per share$0.96 $1.39 $3.82 $3.54 
Diluted net income per share $1.39
 $1.08
 $3.53
 $2.95
Diluted net income per share$0.96 $1.39 $3.80 $3.53 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.


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DOLLAR TREE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 13 Weeks Ended 39 Weeks Ended13 Weeks Ended39 Weeks Ended
 October 31, November 2, October 31, November 2,October 30,October 31,October 30,October 31,
(in millions) 2020 2019 2020 2019(in millions)2021202020212020
Net income $330.0
 $255.8
 $839.1
 $704.0
Net income$216.8 $330.0 $873.7 $839.1 
        
Foreign currency translation adjustments 0.6
 0.4
 (0.8) (0.9)Foreign currency translation adjustments0.7 0.6 3.9 (0.8)
        
Total comprehensive income $330.6
 $256.2
 $838.3
 $703.1
Total comprehensive income$217.5 $330.6 $877.6 $838.3 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.



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DOLLAR TREE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in millions) October 31, 2020 February 1, 2020 November 2, 2019(in millions)October 30, 2021January 30, 2021October 31, 2020
ASSETS      ASSETS  
Current assets:      Current assets:  
Cash and cash equivalents $1,118.3
 $539.2
 $433.7
Cash and cash equivalents$701.4 $1,416.7 $1,118.3 
Merchandise inventories 3,792.3
 3,522.0
 3,882.9
Merchandise inventories4,316.0 3,427.0 3,792.3 
Other current assets 260.4
 208.2
 255.7
Other current assets357.1 207.1 260.4 
Total current assets 5,171.0
 4,269.4
 4,572.3
Total current assets5,374.5 5,050.8 5,171.0 
Property, plant and equipment, net of accumulated depreciation
of $4,618.1, $4,194.1 and $4,056.6, respectively
 4,095.6
 3,881.8
 3,810.7
Property, plant and equipment, net of accumulated depreciation
of $5,209.9, $4,765.0 and $4,618.1, respectively
Property, plant and equipment, net of accumulated depreciation
of $5,209.9, $4,765.0 and $4,618.1, respectively
4,377.4 4,116.3 4,095.6 
Restricted cash 46.9
 46.8
 46.6
Restricted cash53.4 46.9 46.9 
Operating lease right-of-use assets 6,185.1
 6,225.0
 5,864.6
Operating lease right-of-use assets6,424.0 6,324.1 6,185.1 
Goodwill 1,983.1
 1,983.3
 2,296.5
Goodwill1,985.3 1,984.4 1,983.1 
Trade name intangible asset 3,100.0
 3,100.0
 3,100.0
Trade name intangible asset3,100.0 3,100.0 3,100.0 
Deferred tax asset 23.3
 24.4
 0
Deferred tax asset22.3 23.2 23.3 
Other assets 47.2
 43.9
 51.4
Other assets53.1 50.3 47.2 
Total assets $20,652.2
 $19,574.6
 $19,742.1
Total assets$21,390.0 $20,696.0 $20,652.2 
LIABILITIES AND SHAREHOLDERS’ EQUITY  
  
  
LIABILITIES AND SHAREHOLDERS’ EQUITY   
Current liabilities:  
  
  
Current liabilities:   
Current portion of long-term debt $300.0
 $250.0
 $750.0
Current portion of long-term debt$— $— $300.0 
Current portion of operating lease liabilities 1,296.5
 1,279.3
 1,202.6
Current portion of operating lease liabilities1,388.0 1,348.2 1,296.5 
Accounts payable 1,587.2
 1,336.5
 1,473.1
Accounts payable1,984.8 1,480.5 1,587.2 
Income taxes payable 0
 62.7
 0
Income taxes payable— 86.3 — 
Other current liabilities 858.6
 618.0
 754.0
Other current liabilities918.4 815.3 858.6 
Total current liabilities 4,042.3
 3,546.5
 4,179.7
Total current liabilities4,291.2 3,730.3 4,042.3 
Long-term debt, net, excluding current portion 3,225.3
 3,522.2
 3,520.2
Long-term debt, net, excluding current portion3,231.1 3,226.2 3,225.3 
Operating lease liabilities, long-term 4,962.1
 4,979.5
 4,636.0
Operating lease liabilities, long-term5,151.0 5,065.5 4,962.1 
Deferred income taxes, net 1,043.1
 984.7
 1,001.5
Deferred income taxes, net1,096.8 1,013.5 1,043.1 
Income taxes payable, long-term 31.0
 28.9
 29.7
Income taxes payable, long-term26.4 22.6 31.0 
Other liabilities 387.3
 258.0
 253.7
Other liabilities349.1 352.6 387.3 
Total liabilities 13,691.1
 13,319.8
 13,620.8
Total liabilities14,145.6 13,410.7 13,691.1 
Commitments and contingencies 


 


 


Commitments and contingencies (Note 2)Commitments and contingencies (Note 2)000
Shareholders’ equity 6,961.1
 6,254.8
 6,121.3
Shareholders’ equity7,244.4 7,285.3 6,961.1 
Total liabilities and shareholders’ equity $20,652.2
 $19,574.6
 $19,742.1
Total liabilities and shareholders’ equity$21,390.0 $20,696.0 $20,652.2 
      
Common shares outstanding 235.2
 236.7
 236.7
Common shares outstanding224.9 233.4 235.2 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.



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DOLLAR TREE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
13 Weeks Ended October 30, 2021
(in millions)Common
Stock
Shares		Common
Stock		Additional
Paid-in
Capital		Accumulated
Other
Comprehensive
Loss		Retained
Earnings		Shareholders'
Equity
Balance at July 31, 2021224.9 $2.2 $1,204.9 $(32.0)$5,836.6 $7,011.7 
Net income— — — — 216.8 216.8 
Total other comprehensive income— — — 0.7 — 0.7 
Issuance of stock under Employee Stock
    Purchase Plan		— — 2.4 — — 2.4 
Stock-based compensation, net— — 12.8 — — 12.8 
Balance at October 30, 2021224.9 $2.2 $1,220.1 $(31.3)$6,053.4 $7,244.4 
  13 Weeks Ended October 31, 2020
(in millions) 
Common
Stock
Shares
 
Common
Stock
 
Additional
Paid-in
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Retained
Earnings
 
Shareholders'
Equity
Balance at August 1, 2020 237.3
 $2.4
 $2,505.5
 $(41.2) $4,346.9
 $6,813.6
Net income —
 —
 —
 —
 330.0
 330.0
Total other comprehensive income —
 —
 —
 0.6
 —
 0.6
Issuance of stock under Employee Stock
    Purchase Plan
 0
 —
 2.5
 —
 —
 2.5
Stock-based compensation, net 0
 —
 14.4
 —
 —
 14.4
Repurchase of stock (2.1) —
 (200.0) —
 —
 (200.0)
Balance at October 31, 2020 235.2
 $2.4
 $2,322.4
 $(40.6) $4,676.9
 $6,961.1
 39 Weeks Ended October 31, 202039 Weeks Ended October 30, 2021
(in millions) 
Common
Stock
Shares
 
Common
Stock
 
Additional
Paid-in
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Retained
Earnings
 
Shareholders'
Equity
(in millions)Common
Stock
Shares		Common
Stock		Additional
Paid-in
Capital		Accumulated
Other
Comprehensive
Loss		Retained
Earnings		Shareholders'
Equity
Balance at February 1, 2020 236.7
 $2.4
 $2,454.4
 $(39.8) $3,837.8
 $6,254.8
Balance at January 30, 2021Balance at January 30, 2021233.4 $2.3 $2,138.5 $(35.2)$5,179.7 $7,285.3 
Net income —
 —
 —
 —
 839.1
 839.1
Net income— — — — 873.7 873.7 
Total other comprehensive loss —
 —
 —
 (0.8) —
 (0.8)
Total other comprehensive incomeTotal other comprehensive income— — — 3.9 — 3.9 
Issuance of stock under Employee Stock
Purchase Plan
 0.1
 —
 7.6
 —
 —
 7.6
Issuance of stock under Employee Stock
Purchase Plan		0.1 — 8.3 — — 8.3 
Exercise of stock options 0.1
 —
 6.7
 —
 —
 6.7
Exercise of stock options— — 0.7 — — 0.7 
Stock-based compensation, net 0.4
 —
 53.7
 —
 —
 53.7
Stock-based compensation, net0.6 — 22.5 — — 22.5 
Repurchase of stock (2.1) —
 (200.0) —
 —
 (200.0)Repurchase of stock(9.2)(0.1)(949.9)— — (950.0)
Balance at October 31, 2020 235.2
 $2.4
 $2,322.4
 $(40.6) $4,676.9
 $6,961.1
Balance at October 30, 2021Balance at October 30, 2021224.9 $2.2 $1,220.1 $(31.3)$6,053.4 $7,244.4 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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DOLLAR TREE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (cont.)
(Unaudited)
13 Weeks Ended October 31, 2020
(in millions)Common
Stock
Shares		Common
Stock		Additional
Paid-in
Capital		Accumulated
Other
Comprehensive
Loss		Retained
Earnings		Shareholders'
Equity
Balance at August 1, 2020237.3 $2.4 $2,505.5 $(41.2)$4,346.9 $6,813.6 
Net income— — — — 330.0 330.0 
Total other comprehensive income— — — 0.6 — 0.6 
Issuance of stock under Employee Stock
    Purchase Plan		— — 2.5 — — 2.5 
Stock-based compensation, net— — 14.4 — — 14.4 
Repurchase of stock(2.1)— (200.0)— — (200.0)
Balance at October 31, 2020235.2 $2.4 $2,322.4 $(40.6)$4,676.9 $6,961.1 
  13 Weeks Ended November 2, 2019
(in millions) 
Common
Stock
Shares
 
Common
Stock
 
Additional
Paid-in
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Retained
Earnings
 
Shareholders'
Equity
Balance at August 3, 2019 236.8
 $2.4
 $2,443.9
 $(39.6) $3,459.0
 $5,865.7
Net income —
 —
 —
 —
 255.8
 255.8
Total other comprehensive income —
 —
 —
 0.4
 —
 0.4
Issuance of stock under Employee Stock
    Purchase Plan
 0
 —
 2.3
 —
 —
 2.3
Exercise of stock options 0
 —
 0.8
 —
 —
 0.8
Stock-based compensation, net 0
 —
 7.9
 —
 —
 7.9
Repurchase of stock (0.1) —
 (11.6) —
 —
 (11.6)
Balance at November 2, 2019 236.7
 $2.4
 $2,443.3
 $(39.2) $3,714.8
 $6,121.3
 39 Weeks Ended November 2, 201939 Weeks Ended October 31, 2020
(in millions) 
Common
Stock
Shares
 
Common
Stock
 
Additional
Paid-in
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Retained
Earnings
 
Shareholders'
Equity
(in millions)Common
Stock
Shares		Common
Stock		Additional
Paid-in
Capital		Accumulated
Other
Comprehensive
Loss		Retained
Earnings		Shareholders'
Equity
Balance at February 2, 2019 238.1
 $2.4
 $2,602.7
 $(38.3) $3,076.1
 $5,642.9
Cumulative effect of adopted accounting
standards, net
 —
 —
 —
 —
 (65.3) (65.3)
Balance at February 1, 2020Balance at February 1, 2020236.7 $2.4 $2,454.4 $(39.8)$3,837.8 $6,254.8 
Net income —
 —
 —
 —
 704.0
 704.0
Net income— — — — 839.1 839.1 
Total other comprehensive loss —
 —
 —
 (0.9) —
 (0.9)Total other comprehensive loss— — — (0.8)— (0.8)
Issuance of stock under Employee Stock
Purchase Plan
 0.1
 —
 7.5
 —
 —
 7.5
Issuance of stock under Employee Stock
Purchase Plan		0.1 — 7.6 — — 7.6 
Exercise of stock options 0
 —
 4.9
 —
 —
 4.9
Exercise of stock options0.1 — 6.7 — — 6.7 
Stock-based compensation, net 0.4
 —
 28.2
 —
 —
 28.2
Stock-based compensation, net0.4 — 53.7 — — 53.7 
Repurchase of stock (1.9) —
 (200.0) —
 —
 (200.0)Repurchase of stock(2.1)— (200.0)— — (200.0)
Balance at November 2, 2019 236.7
 $2.4
 $2,443.3
 $(39.2) $3,714.8
 $6,121.3
Balance at October 31, 2020Balance at October 31, 2020235.2 $2.4 $2,322.4 $(40.6)$4,676.9 $6,961.1 
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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DOLLAR TREE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 39 Weeks Ended 39 Weeks Ended
 October 31, November 2, October 30,October 31,
(in millions) 2020 2019(in millions)20212020
Cash flows from operating activities:    Cash flows from operating activities:  
Net income $839.1
 $704.0
Net income$873.7 $839.1 
Adjustments to reconcile net income to net cash provided by operating activities:  
  
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization 503.7
 466.3
Depreciation and amortization527.3 503.7 
Provision for deferred income taxes 59.4
 50.3
Provision for deferred income taxes85.0 59.4 
Stock-based compensation expense 70.5
 52.5
Stock-based compensation expense63.1 70.5 
Amortization of debt discount and debt-issuance costs 3.1
 4.9
Amortization of debt discount and debt-issuance costs4.9 3.1 
Other non-cash adjustments to net income 7.4
 24.2
Other non-cash adjustments to net income8.6 7.4 
Changes in operating assets and liabilities 250.5
 (287.7)Changes in operating assets and liabilities(543.9)250.5 
Net cash provided by operating activities 1,733.7
 1,014.5
Net cash provided by operating activities1,018.7 1,733.7 
Cash flows from investing activities:  
  
Cash flows from investing activities:  
Capital expenditures (707.0) (782.3)Capital expenditures(749.6)(707.0)
Proceeds from governmental grant 0
 16.5
Proceeds from governmental grant2.9 — 
Payments for fixed asset disposition (0.5) (2.9)
Proceeds from (payments for) fixed asset dispositionProceeds from (payments for) fixed asset disposition0.4 (0.5)
Net cash used in investing activities (707.5) (768.7)Net cash used in investing activities(746.3)(707.5)
Cash flows from financing activities:  
  
Cash flows from financing activities:  
Principal payments for long-term debt (250.0) 0
Principal payments for long-term debt— (250.0)
Proceeds from revolving credit facility 750.0
 0
Proceeds from revolving credit facility— 750.0 
Repayments of revolving credit facility (750.0) 0
Repayments of revolving credit facility— (750.0)
Proceeds from stock issued pursuant to stock-based compensation plans 14.3
 12.3
Proceeds from stock issued pursuant to stock-based compensation plans9.0 14.3 
Cash paid for taxes on exercises/vesting of stock-based compensation (16.8) (24.3)Cash paid for taxes on exercises/vesting of stock-based compensation(40.6)(16.8)
Payments for repurchase of stock (194.2) (200.0)Payments for repurchase of stock(950.0)(194.2)
Net cash used in financing activities (446.7) (212.0)Net cash used in financing activities(981.6)(446.7)
Effect of exchange rate changes on cash, cash equivalents and restricted cash (0.3) (0.2)Effect of exchange rate changes on cash, cash equivalents and restricted cash0.4 (0.3)
Net increase in cash, cash equivalents and restricted cash 579.2
 33.6
Net increase (decrease) in cash, cash equivalents and restricted cashNet increase (decrease) in cash, cash equivalents and restricted cash(708.8)579.2 
Cash, cash equivalents and restricted cash at beginning of period 586.0
 446.7
Cash, cash equivalents and restricted cash at beginning of period1,463.6 586.0 
Cash, cash equivalents and restricted cash at end of period $1,165.2
 $480.3
Cash, cash equivalents and restricted cash at end of period$754.8 $1,165.2 
Supplemental disclosure of cash flow information:  
  
Supplemental disclosure of cash flow information:  
Cash paid for:  
  
Cash paid for:  
Interest, net of amounts capitalized $80.4
 $89.7
Interest, net of amounts capitalized$65.7 $80.4 
Income taxes $300.5
 $248.9
Income taxes$362.5 $300.5 
Non-cash transactions:    Non-cash transactions:
Right-of-use assets obtained in exchange for new operating lease liabilitiesRight-of-use assets obtained in exchange for new operating lease liabilities$1,134.3 $959.6 
Accrued capital expenditures $41.3
 $73.8
Accrued capital expenditures$63.4 $41.3 
 See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.


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DOLLAR TREE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Basis of Presentation
Unless otherwise stated, references to “we,” “us,” and “our” in this quarterly report on Form 10-Q refer to Dollar Tree, Inc. and its direct and indirect subsidiaries on a consolidated basis. We have prepared the accompanying unaudited condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles 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 year ended February 1, 2020.January 30, 2021. The results of operations for the 13 and 39 weeks ended October 31, 202030, 2021 are not necessarily indicative of the results to be expected for the entire fiscal year ending January 30, 2021.29, 2022.
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 October 30, 2021 and October 31, 2020 and November 2, 2019 and the results of our operations and cash flows for the periods presented. The February 1, 2020January 30, 2021 balance sheet information was derived from the audited consolidated financial statements as of that date.
Certain prior year amounts have been reclassified for consistency with the current year presentation.
Note 2 - Legal ProceedingsCommitments and Contingencies
Purchase Obligations
At October 30, 2021, we have commitments totaling $253.8 million related to agreements for ocean shipping contracts.
Contingencies
We are defendants in legal proceedings including the class, collective, representative and large cases described below as well as individual claims in arbitration. 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 or financial condition. 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 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. For matters that have settled, we reserve the estimated settlement amount even if the settlement has not been approved by the court. 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 legal proceedings where we have determined that a loss is reasonably possible but not probable, we are unable to estimate the amount or range of the reasonably possible loss 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.
Dollar Tree Active Matters
The Food and Drug Administration (“FDA”) has alleged that we improperly sold certain topically applied, over the counter (“OTC”) products manufactured by certain Chinese factories that were on an import “alert” restriction issued by the FDA. We responded to the FDA by proposing and implementing enhanced procedures and processes for any OTC products we import from China.
Actual or threatened California state court lawsuits have been filed against Dollar Tree and Family Dollar for similar employment-related claims brought under the Private Attorney General Act (“PAGA”). These cases may allege violations such as failure to provide employees with compliant rest and meal breaks, suitable seating and overtime pay, reimburse business expenses, pay minimum wages for all time worked, provide accurate wage statements, and timely pay wages as well as other off-the-clock and potential labor code violations.
NaN lawsuits are pending against us and our vendors alleging that personal talc powder products caused cancer. We do not believe the products we sold caused the illnesses. Our past talc lawsuits have been resolved without material loss to the company but
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no assurance can be given as to the outcome of pending or future cases. Although we have indemnification rights against our vendors, it is uncertain whether the vendors will have the financial ability to carry out their obligations. It is also uncertain whether our insurers will deny coverage under our various policies.
Dollar Tree Resolved Matters
In JanuaryDecember 2020, a consumerformer store manager brought a class action was filed against us in New YorkCalifornia state court alleging Almond Milk sold by us with “Vanilla” featured prominently on its packaging is mislabeled because it does not contain the expected amount, type,we failed to reimburse employees for business expenses and proportion of vanilla relative to non-vanilla flavor components.in so failing, engaged in unfair competition. The legal claims include New York consumer protection laws, negligent misrepresentations, breach of warranties, fraud and unjust enrichment.case has been resolved.
Family Dollar Active Matters
In August 2020, a consumer class action was filed against us in New York alleging Smoked Almonds sold by us are mislabeled because the almonds do not go through a smoking process but rather acquire their smoky taste through the use of smoked flavoring. The legal claims include New York consumer protection laws, negligent misrepresentations, breach of warranties, fraud and unjust enrichment.
Actual or threatened California state court lawsuits have beenIn January, April, and September 2021, state-wide consumer class actions were filed against Dollar Tree and Family Dollar for similar employment-related claims brought under Private Attorney General Act (“PAGA”). These cases may allege violations such as failure to provide employees with compliant rest and meal breaks, suitable seating, overtime pay, reimburse business expenses, pay minimum wages for all time worked, provide accurate wage statements, and timely pay wages as well as other potential labor code violations.

Lawsuits have been filed against Dollar Tree, Family Dollar and our vendors alleging that personal talc powder products caused cancer. We do not believeus by the products we sold caused the illnesses. We believe these lawsuits are insured and we are being indemnified by our third party vendors.
Dollar Tree Resolved Matters
In April 2015, a distribution center employee filed a class action in California state court with allegations concerning wages, meal and rest breaks, recovery periods, wage statements and timely termination pay. We have reached an agreement and received final approval from the court.
In August 2018, a former employee brought suit in California state court as a class action and as a PAGA representative suit alleging we failed to provide all non-exempt California store employees with compliant rest and meal breaks, accrued vacation, accurate wage statements and final pay upon termination of employment. We have reached an agreement to settle the matter and have received the court’s approval.
In June 2020, a current employee filed a class action in California state court on behalf of herself and other non-exempt store employees in California alleging we failed to provide an effective illness and injury prevention program in our California stores and failed to provide personal protective equipment to our store employees thereby engaging in unfair business practices and creating a public nuisance. The court granted our request to compel arbitration which resolves the class action matter.
Family Dollar Active Matters
Beginning in 2019, asame law firm has filed lawsuits around the country, including purported nationwidein Georgia and state class actions, alleging we violated the public accommodation requirements of the Americans with Disabilities Act or its state law equivalent, by systemically blocking the aisles with merchandise.
In October 2019, a state and federal class action was filed in New York alleging that we sold Zantac containing N-Nitrosodimethylamine, which is classified by the FDA as a probable carcinogen. The suit allegesAlabama, respectively, for breach of warranty fraud, unjust enrichment, and violationbased on the allegation that the coffee we sold was mislabeled because the canisters did not contain enough coffee to make the number of New York’s General Business Law. We believe we are fully indemnified by our supplier.cups of coffee stated on the label.
Please see the description above for talc and PAGA lawsuits against Family Dollar.
Family Dollar Resolved Matters
In January 2017,late 2019 and early 2020, personal injury and consumer class actions were filed alleging that we sold Zantac containing a customer filed a class actionprobable carcinogen. The lawsuits were dismissed in federal court in Illinois alleging we violated various state consumer fraud laws as well as express and implied warranties by selling a product that purported to contain aloe when it did not.June 2021. The requested class is limited totime for appealing the state of Illinois. The courtdismissal has dismissed the lawsuit.not run.
Note 3 - Long-Term Debt
In the first quarter of fiscal 2020, we paid the remaining $250.0 million outstanding under our Senior Floating Rate Notes due 2020.
Additionally, in the first quarter of fiscal 2020, we preemptively drew $750.0 million on our Revolving Credit Facility to reduce our exposure to potential short-term liquidity risk in the banking system as a result of the COVID-19 pandemic, all of which was repaid as of October 31, 2020.
As of October 31, 2020, we were in compliance with our debt covenants.
Note 43 - Fair Value Measurements
As required, 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 significant impairment charges during the 13 or 39 weeks ended October 30, 2021 and October 31, 2020 and November 2, 2019.

2020.
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 aggregate fair values and carrying values of our long-term borrowings were as follows:
  October 31, 2020 February 1, 2020 November 2, 2019
(in millions) Fair Value Carrying Value Fair Value Carrying Value Fair Value Carrying Value
Level 1            
Senior Notes $3,966.3
 $3,531.2
 $4,064.5
 $3,779.9
 $4,530.3
 $4,278.6

October 30, 2021January 30, 2021October 31, 2020
(in millions)Fair ValueCarrying ValueFair ValueCarrying ValueFair ValueCarrying Value
Level 1  
Senior Notes$3,532.4 $3,234.5 $3,654.4 $3,231.5 $3,966.3 $3,531.2 
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 carrying value of our Revolving Credit Facility approximates its fair value because the interest rates vary with market interest rates.

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Note 54 - Net Income Per Share
The following table sets forth the calculations of basic and diluted net income per share:
  13 Weeks Ended 39 Weeks Ended
  October 31, November 2, October 31, November 2,
(in millions, except per share data) 2020 2019 2020 2019
Basic net income per share:        
Net income $330.0
 $255.8
 $839.1
 $704.0
Weighted average number of shares outstanding 236.8
 236.7
 237.0
 237.4
Basic net income per share $1.39
 $1.08
 $3.54
 $2.97
Diluted net income per share:        
Net income $330.0
 $255.8
 $839.1
 $704.0
Weighted average number of shares outstanding 236.8
 236.7
 237.0
 237.4
Dilutive effect of stock options and restricted stock (as
determined by applying the treasury stock method)		 1.1
 0.8
 0.8
 0.9
Weighted average number of shares and dilutive potential
shares outstanding		 237.9
 237.5
 237.8
 238.3
Diluted net income per share $1.39
 $1.08
 $3.53
 $2.95

13 Weeks Ended39 Weeks Ended
October 30,October 31,October 30,October 31,
(in millions, except per share data)2021202020212020
Basic net income per share:
Net income$216.8 $330.0 $873.7 $839.1 
Weighted average number of shares outstanding224.9 236.8 228.9 237.0 
Basic net income per share$0.96 $1.39 $3.82 $3.54 
Diluted net income per share:
Net income$216.8 $330.0 $873.7 $839.1 
Weighted average number of shares outstanding224.9 236.8 228.9 237.0 
Dilutive effect of stock options and restricted stock (as
   determined by applying the treasury stock method)		0.9 1.1 1.0 0.8 
Weighted average number of shares and dilutive potential
   shares outstanding		225.8 237.9 229.9 237.8 
Diluted net income per share$0.96 $1.39 $3.80 $3.53 
For the 13 and 39 weeks ended October 30, 2021 and October 31, 2020, and November 2, 2019, substantially all of the stock options outstanding were included in the calculation of the weighted average number of shares and dilutive potential shares outstanding.
Note 65 - Stock-Based Compensation
For a discussion of our stock-based compensation plans, refer to “Note 11 - Stock-Based Compensation Plans” of our Annual Report on Form 10-K for the year ended February 1, 2020.January 30, 2021. Stock-based compensation expense was $70.5$63.1 million and $52.5$70.5 million during the 39 weeks ended October 30, 2021 and October 31, 2020, and November 2, 2019, respectively.
Restricted Stock
We issue service-based RSUs to employees and officers and issue PSUs to certain of our officers. We recognize expense based on the estimated fair value of the RSUs or PSUs granted over the requisite service period, which is generally three years, on a straight-line basis or a shorter period based on the retirement eligibility of the grantee. The fair value of RSUs and PSUs is determined using our closing stock price on the date of grant.

Service-Based RSUs
The following table summarizes the status of service-based RSUs as of October 31, 202030, 2021 and changes during the 39 weeks then ended:
Number of SharesWeighted Average
Grant Date
Fair Value
Nonvested at January 30, 20211,265,216 $83.16 
Granted631,587 108.90 
Vested(604,670)87.44 
Forfeited(114,836)92.57 
Nonvested at October 30, 20211,177,297 $93.86 
  Number of Shares 
Weighted Average
Grant Date
Fair Value
Nonvested at February 1, 2020 1,049,081
 $95.17
Granted 845,394
 73.08
Vested (528,710) 91.06
Forfeited (80,457) 83.36
Nonvested at October 31, 2020 1,285,308
 $83.07

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PSUs
The following table summarizes the status of PSUs as of October 31, 202030, 2021 and changes during the 39 weeks then ended:
  Number of Shares 
Weighted Average
Grant Date
Fair Value
Nonvested at February 1, 2020 320,500
 $99.29
Granted 428,377
 74.46
Vested (221,876) 88.12
Forfeited (89,390) 89.44
Nonvested at October 31, 2020 437,611
 $82.66

Number of SharesWeighted Average
Grant Date
Fair Value
Nonvested at January 30, 2021423,272 $82.67 
Granted422,524 95.04 
Vested(218,232)79.44 
Forfeited(42,592)95.66 
Nonvested at October 30, 2021584,972 $91.86 
Note 7 - Leases
Our lease portfolio primarily consists of leases for our retail store locations and we also lease vehicles and trailers, as well as distribution center space and equipment.
The lease cost for operating leases that was recognized in the accompanying unaudited condensed consolidated income statements for the 13 and 39 weeks ended October 31, 2020 and November 2, 2019 was as follows:
  13 Weeks Ended 39 Weeks Ended
(in millions) October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019
Operating lease cost $389.7
 $378.2
 $1,158.5
 $1,139.8
Variable lease cost 95.3
 94.7
 288.0
 272.2
Total lease cost* $485.0
 $472.9
 $1,446.5
 $1,412.0
         
*Excludes short-term lease cost and sublease income, which are immaterial


As of October 31, 2020, maturities of lease liabilities were as follows:
  (in millions)
Remainder of 2020 $305.2
2021 1,474.8
2022 1,286.2
2023 1,072.4
2024 857.6
Thereafter 2,116.8
Total undiscounted lease payments 7,113.0
Less interest 854.4
Present value of lease liabilities $6,258.6

The future minimum lease payments above exclude $243.7 million of legally binding minimum lease payments for leases signed but not yet commenced as of October 31, 2020.
Information regarding the weighted-average remaining lease term and the weighted-average discount rate for operating leases as of October 31, 2020 and November 2, 2019 is as follows:
  October 31, 2020 November 2, 2019
Weighted-average remaining lease term (years) 6.2
 6.5
Weighted-average discount rate 4.0% 4.4%

The following represents supplemental information pertaining to our operating lease arrangements for the 13 and 39 weeks ended October 31, 2020 and November 2, 2019:
  13 Weeks Ended 39 Weeks Ended
(in millions) October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019
Cash paid for amounts included in the measurement
of lease liabilities:		        
Operating cash flows from operating leases $383.3
 $367.5
 $1,132.7
 $1,099.1
Right-of-use assets obtained in exchange for new
operating lease liabilities		 314.0
 163.9
 959.6
 593.2

Note 86 - Shareholders’ Equity
We did not repurchase any shares of common stock on the open market during the 13 weeks ended October 30, 2021. During the 39 weeks ended October 30, 2021, we repurchased 9,156,898 shares of common stock on the open market for approximately $950.0 million. We repurchased 2,154,304 shares of common stock on the open market for approximately $200.0 million during the 13 and 39 weeks ended October 31, 2020. Approximately $5.8 million in share repurchases had not settled as of October 31, 2020. This amount was accrued and is reflected in “Other current liabilities” within the accompanying unaudited condensed consolidated balance sheet as of October 31, 2020. We repurchased 125,048 and 1,967,355 shares of common stock on the open market for approximately $11.6 million and $200.0 million during
During the 13 and 39 weeks ended NovemberOctober 30, 2021, the Board increased our share repurchase authorization by $1.05 billion to an aggregate amount of $2.5 billion, including $1.45 billion available for repurchases under the Board’s previous repurchase authorization approved on March 2, 2019, respectively. As of October 31, 2020, we have $600.0 million remaining under Board repurchase authorization.2021.
Note 97 - Income Taxes
On March 27, 2020, the Coronavirus Aid, Relief,Segments and Economic Security Act (“CARES Act”) was signed into law. The CARES Act retroactively changed the recovery period for Qualified Improvement Property to 15 years for eligible property placed in service subsequent to December 31, 2017. In the first quarter of 2020, we reclassified $67.0 million to the “Deferred income taxes, net” liability from “Income taxes payable” to reflect the additional currently deductible depreciation associated with the change in recovery period for Qualified Improvement Property.

Note 10 - SegmentsDisaggregated Revenue
We operate a chain of more than 15,60015,900 retail discount stores in 48 states and 5 Canadian provinces. Our operations are conducted in 2 reporting business segments: Dollar Tree and Family Dollar. We define our segments as those operations whose results our chief operating decision maker (“CODM”) regularly reviews to analyze performance and allocate resources.
The Dollar Tree segment is the leading operator of discount variety stores offering merchandise predominantly at the fixed price point of $1.00. The Dollar Tree segment includes our operations under the “Dollar Tree” and “Dollar Tree Canada” brands, 15 distribution centers in the United States and 2 distribution centers in Canada.
The Family Dollar segment operates a chain of general merchandise retail discount stores providing consumers with a selection of competitively-priced merchandise in convenient neighborhood stores. The Family Dollar segment consists of our operations under the “Family Dollar” brand and 11 distribution centers. The Family Dollar segment Operating income includes advertising revenue, which is a component of Other revenue in the accompanying unaudited condensed consolidated income statements.
We measure the results of our segments using, among other measures, each segment’s net sales, gross profit and operating income. The CODM reviews these metrics for each of our reporting segments. We may revise the measurement of each segment’s operating income, as determined by the information regularly reviewed by the CODM. If the measurement of a segment changes, prior period amounts and balances are reclassified to be comparable to the current period’s presentation. Corporate, support and Other consists primarily of store support center costs that are considered shared services and therefore these selling, general and administrative costs are excluded from our 2 reporting business segments. These costs include operating expenses for our store support centers in Chesapeake, Virginiacenter and Matthews, North Carolina. During fiscal 2019, we consolidated our Matthews, North Carolina store support center with our store support center in Chesapeake, Virginia. Corporate, support and Other also includes the results of operations for our Summit Pointe property in Chesapeake, Virginia.

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Information for our segments, as well as for Corporate, support and Other, including the reconciliation to Income before income taxes, is as follows:
 13 Weeks Ended39 Weeks Ended
 October 30,October 31,October 30,October 31,
(in millions)2021202020212020
Condensed Consolidated Income Statement Data:
Net sales:
Dollar Tree$3,417.4 $3,303.2 $10,003.0 $9,557.6 
Family Dollar2,998.0 2,873.5 9,229.4 9,183.5 
Consolidated Net sales$6,415.4 $6,176.7 $19,232.4 $18,741.1 
Gross profit:
Dollar Tree$1,031.1 $1,154.2 $3,207.1 $3,206.8 
Family Dollar732.6 769.9 2,381.7 2,428.4 
Consolidated Gross profit$1,763.7 $1,924.1 $5,588.8 $5,635.2 
Operating income (loss):
Dollar Tree$290.5 $417.9 $1,019.2 $1,006.5 
Family Dollar88.6 131.4 456.3 472.0 
Corporate, support and Other(68.6)(83.8)(242.9)(272.2)
Consolidated Operating income310.5 465.5 1,232.6 1,206.3 
Interest expense, net33.4 38.1 99.4 113.1 
Other expense, net0.2 0.1 0.2 0.8 
Income before income taxes$276.9 $427.3 $1,133.0 $1,092.4 
 13 Weeks Ended 39 Weeks Ended As of
 October 31, November 2, October 31, November 2, October 30,January 30,October 31,
(in millions) 2020 2019 2020 2019(in millions)202120212020
Condensed Consolidated Income Statement Data:        
Net sales:        
Condensed Consolidated Balance Sheet Data:Condensed Consolidated Balance Sheet Data:
Goodwill:Goodwill:
Dollar TreeDollar Tree$425.8 $424.9 $423.6 
Family DollarFamily Dollar1,559.5 1,559.5 1,559.5 
Consolidated GoodwillConsolidated Goodwill$1,985.3 $1,984.4 $1,983.1 
Total assets:Total assets:
Dollar Tree $3,303.2
 $3,074.3
 $9,557.6
 $8,991.4
Dollar Tree$8,954.7 $8,669.3 $8,467.4 
Family Dollar 2,873.5
 2,671.9
 9,183.5
 8,304.1
Family Dollar11,869.8 11,562.2 11,703.0 
Corporate, support and Other 0.3
 0
 0.3
 0
Corporate, support and Other565.5 464.5 481.8 
Consolidated Net sales $6,177.0
 $5,746.2
 $18,741.4
 $17,295.5
        
Gross profit:        
Dollar Tree $1,154.2
 $1,050.5
 $3,206.8
 $3,070.8
Family Dollar 769.9
 654.0
 2,428.4
 2,009.4
Corporate, support and Other 0.3
 0
 0.3
 0
Consolidated Gross profit $1,924.4
 $1,704.5
 $5,635.5
 $5,080.2
        
Operating income (loss):        
Dollar Tree $417.9
 $374.6
 $1,006.5
 $1,105.9
Family Dollar 131.4
 55.2
 472.0
 163.9
Corporate, support and Other (83.8) (71.4) (272.2) (257.0)
Consolidated Operating income 465.5
 358.4
 1,206.3
 1,012.8
Interest expense, net 38.1
 41.4
 113.1
 122.9
Other expense, net 0.1
 0.1
 0.8
 0.7
Income before income taxes $427.3
 $316.9
 $1,092.4
 $889.2
Consolidated Total assetsConsolidated Total assets$21,390.0 $20,696.0 $20,652.2 

  As of
  October 31, February 1, November 2,
(in millions) 2020 2020 2019
Condensed Consolidated Balance Sheet Data:      
Goodwill:      
Dollar Tree $423.6
 $423.8
 $421.6
Family Dollar 1,559.5
 1,559.5
 1,874.9
Consolidated Goodwill $1,983.1
 $1,983.3
 $2,296.5
       
Total assets:      
Dollar Tree $8,467.4
 $7,694.0
 $7,531.0
Family Dollar 11,703.0
 11,484.9
 11,858.3
Corporate, support and Other 481.8
 395.7
 352.8
Consolidated Total assets $20,652.2
 $19,574.6
 $19,742.1
       

*Goodwill is reassigned between segments when previously acquired stores are re-bannered between segments. The goodwill related to previously acquired re-bannered stores in the 39 weeks ended October 31, 2020 was 0t material. In the 39 weeks ended November 2, 2019, we reassigned $45.2 million
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Table of goodwill from Family Dollar to Dollar Tree as a result of re-bannering.Contents
Disaggregated Revenue
The following table summarizes net sales by merchandise category for our segments:
 13 Weeks Ended39 Weeks Ended
 October 30,October 31,October 30,October 31,
(in millions)2021202020212020
Dollar Tree segment net sales by
    merchandise category:
Consumable$1,563.0 45.7 %$1,564.1 47.4 %$4,671.4 46.7 %$4,778.8 50.0 %
Variety1,596.3 46.7 %1,520.9 46.0 %4,961.5 49.6 %4,473.0 46.8 %
Seasonal258.1 7.6 %218.2 6.6 %370.1 3.7 %305.8 3.2 %
Total Dollar Tree segment net sales$3,417.4 100.0 %$3,303.2 100.0 %$10,003.0 100.0 %$9,557.6 100.0 %
Family Dollar segment net sales by
    merchandise category:
Consumable$2,359.4 78.7 %$2,255.7 78.5 %$7,065.3 76.6 %$7,077.5 77.1 %
Home products228.7 7.6 %240.1 8.3 %777.0 8.4 %802.7 8.7 %
Apparel and accessories178.3 6.0 %157.4 5.5 %592.4 6.4 %517.8 5.6 %
Seasonal and electronics231.6 7.7 %220.3 7.7 %794.7 8.6 %785.5 8.6 %
Total Family Dollar segment net sales$2,998.0 100.0 %$2,873.5 100.0 %$9,229.4 100.0 %$9,183.5 100.0 %
  13 Weeks Ended 39 Weeks Ended
  October 31, November 2, October 31, November 2,
(in millions) 2020 2019 2020 2019
Dollar Tree segment net sales by
    merchandise category:
                
Consumable $1,564.1
 47.4% $1,555.8
 50.6% $4,778.8
 50.0% $4,567.6
 50.8%
Variety 1,520.9
 46.0% 1,328.3
 43.2% 4,473.0
 46.8% 4,127.1
 45.9%
Seasonal 218.2
 6.6% 190.2
 6.2% 305.8
 3.2% 296.7
 3.3%
Total Dollar Tree segment net sales $3,303.2
 100.0% $3,074.3
 100.0% $9,557.6
 100.0% $8,991.4
 100.0%
                 
Family Dollar segment net sales by
    merchandise category:
                
Consumable $2,255.7
 78.5% $2,133.9
 79.9% $7,077.5
 77.1% $6,481.1
 78.0%
Home products 240.1
 8.3% 196.3
 7.3% 802.7
 8.7% 642.6
 7.7%
Apparel and accessories 157.4
 5.5% 144.0
 5.4% 517.8
 5.6% 494.3
 6.0%
Seasonal and electronics 220.3
 7.7% 197.7
 7.4% 785.5
 8.6% 686.1
 8.3%
Total Family Dollar segment net sales $2,873.5
 100.0% $2,671.9
 100.0% $9,183.5
 100.0% $8,304.1
 100.0%


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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Note Regarding Forward-Looking Statements: This document contains “forward-looking statements” as that term is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they address future events, developments and results and do not relate strictly to historical facts. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Forward-looking statements include, without limitation, statements preceded by, followed by or including words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “view,” “target” or “estimate,” “may,” “will,” “should,” “predict,” “possible,” “potential,” “continue,” “strategy,” and similar expressions. For example, our forward-looking statements include, without limitation, statements regarding:
•The impact of delays in receiving imported merchandise from Asia on our product availability, product mix, sales and merchandise margin;
•Our expectations regarding higher oceanic shipping and domestic freight and fuel costs, and our plans to manage those cost increases;
•The reliability of, and cost associated with, our sources of supply, particularly imported goods sourced from Asia and higher cost domestic goods;
•Our plans to address the labor shortages at our distribution centers and stores;
•Our expectations regarding increased expenses for higher wages and bonuses paid to associates, including increases in the minimum wage by States and localities and potential federal legislation increasing the minimum wage;
•The potential effect of general business or economic conditions on our business including the direct and indirect effects of the COVID-19 pandemic-related recession,pandemic, inflation, labor shortages, consumer spending levels, unemployment, and the cost of COVID-19 initiatives;
The uncertainty of the future impact of the COVID-19 pandemic and public health measures on our business and results of operations, including uncertainties surrounding possible disruptions in our supply chain or sources of supply, the physical and financial health of our customers, the effectiveness and duration of government assistance programs to individuals, households and businesses to support consumer spending, levelsand proposals to raise federal corporate tax rates;
•Our expectations regarding reductions in COVID-19-related expenses and the level of foot trafficshrink in ourfiscal 2021;
•Our plans to renovate existing Family Dollar stores and changesbuild new stores in customer demand forthe H2 store format, including an increase in the number of stores with adult beverages, and the performance of that format on our consumable and essential products as well as our discretionary products;results of operations;
•Our plans and expectations in responserelating to the COVID-19 pandemic, including increased expenses for higher wagesintroduction of additional price points above $1 in our Dollar Tree stores;
•Our plans and bonuses paidexpectations relating to associatesnew store openings and the costadoption, testing, implementation and performance of personal protective equipmentnew store concepts such as Dollar Tree Plus and additional cleaning suppliesour Combo Store format;
•Our expectations regarding higher commodity and protocols forother costs associated with the safetybuild-out of our associates,new stores and expectedthe renovation of existing stores, and construction, permitting and inspection delays inrelated to new store openings; and
Our costs could increase in the future. Certain states and local governments have passed laws to increase the minimum wage beginning in 2021 and it is likely that the federal government will consider whether to pass similar legislation next year;
•
Our plans relating to new store openings, the renovation of Family Dollar stores to the H2 format, and new store concepts such as Dollar Tree Plus!;
The expected and possible outcome, costs, and impact of pending or potential litigation, arbitrations, other legal proceedings or governmental actions, includinginvestigations (including the proceeding by the FDA;
The effect of our initiatives to renovate Family Dollar stores to the H2 store formatFood and the performance of that format and the roll-out of adult beverages at Family Dollar and Snack Zone and Crafter’s Square at Dollar Tree, on our results of operations;
Our seasonal sales patterns and customer demand including those relating to the important holiday selling seasons and party merchandise;
The impact of trade relations and the ongoing trade dispute between the United States and China, including the actual and potential effect of Section 301 tariffs on Chinese goods imposed by the United States Trade Representative, and other potential impediments to imports;
The reliability of, and cost associated with, our sources of supply, particularly imported goods such as those sourced from China and domestic goods which are in higher demand as a result of the COVID-19 pandemic; and
Our expectations regarding compliance with debt covenants and stock repurchases.Drug Administration).
A forward-looking statement is neither a prediction nor a guarantee of future results, events or circumstances. You should not place undue reliance on forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. Our forward-looking statements are all based on currently available operating, financial and business information. The outcome of the events described in these forward-looking statements is subject to a variety of factors, including, but not limited to, the risks and uncertainties summarized below and the more detailed discussions in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections and elsewhere in our Annual Report on Form 10-K for the fiscal year ended February 1, 2020,January 30, 2021, and in this Quarterly Report on Form 10-Q. The following risks could have a material adverse impact on our sales, costs, profitability, financial performance or implementation of strategic initiatives:
The continuing COVID-19 pandemic•We are experiencing disruptions in our supply chain, including shipping delays, port closings and related public health measures have caused economic disruptionscongestion, that have adversely affected,had and are expectedcould have an adverse impact on our product availability, product mix, sales and merchandise margin.
•Our profitability is vulnerable to continue to adversely affect, elementsincreases in oceanic shipping costs, domestic freight and fuel costs, higher wages, substitution of higher cost domestic goods and increases in other operating costs.
•The labor shortages at our distribution centers and stores has had and could have an adverse impact on the operating efficiency of our business. distribution centers and our ability to transport merchandise to and operate our stores, and could result in lower sales.
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•If the COVID-19 pandemic in North America or at our sources of supply overseas worsens and new, more restrictive public health measures are implemented,or continues longer than expected, there could be a material adverse impact on our business and results of operations.

•Inflation or other adverse change or downturn in economic conditions could adversely impact our sales or profitability.
•Our business and results of operations could be materially harmed if we experience a decline in consumer confidence and spending as a result of unfavorable economic conditions, or political uncertainties, for example because government stabilization effortsassistance to households and businesses terminate or are reduced prematurely.reduced.
Our profitability is vulnerable•We may not be successful in implementing or in anticipating the impact of important strategic initiatives, and our plans for implementing such initiatives may be altered or delayed due to cost increases such as wages. For example, this year we have incurred increased costs associated with responding to the COVID-19 pandemic; and this year and over the last several years we have incurred increased distribution costs. Next year the minimum wage will increase in certain States and localities and may increase nationally depending on the outcomevarious factors, including lack of future legislation proposed in Congress.
Our profitability is affected by the mix of products we sell. For example, in the first quarter of this fiscal year, sales of higher margin Easter merchandise at the Dollar Tree segment suffered as a result of the COVID-19 crisis, and profitability in the Dollar Tree segment was materially adversely affected.
We could continue to encounter higher costs andcustomer acceptance, shipping delays, supply chain disruptions in our distribution network. COVID-19 and other factors that could affect the timeliness, cost or availability of adequate levels of necessary domestic and imported merchandise, which may have slowed the flow of importedan adverse impact on our business and financial results.
•Duties, tariffs or other merchandise andrestrictions on trade could impactadversely affect our profitability if product flow is not improved.financial performance.
•Our financial performance could be adversely affected if our supply chain is affected ormay be disrupted by changes in United States trade policy with China, including tariffs or restrictions on trade affecting our foreign suppliers, or by disruptions arising from the outbreak of the COVID-19 pandemic.China.
Our growth is dependent on our ability to increase sales in existing stores and to expand our square footage profitably.
•We rely on computer and technology systems in our operations, and any material failure, inadequacy, interruption or security failure of those systems including because of a cyber-attack could harm our ability to effectively operate and grow our business and could adversely affect our financial results.
If we suffer a data breach•The potential unauthorized access to customer information may violate privacy laws and are unable to protect our customers’ credit card and confidential information, or other private data relating to our associates, suppliers or our business, we could be subject to negative publicity, costly government enforcement actions or private litigation and increased costs, which could damage our business reputation, subject us to negative publicity, litigation and costs, and adversely affect our results of operations or business.
We could incur losses due to impairment of long-lived assets, goodwill and intangible assets.
•Litigation, arbitration and regulatory actionsgovernment proceedings may adversely affect our business, financial condition and results of operations.
The terms•Changes in laws and government regulations, including any increase in federal corporate tax rates, or our failure to adequately estimate the impact of the agreements governingsuch changes, could increase our indebtedness may restrict our current and future operations, particularly our abilityexpenses, expose us to respond to changeslegal risks or to pursue our business strategies, and couldotherwise adversely affect our capital resources, financial condition and liquidity.us.
We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements. Moreover, new risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on our forward-looking statements.
We do not undertake to publicly update or revise any forward-looking statements after the date of this Form 10-Q, whether as a result of new information, future events, or otherwise.
Investors should also be aware that while we do, from time to time, communicate with securities analysts and others, it is against our policy to disclose to them any material, nonpublic information or other confidential commercial information. Accordingly, shareholders should not assume that we agree with any statement or report issued by any securities analyst regardless of the content of the statement or report. Furthermore, we have a policy against confirming projections, forecasts or opinions issued by others. Thus, to the extent that reports issued by securities analysts contain any projections, forecasts or opinions, such reports are not our responsibility.
The Impact of COVID-19
The COVID-19 pandemic has affected, and likely will continue to affect, our financial condition and results of operations for the foreseeable future. As you review the Management’s Discussion and Analysis of Financial Condition and Results of Operations, please keep in mind the following.
As an essential business, our stores and distribution centers have remained open during the pandemic; however, our business trends and financial results arein 2020 were materially different than whatin prior years. During March 2020, our Dollar Tree and Family Dollar stores began to experience a significant increase in customer demand and sales of essential products and comparable store net sales increased significantly. However, beginning the last week of March 2020 and continuing into April during the peak of the 2020 Easter selling season, comparable store net sales at our Dollar Tree stores decreased. After the 2020 Easter selling season, in both banners, we expected. We have experienced fewer customer visits and higher average ticket. The mix and profit margin of products being purchased by our customers has been different and has changed during 2020. Asan increase in demand for essential

goods, including cleaning supplies and sanitizer, householdsales of discretionary products paper goods, food and over-the-counter medicine, increased to unprecedented levels, both our domestic suppliers and distribution centers were stressed to keep up with the demand. We expect this disruption with certain vendors and SKUs to continueseasonal business for the remainderother holidays throughout 2020 was strong. Easter sales were strong in both banners during 2021. Our results of the year. The effect of COVID-19-related stimulus purchases for some other non-essential items may create additional disruptions.
We have hired more than 34,000 net new associates since early March and we have implemented several changes to support our associates in adhering to Centers for Disease Control and Prevention (CDC) recommendations. We have:
Activated our Business Response Team to communicate, assess and address potential exposure throughout the organization;
Provided personal protective equipment including masks, gloves and sanitizers for our store and distribution center associates;
Deployed plexiglass sneeze guards for all registers at all stores;
Deployed hand sanitizer stands in each of our stores;
Equipped stores, distribution centers and the store support center with necessary supplies for enhanced cleaning protocol;
Provided wage premiums for all store and distribution center hourly associates, excluding hourly-paid store managers;
Provided minimum guaranteed sales bonuses for each store manager as well as Thank You bonuses and bonuses for certain salaried associates in our field operations and distribution centers;
Provided pay continuation for associates who test positive or who are Group 1 associates who have to self-quarantine;
Created a “store” within each distribution center to allow our associates to shop for needed supplies at work when supplies were scarce in retail locations;
Eliminated all non-essential air travel;
Utilized technology options for all large group meetings;
Prohibited external visitors’ access tothrough the store support center;
Enabled the majority of our store support center teams to work remotely;
Enabled contactless payments to our POS systems for our customers;
Followed local municipality, county, and state guidelines and regulations needed to be open as an essential business;
Encouraged safe social distancing protocols for our customers with signing, graphics and communications;
Enabled health prescreening questionnaire for all store and distribution associates before entering work; and
Established temperature check protocols for our associates at all distribution centers and the store support center.
We also made changes to reduce our exposure to potential short-term liquidity risk in the banking system, including preemptively drawing $750 million under our Revolving Credit Facility, and suspending share repurchases under the remaining Board authorization. Based on our second and third quarter cash flow as well as our projected cash flow and the outlook for liquidity in the banking system for the balance of fiscal 2020 include approximately $254.3 million of COVID-19-related expenses; these expenses totaled $22.1 million through the $750 million was repaid priorthird quarter of fiscal 2021.
The future impact of COVID-19 on our customers and our business is difficult to October 31, 2020predict. The course of the pandemic, including the spread of the Delta variant, the effectiveness of health measures such as vaccines, and we restarted share repurchasesthe impact of ongoing economic stabilization efforts is uncertain and government assistance payments may not provide enough funding to support future consumer
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spending at levels experienced during the third quarter. We are in compliance with our debt covenants and, based on a continuation of current operating results, we expect to be in compliance for the remainderfirst nine months of fiscal 2020.
2021. For example, although the American Rescue Plan Act of 2021 (“Rescue Act”), which was enacted on March 11, 2021, provided U.S. government funding to address the continuing impact of COVID-19 on the economy, public health, individuals and businesses, some of the enacted benefits, including $1,400 direct payments to individuals and supplemental unemployment benefits, were temporary and have been discontinued. Given the level of volatility and uncertainty surrounding the future impact of COVID-19 on our customers, suppliers and the broader economies in the locations that we operate as well as uncertainty around the future impact on our supply chain and the global supply chain, it is challenging to predict our future operations and financial results. Following is a
For further discussion of the impacts that we have seen and the factors which could influence our future performance.
Sales
During March, our Dollar Tree and Family Dollar stores began to experience a significant increase in customer demand and sales related to essential products and comparable store net sales increased significantly. However, beginning the last week of March and continuing into April during the peak of the Easter selling season, comparable store net sales at our Dollar Tree stores decreased. Beginning in mid-April, comparable store net sales at our Dollar Tree stores increased as the comparable Easter period from 2019COVID-19 had passed. In the 13 weeks ended May 2, 2020, enterprise comparable store net sales increased 7.0% resulting from an increase in average ticket of 15.5%, partially offset by a decrease in traffic of 7.4%. In the 13 weeks ended August 1, 2020, enterprise comparable store net sales increased 7.2% resulting from an increase in average ticket of 24.7%, partially offset by a decrease in traffic of 14.0%. In the 13 weeks ended October 31, 2020, enterprise comparable store net sales increased 5.1% resulting from an increase in average ticket of 20.1% partially offset by a decrease in traffic of 12.5%.
The future impact of COVID-19 on our customers is difficult to predict as the effectiveness of economic stabilization efforts is uncertainfinancial condition and government assistance payments may not provide enough funding to support current spending and the incremental unemployment benefits lapsed on July 31, 2020. It is uncertain whether additional government assistance or unemployment benefits and

other economic assistance to individuals, states, and localities will be authorized by governments or the timing and amount of such benefits. In addition, we cannot predict the impact of the spread of COVID-19 on the health and well-being of our customers and associates.
The demand for essential supplies has increased and we are dependent on our suppliers to replenish the goods in our stores. Disruptions in our supply chain or sources of supply could adversely impact our sales.
Gross Profit
As noted, in the 13 weeks ended May 2, 2020, the demand for essential products, which typically sell at a lower margin than our discretionary products, increased significantly. In addition, Easter sales in our Dollar Tree segment were materially lower than expected resulting in higher merchandise cost, including freight, and higher markdowns to clear the unsold Easter product. During April, demand for discretionary products increased in both segments.
During the 13 weeks ended August 1, 2020, the higher demand for discretionary products continued in both our Dollar Tree and Family Dollar segments resulting in a reduction in our merchandise cost compared with the same period in 2019. The favorable mix change continued into the third quarter of 2020; however, the benefit was not as high on the Family Dollar segment as we experienced during the second quarter of 2020. Sales of Dollar Tree’s discretionary goods typically peak in the fourth quarter. Should sales volumes be lower than planned, our gross profit in the Dollar Tree segment would be negatively impacted as it was with Easter merchandise in the first quarter.
Our distribution costs included $6.4 million, $11.4 million and $10.9 million in the 13 weeks ended May 2, 2020, August 1, 2020, and October 31, 2020, respectively, of incremental wage premiums in recognition of the team’s extraordinary efforts. We expect the incremental wage premium payments to continue for at least the first nine weeks of the fourth quarter of 2020.
During the COVID-19 pandemic, the trade dispute between the United States and China is ongoing and should additional tariffs or other sanctions be imposed on imported goods, our business or results of operations induring fiscal 2020, could be adversely affected.
Selling, Generalrefer to “Item 7. Management’s Discussion and Administrative Expenses
We paid incremental wage premiums toAnalysis of Financial Condition and Results of Operations” of our hourly store associates, minimum guaranteed bonuses and a Thank You bonus to our store managers and other bonuses to certain field operations managers totaling $57.5 million, $114.6 million and $28.9 million in the 13 weeks ended May 2, 2020, August 1, 2020, and October 31, 2020, respectively. The incremental wage premium payments were reduced from $2 per hour to $1 per hour beginning in the third quarter of 2020 and continuedAnnual Report on Form 10-K for the first eight weeks of the third quarter.
In addition, for the safety of our associates and customers, in the first quarter of 2020 we installed plexiglass sneeze guards at all registers in our stores and incurred incremental costs for masks, gloves and cleaning supplies. In the third quarter of 2020, we installed hand sanitizer stands in all of our stores. These expenses totaled $9.1 million, $8.1 million and $6.3 million in the 13 weeksyear ended May 2, 2020, August 1, 2020, and October 31, 2020, respectively.
Store Openings and Initiatives
During the first three quarters of fiscal 2020, we opened 262 new Dollar Tree stores and 111 new Family Dollar stores; however, we have experienced construction-related delays due to challenges with the permitting process which has resulted in delays in our planned store openings. We now plan to open 325 Dollar Tree stores and 155 Family Dollar stores in fiscal 2020.
As a result of the complications inherent in operating our stores during the COVID-19 pandemic, during the first quarter of 2020, we paused the roll-out of our Snack Zone layout to our Dollar Tree stores. We resumed the installation of our Snack Zone layout to Dollar Tree stores during the second quarter of 2020 and we completed the installation of this assortment in approximately 300 Dollar Tree stores in fiscal 2020.
With the increase in customer activity in our Family Dollar stores and COVID-19-related travel restrictions, we paused the roll-out of our H2 stores during the first quarter of 2020, but resumed the roll-out of the H2 format to Family Dollar stores during the second quarter of 2020. We expect to renovate approximately 750 stores to this format in fiscal 2020. Also, as a result of permitting delays, we now expect to add adult beverage product to approximately 600 stores in fiscal 2020.January 30, 2021.
Overview
We are a leading operator of more than 15,60015,900 retail discount stores and we conduct our operations in two reporting segments. Our Dollar Tree segment is the leading operator of discount variety stores offering merchandise predominantly at the fixed price point of $1.00. Our Family Dollar segment operates general merchandise retail discount stores providing consumers with a selection of competitively-priced merchandise in convenient neighborhood stores.

Our net sales are derived from the sale of merchandise. Two major factors tend to affect our net sales trends. First is our success at opening new stores or adding new stores through mergers or acquisitions.stores. Second is the performance of stores once they are open. Sales vary at our existing stores from one year to the next. We refer to this as a change in comparable store net sales, because we 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 or remodeled during the period in the calculation of comparable store net sales, which has the effect of increasing our comparable store net sales. The term ‘expanded’ also includes stores that are relocated. Stores that have been re-bannered 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 new brand.
At October 31, 2020,30, 2021, we operated stores in 48 states and the District of Columbia, as well as stores in five Canadian provinces. A breakdown of store counts and square footage by segment for the 39 weeks ended October 30, 2021 and October 31, 2020 and November 2, 2019 is as follows:
39 Weeks Ended39 Weeks Ended
October 31, 2020 November 2, 2019October 30, 2021October 31, 2020
Dollar Tree Family Dollar Total Dollar Tree Family Dollar TotalDollar TreeFamily DollarTotalDollar TreeFamily DollarTotal
Store Count:           Store Count:
Beginning7,505
 7,783
 15,288
 7,001
 8,236
 15,237
Beginning7,805 7,880 15,685 7,505 7,783 15,288 
New stores262
 111
 373
 286
 120
 406
New stores214 148 362 262 111 373 
Re-bannered stores(3) 4
 1
 190
 (199) (9)Re-bannered stores(1)(1)(2)(3)4 1 
Closings(23) (33) (56) (30) (342) (372)Closings(34)(45)(79)(23)(33)(56)
Ending7,741
 7,865
 15,606
 7,447
 7,815
 15,262
Ending7,984 7,982 15,966 7,741 7,865 15,606 
Relocations46
 31
 77
 35
 10
 45
Relocations45 55 100 46 31 77 
           
Selling Square Feet (in millions):Selling Square Feet (in millions):          Selling Square Feet (in millions):
Beginning64.6
 56.7
 121.3
 60.3
 59.8
 120.1
Beginning67.4 57.7 125.1 64.6 56.7 121.3 
New stores2.3
 0.9
 3.2
 2.5
 0.9
 3.4
New stores1.9 1.3 3.2 2.3 0.9 3.2 
Re-bannered stores(0.1) 0.1
 —
 1.4
 (1.4) —
Re-bannered stores— — — (0.1)0.1 — 
Closings(0.2) (0.2) (0.4) (0.2) (2.4) (2.6)Closings(0.3)(0.3)(0.6)(0.2)(0.2)(0.4)
Relocations0.1
 0.1
 0.2
 0.1
 —
 0.1
Relocations0.1 0.1 0.2 0.1 0.1 0.2 
Ending66.7
 57.6
 124.3
 64.1
 56.9
 121.0
Ending69.1 58.8 127.9 66.7 57.6 124.3 
Stores are included as re-banners when they close or open, respectively. Comparable store net sales for Dollar Tree may be negatively affected when a Family Dollar store is re-bannered near an existing Dollar Tree store.
The average size of stores opened during the 39 weeks ended October 31, 202030, 2021 was approximately 8,6708,760 selling square feet for the Dollar Tree segment and 8,4308,960 selling square feet for the Family Dollar segment. We believe that these size stores are in the
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ranges of our optimal sizes operationally and give our customers a shopping environment which invites them to shop longer, buy more and make return visits.
The percentage change in comparable store net sales on a constant currency basis for the 13 and 39 weeks ended October 31, 2020,30, 2021, as compared with the preceding year, is as follows:
 13 Weeks Ended October 31, 2020 39 Weeks Ended October 31, 202013 Weeks Ended October 30, 202139 Weeks Ended October 30, 2021
 Sales Growth 
Change in
Customer Traffic
 
Change in
Average Ticket
 Sales Growth 
Change in
Customer Traffic
 
Change in
Average Ticket
Sales GrowthChange in
Customer Traffic		Change in
Average Ticket		Sales GrowthChange in
Customer Traffic		Change in
Average Ticket
Consolidated 5.1% (12.5)% 20.1% 6.5% (11.3)% 20.1%Consolidated1.6 %(1.8)%3.5 %0.4 %(3.6)%4.1 %
Dollar Tree Segment 4.0% (12.6)% 19.0% 2.1% (13.4)% 17.9%Dollar Tree Segment0.6 %(1.1)%1.8 %1.7 %(1.4)%3.1 %
Family Dollar Segment 6.4% (12.3)% 21.3% 11.2% (8.4)% 21.4%Family Dollar Segment2.7 %(3.0)%5.8 %(0.8)%(6.5)%6.1 %
Constant currency basis refers to the calculation excluding the impact of currency exchange rate fluctuations. We calculated the constant currency basis change by translating the current year’s comparable store net sales in Canada using the prior year’s currency exchange rates. We believe that the constant currency basis provides a more accurate measure of comparable store net sales performance.

Comparable store net sales are positively affected by our expanded and relocated stores, which we include in the calculation, and are negatively affected when we open new stores, re-banner stores or expand stores near existing stores.
Dollar Tree Initiatives
Following the announcement of our new pricing initiative in September 2021, we increased the price point on a majority of our $1 merchandise to $1.25 in more than 100 legacy Dollar Tree stores by October 30, 2021. We have continued the rollout in November to additional stores and plan to expand the $1.25 price point initiative to more than 2,000 additional Dollar Tree stores in December 2021, and expect to complete the rollout of this initiative to all Dollar Tree stores by the end of the first quarter of fiscal 2022. We believe comparable store net sales continuethat the new pricing strategy will enable us to be positively affected byintroduce new products and expand our merchandise assortment in Dollar Tree stores while maintaining great value for our customers.
We are also continuing to implement our Dollar Tree initiatives.Plus initiative which introduces products priced at the $3 and $5 price points and provides our customers with extraordinary value in discretionary categories. As of October 30, 2021, we have approximately 460 Dollar Tree Plus stores and expect to have nearly 600 stores by the end of fiscal 2021, exceeding our previous target of 500 stores. We continuedalso plan to accelerate the implementation of the Dollar Tree Plus initiative in fiscal 2022 by adding the concept to an additional 1,500 stores.
The roll-out of frozen and refrigerated merchandiseour Crafter’s Square initiative to moreall of our Dollar Tree stores was completed during fiscal 2020. The Crafter’s Square assortment carries mark-ups which are higher than our average mark-up.
After a successful launch of the Instacart platform in the Family Dollar segment, we began testing the online service delivery at Dollar Tree stores in the third quarter of 2020 and as of October 31, 2020, the Dollar Tree segment had frozen and refrigerated merchandise in approximately 6,365 stores compared to approximately 6,100 stores at November 2, 2019. Beginning in fiscal 2018, we rolled out a new layout to a number of our Dollar Tree stores, which we call our Snack Zone. This layout highlights our immediate consumption snack offerings in the front of the store near the checkout areas.2021. As of October 31, 2020, we have Snack Zone in 2,66030, 2021, the Instacart platform covers almost 7,000 Dollar Tree stores. In fiscal 2019, we introducedThis enables our Crafter’s Square initiative in more than 650 stores. This section includescustomers to shop online and receive same-day delivery without having to visit a new expanded assortment of arts and crafts supplies. store.
We have begun expanding this program and have rolled it out to more than 3,130 stores as of October 31, 2020. We plan to add Crafter’s Square to the remainder ofbelieve that our Dollar Tree stores in early 2021.
Additionally, for more than a year, we have tested a multi-price initiative referred to as Dollar Tree Plus! Beginning in fiscal 2019, we began testing multi-price assortments in more than 100 stores in southwestern markets. Using the results of the test, we have made modifications to: the mix of products offered to include primarily discretionary items; the displays and signage to drive awareness and excitement in the stores; the price points to focus on the $1, $3 and $5 price points; and increase the offerings above the $1 price point. We plan to expand this initiative into a total of 500 stores beginning in the Spring of 2021.
We believe these initiatives have and will continue to enable us to increasepositively affect our comparable store net sales and earnings.
Family Dollar Initiatives
In fiscal 2019, we executed a store optimization program forWe are executing several initiatives in our Family Dollar stores to improve performance. Included in that program was a roll-outincrease sales. In March 2021, we announced the development of a new modelcombination store format, which we refer to as a Combo Store, that leverages the strengths of the Dollar Tree and Family Dollar brands under one roof. We have taken Family Dollar’s great value and assortment and blended in select Dollar Tree merchandise categories to create a new store format targeted for bothsmall towns and rural communities. The Combo store provides another way to introduce the multi-price assortment to Dollar Tree customers and the one-dollar assortment to Family Dollar customers. As of October 30, 2021, we had 155 Combo Stores in operation. Due to the success of the initiative, we plan to accelerate expansion of the program in fiscal 2022, and anticipate adding 400 new, renovated, or relocated Combo Stores in fiscal 2022.
After a successful pilot program in 2020, we entered into a partnership with Instacart, an online merchandise delivery platform, in February 2021 that enables our Family Dollar customers to shop online and renovatedreceive same-day delivery of merchandise without having to visit a store. The Instacart platform covers approximately 6,000 Family Dollar stores internally known as H2. Thisacross the United States.
We are also continuing to execute our store optimization programs. Our H2 model hasstores have significantly improved merchandise offerings throughout the store, including the addition of approximately 20 Dollar Tree $1.00 merchandise sections and establishing a minimum number of freezer and cooler doors, throughout the store. H2doors. These stores have higher customer traffic and provide ana higher average comparable store net sales lift, in excess of 10%when compared to non-renovated stores, in the first year following renovation. H2 stores perform well in a variety
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of locations and especially in locations where our Family Dollar stores have been most challenged in the past. As of October 31, 2020,30, 2021, we have approximately 2,2403,750 H2 stores. We plan to renovate approximately 750have renovated more than 1,250 stores to the H2this format in fiscal 20202021 and an additional 1,250have also built new stores in this format. In addition, we plan to add adult beverage to 185 stores in fiscal 2021. In addition, we installed adult beverage product in approximately 470 stores through the third quarter of 2020 and plan to add it to approximately 150 more stores in 2020. We believe the addition of adult beverage to our assortment will drive traffic to our stores.
Other ItemsAdditional Considerations
The following trends or uncertainties have already impacted or could impact our business or results of operations during 2021 or in the future:
•Shipping Delays. We rely heavily on Trans-Pacific shipping to acquire merchandise for our stores, and we are experiencing significant shipping delays as a result of the shipping capacity shortage which have negatively impacted our sales and the availability of product in the stores. We are also experiencing issues with port congestion and pandemic-related port closings and ship diversions. If the shipping delays do not improve they would continue to have a material adverse impact on product availability and product mix, and on our sales and merchandise margin. Sales could be negatively impacted if imported goods do not arrive in time to stock our stores, including the timely delivery of adequate levels of seasonal merchandise for the important Christmas holidays. If higher cost domestic goods are substituted for delayed imports, our merchandise margin could be adversely impacted. To address delays in shipments, we are prioritizing product categories for shipment in an effort to obtain seasonal assortments in advance of holiday seasons, adding and evaluating the use of long-term and short-term chartered vessels, and adding alternative sources of supply from North American factories.
•Freight Costs. We are experiencing significantly higher international and domestic freight costs as a result of disruptions in the global supply chain. This trend is likely to continue. The combination of increased demand and limited availability of Trans-Pacific shipping capacity has caused spot market prices to increase substantially. We are a large importer of merchandise from Asia and particularly sensitive to freight costs. Freight costs for fiscal 2021 are now expected to be $2.00 per diluted share higher than fiscal year 2020. We are working to reduce our freight costs by using chartered vessels, evaluating and securing long-term contracts with our carriers for vessels dedicated in large part to our needs, and adding alternative sources of supply that do not rely on Trans-Pacific shipping.
•Labor Shortage. We are experiencing a shortage of associates and applicants to fill staffing requirements at our distribution centers and stores due to the current labor shortage affecting businesses. This has adversely affected the operating efficiency of our distribution centers and our ability to transport merchandise from our distribution centers to our stores. The steps we have taken to address the labor shortage at our distribution centers include hosting national hiring events, paying sign-on bonuses, offering enhanced wages in select competitive markets and paying tuition reimbursement.
•Minimum Wage Increases.In 2021, the minimum wage will increasehas increased in certain States and localities and we expect additional minimum wage increases by States and localities in 2022. In addition, the federal minimum wage may increase nationally depending on the outcome of future legislation proposed in Congress. The currently scheduled minimumMinimum wage increases in States and localities are estimatedexpected to increase store payrollour costs by $45.0 million to $50.0 million in 2021.
•Build-out and Construction Costs and Delays. We have experienced higher commodity and other costs associated with the build-out of new stores and the renovation of existing stores. In addition, we have experienced delays in new store openings due to inspection, permitting and contractor delays. We anticipate these increased costs and delays may continue for the foreseeable future.
•COVID-19 Costs. The amount of COVID-19-related costs for premium pay including bonuses, supplies, protective equipment, and similar items was $279.0 million in fiscal 2020. We expect these costs to be approximately $30.0 million in fiscal 2021.
•Shrink Costs. We expect shrink at cost as a percentage of net sales to be significantly lower in fiscal 2021 which is less than fiscal 2020.
For additional information regarding the COVID-19-related payroll increasesrisks related to our business and operations, including risks relating to the implementation of our Dollar Tree and Family Dollar initiatives, see Item 1A. Risk Factors in 2020. Minimum wage increases could impact our results of operations in the future.this Form 10-Q.
Results of Operations
Our results of operations as a percentage of net sales and period-over-period changes are discussed in the following section. Note that 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.

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Table of Contents
Net Sales
 13 Weeks Ended   39 Weeks Ended  13 Weeks Ended39 Weeks Ended
 October 31, November 2, 
Percentage
Change
 October 31, November 2, 
Percentage
Change
October 30,October 31,Percentage
Change		October 30,October 31,Percentage
Change
(dollars in millions) 2020 2019 2020 2019 (dollars in millions)2021202020212020
Net sales $6,177.0
 $5,746.2
 7.5% $18,741.4
 $17,295.5
 8.4%Net sales$6,415.4 $6,176.7 3.9 %$19,232.4 $18,741.1 2.6 %
Comparable store net sales change,
on a constant currency basis
 5.1% 2.5%   6.5% 2.4%  Comparable store net sales change,
on a constant currency basis		1.6 %5.1 %0.4 %6.5 %
The increase in net sales in the 13 weeks ended October 31, 202030, 2021 was a result of sales of $177.5 million at new stores, and comparable store net sales increases in both the Family Dollar and Dollar Tree segments and sales of $194.3 million at new stores.

segments.
Enterprise comparable store net sales increased 5.1%1.6% on a constant currency basis in the 13 weeks ended October 31, 2020,30, 2021, as a result of a 20.1%3.5% increase in average ticket, andpartially offset by a 12.5%1.8% decrease in customer traffic. Comparable store net sales increased the same 5.1%1.6% when including the impact of Canadian currency fluctuations. On a constant currency basis, comparable store net sales increased 6.4%2.7% in the Family Dollar segment and 4.0%0.6% in the Dollar Tree segment. Comparable store net sales are positively affected by our expanded and relocated stores, which we include in the calculation, and are negatively affected when we open new stores, re-banner stores or expand stores near existing stores.
The increase in net sales in the 39 weeks ended October 31, 202030, 2021 was a result of sales of $514.9 million at new stores and a comparable store net sales increasesincrease in the Dollar Tree segment, partially offset by a comparable store net sales decrease in the Family Dollar and Dollar Tree segments and sales of $641.3 million at new stores. These sales increases were partially offset by lost sales resulting from store closures during fiscal 2019 in connection with our Family Dollar segment store optimization program.segment.
Enterprise comparable store net sales increased 6.5%0.4% on a constant currency basis in the 39 weeks ended October 31, 2020,30, 2021, as a result of a 20.1%4.1% increase in average ticket, andpartially offset by a 11.3%3.6% decrease in customer traffic. Comparable store net sales increased 6.4%0.5% when including the impact of Canadian currency fluctuations. On a constant currency basis, comparable store net sales increased 11.2%1.7% in the Dollar Tree segment and decreased 0.8% in the Family Dollar segment. In the same period last year, the Family Dollar segment andhad a comparable store net sales increase of 11.2% as we saw an increase in demand for essential products in the early stages of the COVID-19 pandemic. The Dollar Tree segment had a comparable store net sales increase of 2.1% in the Dollar Tree segment. Lowersame period last year, as the higher average ticket was partially offset by lower traffic resulting from the COVID-19 pandemic which negatively affected Easter sales in the Dollar Tree segment in the first quarter of fiscal 2020.sales.
Gross Profit
 13 Weeks Ended   39 Weeks Ended  13 Weeks Ended39 Weeks Ended
 October 31, November 2, 
Percentage
Change
 October 31, November 2, 
Percentage
Change
October 30,October 31,Percentage
Change		October 30,October 31,Percentage
Change
(dollars in millions) 2020 2019 2020 2019 (dollars in millions)2021202020212020
Gross profit $1,924.4
 $1,704.5
 12.9% $5,635.5
 $5,080.2
 10.9%Gross profit$1,763.7 $1,924.1 (8.3)%$5,588.8 $5,635.2 (0.8)%
Gross profit margin 31.2% 29.7% 1.5% 30.1% 29.4% 0.7%Gross profit margin27.5 %31.2 %(3.7)%29.1 %30.1 %(1.0)%
The increasedecrease in gross profit margin in the 13 weeks ended October 31, 202030, 2021 was a result of the net of the following:
•Merchandise cost, including freight, decreased 80increased 360 basis points resulting primarily from higher freight costs on both segments partially offset by higher sales of higher margin discretionary merchandise improved initial mark-onon the Dollar Tree segment.
•Distribution costs increased 15 basis points resulting from higher distribution center payroll costs, resulting primarily from hourly wage increases on both segments, and higher depreciation costs on the Dollar Tree segment resulting from the two new distribution centers, partially offset by lower COVID-19-related costs. The 13 weeks ended October 30, 2021 and October 31, 2020 included COVID-19 costs of approximately $2.8 million and $10.9 million, respectively. The prior year amount included a per hour premium for all hourly associates.
•Occupancy costs increased 10 basis points primarily due to the loss of leverage from the low comparable store net sales increase for the quarter and higher real estate tax expenses.
•Markdown costs increased 10 basis points primarily due to higher clearance markdowns on the Family Dollar segment and lower freight costs.higher dated product markdowns on the Dollar Tree segment.
Occupancy costs decreased 35 basis points as a result of the leverage from the increase in comparable store net sales.
•Shrink costs decreased 3530 basis points resulting primarily from favorable inventory reconciliations onresults in relation to accruals and decreases in the shrink accrual rates in both the Family Dollar segmentand Dollar Tree segments in the current quarter.
Markdown costs decreased 25 basis points resulting primarily from lower promotional activity in the current year on the Family Dollar segment as a result
21
Table of the increase in sales and lower seasonal markdowns in both segments resulting from the higher Halloween sell-through in the current quarter. Partially offsetting this decrease was increased uninsured markdown costs for natural disasters.Contents
Distribution costs increased 30 basis points resulting primarily from higher distribution center payroll and depreciation costs. We paid our hourly distribution center associates a premium for all hours worked during the 13 weeks ended October 31, 2020. Total distribution center COVID-19-related expenses were $10.9 million, or 20 basis points of this increase.
The increasedecrease in gross profit margin in the 39 weeks ended October 31, 202030, 2021 was a result of the net of the following:
Occupancy costs decreased 45 basis points as a result of the leverage from the increase in comparable store net sales.
•Merchandise cost, including freight, decreased 30increased 140 basis points in the 39 weeks ended October 31, 2020 compared to the same period last year resulting from higher freight costs on both segments, partially offset by higher sales of higher margin discretionary merchandise, including higher Easter sales in both segments and improved initial mark-on and lower freightin both segments.
•Occupancy costs partiallyincreased 10 basis points primarily due to the loss of leverage from the comparable store net sales decrease on the Family Dollar segment.
•Distribution costs were flat as a percentage of net sales compared to the prior year resulting from COVID-19 expenses in the prior year of $28.7 million, including COVID-19 premium pay of $2 per hour for all hourly associates for hours worked beginning March 8, 2020, offset by incremental tariffhourly wage increases at the distribution centers and higher depreciation costs of $34.7in the Dollar Tree segment resulting from the two new distribution centers. COVID-19-related costs for the 39 weeks ended October 30, 2021 were $6.1 million.
•Markdown costs decreased 155 basis points primarily due to lower seasonal markdowns in the Dollar Tree segment resulting primarily from the prior year including markdowns related to Family Dollar store closures and clearance sales as well as lower promotional activityimproved sell-through of Easter merchandise in the current year on the Family Dollar segment as a result of the increase in sales. This decrease was partially offset byand $10.4 million of uninsured markdown costs for stores affected by civil unrest and higher seasonal markdowns in the prior year, partially offset by higher clearance markdowns on the Family Dollar Tree segment in the first quarter 2020 due to the lower than planned sell-through on Easter merchandise as a result of the COVID-19 pandemic.segment.
•Shrink costs decreased 1545 basis points resulting from favorable inventory reconciliations onresults in relation to accruals and decreases in the shrink accrual rates in both the Family Dollar segmentand Dollar Tree segments in the current year, partially offset by unfavorable inventory reconciliations on the Dollar Tree segment.

Distribution costs increased 35 basis points resulting primarily from higher distribution center payroll and depreciation costs. We paid our hourly distribution center associates a per hour premium for all hours worked since March 8, 2020. Total distribution center COVID-19-related expenses were $28.7 million, or 15 basis points of this increase.year.
Selling, General and Administrative Expenses
  13 Weeks Ended   39 Weeks Ended  
  October 31, November 2, 
Percentage
Change
 October 31, November 2, 
Percentage
Change
(dollars in millions) 2020 2019  2020 2019 
Selling, general and administrative
expenses		 $1,458.9
 $1,346.1
 8.4% $4,429.2
 $4,067.4
 8.9%
As a percentage of Net sales 23.7% 23.5% 0.2% 23.7% 23.5% 0.2%
13 Weeks Ended39 Weeks Ended
October 30,October 31,Percentage
Change		October 30,October 31,Percentage
Change
(dollars in millions)2021202020212020
Selling, general and administrative
   expenses		$1,455.5 $1,458.9 (0.2)%$4,364.4 $4,429.2 (1.5)%
Selling, general and administrative
   expense rate		22.7 %23.7 %(1.0)%22.7 %23.7 %(1.0)%
The increasedecrease in the selling, general and administrative expenses, as a percentage of net sales,expense rate in the 13 weeks ended October 31, 202030, 2021 was the result of the net of the following:
•Payroll expenses increased 70decreased 80 basis points primarily due to incremental costs associated with the COVID-19 pandemic and an increase inlower incentive compensation stock compensationexpenses and lower COVID-19-related store payroll costs, and store sales bonuses resulting from the improved operating performance in the quarter. These increases were partially offset by leverage fromminimum wage increases in the comparablecurrent year. The 13 weeks ended October 30, 2021 and October 31, 2020 included $6.8 million and $28.9 million, respectively, of COVID-19-related payroll costs. The COVID-19 expenses in the current quarter were primarily for quarantine and sick pay as well as the related payroll taxes. In the prior year quarter, COVID-19-related payroll expenses included store net sales increase. Incremental payroll costs associated with the COVID-19 pandemic, includingfor a $1 per hour premium paid to all store hourly associates for all hours worked during the quarter through September 26, 2020, bonuses for certain field management associates, quarantine pay and sick pay as well as the related payroll taxes, totaled $28.9 million, or 45 basis points.taxes.
Other selling, general and administrative expenses decreased 25 basis points as a result of the leverage from the comparable store net sales increase, higher costs in the prior year related to the disposal of fixed assets in connection with the store optimization program on the Family Dollar segment, decreases in promotional advertising on the Family Dollar segment and in travel due to the COVID-19 pandemic. The 13 weeks ended October 31, 2020 included $6.3 million, or 10 basis points, of costs for masks, gloves and cleaning supplies due to the COVID-19 pandemic.
Store facility costs decreased 20 basis points due to leverage from the comparable store net sales increase and lower electricity costs.
The increase in selling, general and administrative expenses, as a percentage of net sales, in the 39 weeks ended October 31, 2020 was the result of the net of the following:
Payroll expenses increased 75 basis points primarily due to incremental costs associated with the COVID-19 pandemic and an increase in incentive compensation, stock compensation costs and store sales bonuses resulting from improved operating performance in the Family Dollar segment. These increases were partially offset by leverage from the comparable store net sales increase, lower benefits costs and lower temporary help expenses as a result of the prior year including higher expenses to support store-level initiatives. Office payroll costs also decreased resulting from the store support center consolidation in the prior year and other leadership changes made in the fourth quarter of fiscal 2019. Incremental payroll costs associated with the COVID-19 pandemic, including a per hour premium paid to all store hourly associates for all hours worked March 8, 2020 through September 26, 2020, bonuses for certain field management associates, guaranteed bonus payouts and Thank You bonuses for store managers, quarantine pay and sick pay as well as the related payroll taxes, totaled $201.0 million, or 105 basis points.
Other selling, general and administrative expenses decreased 35 basis points as a result of the leverage from the comparable store net sales increase, higher costs in the prior year related to the disposal of fixed assets in connection with the store optimization program on the Family Dollar segment, decreases in promotional advertising on the Family Dollar segment and in travel due to the COVID-19 pandemic and higher costs in the prior year for the store support center consolidation. These improvements were partially offset by an increase in insurance costs related to unfavorable development of general liability claims. The 39 weeks ended October 31, 2020 included $23.5 million, or 15 basis points, of costs for the installation of plexiglass sneeze guards at all registers in our stores and incremental costs for masks, gloves and cleaning supplies due to the COVID-19 pandemic, and $1.8 million of expenses, primarily for fixed asset disposals, related to stores damaged in civil unrest.
Store facility costs decreased 25 basis points due to leverage from the comparable store net sales increase and lower electricity costs. The 39 weeks ended October 31, 2020 included $3.9 million primarily for uninsured repairs related to stores damaged in civil unrest and $1.1 million of COVID-19-related expenses.

Operating Income
  13 Weeks Ended   39 Weeks Ended  
  October 31, November 2, 
Percentage
Change
 October 31, November 2, 
Percentage
Change
(dollars in millions) 2020 2019  2020 2019 
Operating income $465.5
 $358.4
 29.9% $1,206.3
 $1,012.8
 19.1%
Operating income margin 7.5% 6.2% 1.3% 6.4% 5.9% 0.5%
Operating income margin increased to 7.5% for the 13 weeks ended October 31, 2020 compared to 6.2% for the same period last year as operating income margin in the Family Dollar segment increased 250 basis points and the Dollar Tree segment increased 45 basis points. Operating income in the 13 weeks ended October 31, 2020 includes $46.3 million of COVID-19-related expenses.
Operating income margin increased to 6.4% for the 39 weeks ended October 31, 2020 compared to 5.9% for the same period last year as operating income margin in the Family Dollar segment increased 315 basis points, partially offset by a 175 basis point decrease in the Dollar Tree segment operating income margin. Operating income in the 39 weeks ended October 31, 2020 includes $254.3 million of COVID-19-related expenses and $17.6 million of uninsured expenses related to civil unrest.
Interest Expense, Net
  13 Weeks Ended   39 Weeks Ended  
  October 31, November 2, 
Percentage
Change
 October 31, November 2, 
Percentage
Change
(dollars in millions) 2020 2019  2020 2019 
Interest expense, net $38.1
 $41.4
 (8.0)% $113.1
 $122.9
 (8.0)%
Interest expense, net decreased $3.3 million in the 13 weeks ended October 31, 2020 compared to the same period last year, resulting from lower average debt outstanding in the current year quarter, partially offset by lower interest income.
Interest expense, net decreased $9.8 million in the 39 weeks ended October 31, 2020 compared to the same period last year, resulting from lower average debt outstanding in the current year, partially offset by lower interest income.
Provision for Income Taxes
  13 Weeks Ended   39 Weeks Ended  
  October 31, November 2, 
Percentage
Change
 October 31, November 2, 
Percentage
Change
(dollars in millions) 2020 2019  2020 2019 
Provision for income taxes $97.3
 $61.1
 59.2% $253.3
 $185.2
 36.8%
Effective tax rate 22.8% 19.3% 3.5% 23.2% 20.8% 2.4%
The effective tax rate for the 13 weeks ended October 31, 2020 was 22.8% compared to 19.3% for the same period last year. The 2020 rate reflects higher state tax rates and higher income amounts taxed at the statutory rate. The 2019 rate reflects a higher benefit from the reconciliation of the filed tax returns to the estimated tax provision.
The effective tax rate for the 39 weeks ended October 31, 2020 was 23.2% compared to 20.8% for the same period last year. The 2020 rate reflects higher state tax rates, higher income amounts taxed at the statutory rate and additional tax expense for restricted stock vestings due to the stock price for certain grants being lower at the vest date than the grant date. The 2019 rate reflects a reduction in the reserve for uncertain tax positions resulting from statute expirations and a higher benefit from the reconciliation of the filed tax returns to the estimated tax provision.
Segment Information
Our operating results for the Dollar Tree and Family Dollar segments as a percentage of net sales and period-over-period changes are discussed in the following sections.

Dollar Tree
The following table summarizes the operating results of the Dollar Tree segment:
  13 Weeks Ended 39 Weeks Ended
  October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019
(in millions) $ 
% of
Net Sales
 $ 
% of
Net Sales
 $ 
% of
Net Sales
 $ 
% of
Net Sales
Net sales $3,303.2
   $3,074.3
   $9,557.6
   $8,991.4
  
Gross profit 1,154.2
 34.9% 1,050.5
 34.2% 3,206.8
 33.6% 3,070.8
 34.2%
Operating income 417.9
 12.7% 374.6
 12.2% 1,006.5
 10.5% 1,105.9
 12.3%
Net sales for the Dollar Tree segment increased $228.9 million, or 7.4%, for the 13 weeks ended October 31, 2020, compared to the same period last year. The increase was due to sales from new stores of $131.1 million and a 4.0% increase in comparable store net sales. Average ticket increased 19.0% and customer traffic declined 12.6%.
Net sales for the Dollar Tree segment increased $566.2 million, or 6.3%, for the 39 weeks ended October 31, 2020, compared to the same period last year. The increase was due to sales from new stores of $444.4 million and a 2.1% increase in comparable store net sales. Average ticket increased 17.9% and customer traffic declined 13.4%.
Gross profit margin for the Dollar Tree segment increased to 34.9% for the 13 weeks ended October 31, 2020 compared to 34.2% for the same period last year as a result of the net of the following:
Merchandise cost, including freight, decreased 95 basis points primarily due to increased sales of higher margin discretionary merchandise and lower freight costs, partially offset by lower initial mark-on.
Occupancy costs decreased 20 basis points resulting primarily from the leverage due to the comparable store net sales increase in the quarter.
Shrink costs decreased 10 basis points resulting from favorable inventory reconciliations in the current quarter.
Distribution costs increased 50 basis points resulting primarily from higher distribution center payroll and depreciation costs. We paid our hourly distribution center associates a per hour premium for all hours worked during the 13 weeks ended October 31, 2020. Total distribution center COVID-19-related expenses were $6.6 million, or 20 basis points of this increase.
Gross profit margin for the Dollar Tree segment decreased to 33.6% for the 39 weeks ended October 31, 2020 compared to 34.2% for the same period last year as a result of the net of the following:
Distribution costs increased 50 basis points resulting primarily from higher distribution center payroll and depreciation costs. We paid our hourly distribution center associates a per hour premium for all hours worked since March 8, 2020. Total distribution center COVID-19-related expenses were $16.9 million, or 20 basis points of this increase.
Shrink costs increased 10 basis points resulting from unfavorable inventory reconciliations in the current year and an increase in the shrink accrual rate.
Markdown costs increased 10 basis points resulting from increased seasonal markdowns from the lower than planned sell-through on Easter merchandise as a result of the COVID-19 pandemic and $2.9 million of uninsured markdown costs for stores affected by civil unrest.
Merchandise cost, including freight, decreased 10 basis points primarily due to increased sales of higher margin discretionary merchandise and lower freight costs, partially offset by incremental tariffs of $26.1 million and lower initial mark-on. Discretionary merchandise sales were a higher proportion of total sales in the second and third quarters of 2020 while they were a lower proportion in the first quarter of 2020 as a result of the lower Easter sales due to the COVID-19 pandemic.
Operating income margin for the Dollar Tree segment increased to 12.7% for the 13 weeks ended October 31, 2020 from 12.2% for the same period last year. The increase in operating income margin in the 13 weeks ended October 31, 2020 was the result of the gross margin increase noted above, partially offset by an increase in selling, general and administrative expenses, as a percentage of net sales. Selling, general and administrative expenses increased to 22.2% as a percentage of net sales in the 13 weeks ended October 31, 2020 compared to 22.0% for the same period last year as a result of the net of the following:

Payroll expenses increased 50 basis points primarily due to incremental costs associated with the COVID-19 pandemic and increased incentive compensation and store sales bonus expenses resulting from improved operating results in the current quarter. These increases were partially offset by leverage from the comparable store net sales increase and lower office payroll costs. Incremental payroll costs associated with the COVID-19 pandemic, including a $1 per hour premium paid to all store hourly associates for all hours worked during the quarter through September 26, 2020, bonuses for certain field management associates, quarantine pay and sick pay as well as the related payroll taxes, totaled $17.3 million, or 50 basis points.
•Store facility costs decreased 15 basis points primarily due to leverage from the comparable store net sales increaselower repairs and lower electricitymaintenance costs and utility costs.
•Other selling, general and administrative expenses decreased 5 basis points resulting fromwere flat as a percentage of total revenue. Travel and advertising costs were higher in the leverage fromcurrent quarter as the comparable store net sales increase and lower travel costs due toprior year levels were unusually low as a result of the COVID-19 pandemic. The 13 weeks ended October 31, 2020 included $4.5 million, or 15 basis points,current quarter also includes the benefit associated with the settlement of costs for masks, gloves and cleaning supplies due to the COVID-19 pandemic.a contractual dispute.
Operating income in the 13 weeks ended October 31, 2020 includes $28.6 million of COVID-19-related expenses.
Operating income margin for the Dollar Tree segment decreased to 10.5% for the 39 weeks ended October 31, 2020 from 12.3% for the same period last year. The decrease in operating income marginthe selling, general and administrative expense rate in the 39 weeks ended October 31, 202030, 2021 was primarily the result of a 95 basis point decrease in payroll expenses primarily due to lower COVID-19-related store payroll costs and lower stock and incentive compensation expenses, partially offset by minimum wage increases and higher selling, general and administrative expenses, as a percentage of net sales, and the gross profit margin decrease noted above. Selling, general and administrative expenses increased to 23.1% as a percentage of net sales in thehealth insurance costs. The 39 weeks ended October 30, 2021 and October 31, 2020 compared to 21.9%included $10.2 million and $201.0 million, respectively, of COVID-19-related payroll costs. The COVID-19 expenses in 2021 were primarily for the same period last year as a result of the net of the following:
Payroll expenses increased 125 basis points primarily due to incremental costs associated with the COVID-19 pandemic, including a per hour premium paid to all store hourly associates for all hours worked from March 8, 2020 through September 26, 2020, bonuses for certain field management associates, guaranteed bonus payouts and Thank You bonuses for store managers, quarantine pay and sick pay as well as the related payroll taxes. These costs totaled $117.0 million, or 120 basis points,The prior year expenses were for the 39 weeks ended October 31, 2020.
Other selling, general and administrative expenses increased 5 basis points as a result of an increase in insurance costs related to unfavorable development of general liability claims, partially offset by lower travel costs due to the COVID-19 pandemic. The 39 weeks ended October 31, 2020 included $12.8 million, or 15 basis points, of costs for the installation of plexiglass sneeze guards at all registers in our stores and incremental costs for masks, gloves and cleaning supplies due to the COVID-19 pandemic.
Store facility costs decreased 10 basis points due to leverage from the comparable store net sales increase. The 39 weeks ended October 31, 2020 included expenses for repairs to stores damaged in civil unrest.
Operating income in the 39 weeks ended October 31, 2020 includes $147.4 million of COVID-19-related expenses and $5.2 million of uninsured costs related to civil unrest.
Family Dollar
The following table summarizes the operating results of the Family Dollar segment:
  13 Weeks Ended 39 Weeks Ended
  October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019
(in millions) $ 
% of
Net Sales
 $ 
% of
Net Sales
 $ 
% of
Net Sales
 $ 
% of
Net Sales
Net sales $2,873.5
   $2,671.9
   $9,183.5
   $8,304.1
  
Gross profit 769.9
 26.8% 654.0
 24.5% 2,428.4
 26.4% 2,009.4
 24.2%
Operating income 131.4
 4.6% 55.2
 2.1% 472.0
 5.1% 163.9
 2.0%
Net sales for the Family Dollar segment increased $201.6 million or 7.5% for the 13 weeks ended October 31, 2020 compared to the same period last year. The increase was due to a comparable store net sales increase of 6.4% and $63.2 million of new store sales. For the 13 weeks ended October 31, 2020, average ticket increased 21.3% and customer traffic declined 12.3%.
Net sales for the Family Dollar segment increased $879.4 million or 10.6% for the 39 weeks ended October 31, 2020 compared to the same period last year. The increase was due to a comparable store net sales increase of 11.2% and $196.9 million of new store sales, partially offset by lost sales resulting from store closures during fiscal 2019 in connection with our store optimization program. For the 39 weeks ended October 31, 2020, average ticket increased 21.4% and customer traffic declined 8.4%.

Gross profit margin for the Family Dollar segment increased to 26.8% for the 13 weeks ended October 31, 2020 compared to 24.5% for the same period last year. The increase is due to the net of the following:
Shrink expense decreased 70 basis points resulting from favorable inventory reconciliations in the current year.
Merchandise cost, including freight, decreased 60 basis points primarily due to increased sales of higher margin discretionary merchandise, improved initial mark-on and lower freight costs.
Occupancy costs decreased 60 basis points as a result of the leverage from the comparable store net sales increase.
Markdowns at cost decreased 40 basis points primarily due to lower promotional activity and lower clearance markdowns in the current year as a result of higher sell-through of seasonal and apparel merchandise.
Distribution costs were flat as higher distribution center payroll costs were offset by lower distribution center asset disposals and leverage from the comparable store net sales increase. We paid our hourly distribution center associates a per hour premium for all hours worked during the 13 weeks ended October 31, 2020. Total distribution center COVID-19-related expenses were $4.3 million, or 15 basis points.
Gross profit margin for the Family Dollar segment increased to 26.4% for the 39 weeks ended October 31, 2020 compared to 24.2% for the same period last year. The increase is due to the net of the following:
Occupancy costs decreased 90 basis points as a result of the leverage from the comparable store net sales increase and higher expense in the prior year related to the accelerated amortization of the right-of-use assets for stores we closed during 2019.
Merchandise cost, including freight, decreased 65 basis points primarily due to increased sales of higher margin discretionary merchandise and improved initial mark-on, partially offset by incremental tariffs of $8.7 million.
Shrink expense decreased 45 basis points resulting from favorable inventory reconciliations in the current year and the prior year including an increase in the accrual rate.
Markdowns at cost decreased 40 basis points primarily due to store closure and clearance sale markdowns in the prior year and lower promotional activity in the current year, partially offset by $7.5 million of uninsured markdown costs for stores affected by civil unrest.
Distribution costs increased 15 basis points resulting primarily from higher distribution center payroll costs. We paid our hourly distribution center associates a per hour premium for all hours worked since March 8, 2020. Total distribution center COVID-19-related expenses were $11.8 million, or 15 basis points of this increase.
Operating income margin for the Family Dollar segment increased to 4.6% for the 13 weeks ended October 31, 2020 from 2.1% for the same period last year resulting from the gross margin increase noted above and a decrease in selling, general and administrative expenses as a percentage of net sales. Selling, general and administrative expenses were 22.2% as a percentage of net sales in the 13 weeks ended October 31, 2020 compared to 22.4% for the same period last year. The current quarter decrease in selling, general and administrative expenses, as a percentage of net sales, was due to the net of the following:
Other selling, general and administrative expenses decreased 20 basis points primarily due to a decrease in promotional advertising and travel during the COVID-19 pandemic, higher costs in the prior year related to the disposal of fixed assets in connection with the store optimization program and leverage associated with the increase in comparable store net sales during the period, partially offset by an increase in supplies expense. The 13 weeks ended October 31, 2020 included $1.7 million or 5 basis points of costs for masks, gloves and cleaning supplies due to the COVID-19 pandemic.
Store facility costs decreased 20 basis points primarily due to leverage from the comparable store net sales increase and lower electricity costs.
Depreciation and amortization expense decreased 10 basis points primarily due to leverage from the comparable store net sales increase.
Payroll expenses increased 35 basis points primarily due to incremental costs associated with the COVID-19 pandemic and increased incentive compensation and store sales bonus expenses resulting from the improved Family Dollar operating performance, partially offset by leverage from the comparable store net sales increase. Incremental costs associated with the COVID-19 pandemic, including a $1 per hour premium paid to all store hourly associates for all hours worked during the current quarter through September 26, 2020, quarantine pay and sick pay as well as the related payroll taxes, totaled $11.4 million or 40 basis points.

Operating income in the 13 weeks ended October 31, 2020 includes $17.4 million for COVID-19-related expenses.
Operating income margin for the Family Dollar segment increased to 5.1% for the 39 weeks ended October 31, 2020 from 2.0% for the same period last year resulting from the gross margin increase noted above and a decrease in selling, general and administrative expenses, as a percentage of net sales. Selling, general and administrative expenses were 21.3% as a percentage of net sales in the 39 weeks ended October 31, 2020 compared to 22.2% for the same period last year. The decrease in selling, general and administrative expenses, as a percentage of net sales, was due to the following:
Other selling, general and administrative expenses decreased 50 basis points primarily due to a decrease in promotional advertising and travel during the COVID-19 pandemic, higher costs in the prior year related to the disposal of fixed assets in connection with the store optimization program and leverage associated with the increase in comparable store net sales during the period, partially offset by an increase in insurance costs related to unfavorable development of general liability claims. The 39 weeks ended October 31, 2020 included $9.3 million or 10 basis points of costs for masks, gloves and cleaning supplies due to the COVID-19 pandemic and $1.9 million of expenses primarily for fixed asset disposals for stores damaged by civil unrest.
Store facility costs decreased 35 basis points primarily due to leverage from the comparable store net sales increase and lower electricity costs. The 39 weeks ended October 31, 2020 included $2.5 million of incremental repairs and maintenance expenses for stores damaged by civil unrest.
Depreciation and amortization expense decreased 10 basis points primarily due to leverage from the comparable store net sales increase.
Payroll expenses were flat as incremental costs associated with the COVID-19 pandemic and increased incentive compensation and store sales bonus expenses resulting from the improved Family Dollar operating performance were offset by leverage from the comparable store net sales increase and decreases in workers’ compensation expenses and benefits costs, as well as lower temporary help expenses as a result of the prior year including higher expenses to support store-level initiatives. Incremental costs associated with the COVID-19 pandemic, including a per hour premium paid to all store hourly associates for all hours worked from March 8, 2020 to September 26, 2020, bonuses for certain field management associates, guaranteed bonus payouts and Thank You bonuses for store managers, quarantine pay and sick pay as well as the related payroll taxes totaled $83.4taxes.

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Operating Income
13 Weeks Ended39 Weeks Ended
October 30,October 31,Percentage
Change		October 30,October 31,Percentage
Change
(dollars in millions)2021202020212020
Operating income$310.5 $465.5 (33.3)%$1,232.6 $1,206.3 2.2 %
Operating income margin4.8 %7.5 %(2.7)%6.4 %6.4 %— %
Operating income margin decreased to 4.8% for the 13 weeks ended October 30, 2021 compared to 7.5% for the same period last year resulting from the decrease in gross profit margin, partially offset by the decrease in the selling, general and administrative expense rate, as described above. Operating income in the 13 weeks ended October 30, 2021 and October 31, 2020 included $11.6 million or 90 basis points.and $46.3 million, respectively, of COVID-19-related expenses.
Operating income margin was 6.4% for the 39 weeks ended October 30, 2021 and October 31, 2020. In the current year, the decrease in gross profit margin was offset by the decrease in the selling, general and administrative expense rate, as described above. Operating income in the 39 weeks ended October 30, 2021 included $22.1 million of COVID-19-related expenses. Operating income in the 39 weeks ended October 31, 2020 includesincluded $254.3 million of COVID-19-related expenses and $17.6 million of uninsured expenses related to civil unrest.
Interest Expense, Net
13 Weeks Ended39 Weeks Ended
October 30,October 31,Percentage
Change		October 30,October 31,Percentage
Change
(dollars in millions)2021202020212020
Interest expense, net$33.4 $38.1 (12.3)%$99.4 $113.1 (12.1)%
Interest expense, net decreased $4.7 million and $13.7 million in the 13 weeks and 39 weeks ended October 30, 2021, respectively, compared to the same periods last year, resulting from lower average debt outstanding in the current year.
Provision for Income Taxes
13 Weeks Ended39 Weeks Ended
October 30,October 31,Percentage
Change		October 30,October 31,Percentage
Change
(dollars in millions)2021202020212020
Provision for income taxes$60.1 $97.3 (38.2)%$259.3 $253.3 2.4 %
Effective tax rate21.7 %22.8 %(1.1)%22.9 %23.2 %(0.3)%
The effective tax rate for the 13 weeks ended October 30, 2021 was 21.7% compared to 22.8% resulting primarily from higher Work Opportunity Tax Credits as a percentage of pre-tax income in the current year quarter.
The effective tax rate for the 39 weeks ended October 30, 2021 was 22.9% compared to 23.2% for the same period last year resulting from additional tax deductions in the current year related to restricted stock vesting while last year the restricted stock vesting resulted in an increase in tax expense. This benefit was partially offset by higher state tax rates in the current year.
Segment Information
Our operating results for the Dollar Tree and Family Dollar segments and period-over-period changes are discussed in the following sections.

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Dollar Tree
The following table summarizes the operating results of the Dollar Tree segment:
13 Weeks Ended39 Weeks Ended
October 30,October 31,Percentage
Change		October 30,October 31,Percentage
Change
(dollars in millions)2021202020212020
Net sales$3,417.4 $3,303.2 3.5 %$10,003.0 $9,557.6 4.7 %
Gross profit1,031.1 1,154.2 (10.7)%$3,207.1 $3,206.8 — %
Gross profit margin30.2 %34.9 %(4.7)%32.1 %33.6 %(1.5)%
Operating income$290.5 $417.9 (30.5)%$1,019.2 $1,006.5 1.3 %
Operating income margin8.5 %12.7 %(4.2)%10.2 %10.5 %(0.3)%
Net sales for the Dollar Tree segment increased $114.2 million, or 3.5%, for the 13 weeks ended October 30, 2021 compared to the same period last year. The increase was due to sales from new stores of $108.5 million and a 0.6% increase in comparable store net sales. Average ticket increased 1.8% and customer traffic decreased 1.1%.
Net sales for the Dollar Tree segment increased $445.4 million, or 4.7%, for the 39 weeks ended October 30, 2021 compared to the same period last year. The increase was due to sales from new stores of $326.5 million and a 1.7% increase in comparable store net sales. Average ticket increased 3.1% and customer traffic declined 1.4%.
    Gross profit margin for the Dollar Tree segment decreased to 30.2% for the 13 weeks ended October 30, 2021 compared to 34.9% for the same period last year as a result of the net of the following:
•Merchandise cost, including freight, increased 475 basis points primarily due to higher freight costs and lower initial mark-on, partially offset by increased sales of higher margin discretionary merchandise.
•Occupancy costs increased 10 basis points as a result of the loss of leverage due to the low comparable store net sales increase in the quarter and higher real estate tax expenses.
•Distribution costs increased 10 basis points resulting primarily from higher depreciation costs related to two new distribution centers and higher hourly wages, partially offset by lower COVID-19-related expenses. Total distribution-related COVID-19 expenses were $1.9 million and $6.6 million for the 13 weeks ended October 30, 2021 and October 31, 2020, respectively. COVID-19-related expenses in the prior year included a per hour premium paid to all distribution center hourly associates for all hours worked during the quarter.
•Markdown costs increased 5 basis points resulting from higher dated product markdowns.
•Shrink costs decreased 25 basis points resulting from favorable inventory results in relation to accruals in the current quarter and a decrease in the shrink accrual rate.
Gross profit margin for the Dollar Tree segment decreased to 32.1% for the 39 weeks ended October 30, 2021 compared to 33.6% for the same period last year as a result of the net of the following:
•Merchandise cost, including freight, increased 195 basis points due primarily to higher freight costs and lower initial mark-on, partially offset by higher sales of higher margin discretionary merchandise, including a higher Easter sell-through. Easter sales were significantly lower last year as a result of the COVID-19 pandemic.
•Distribution costs increased 5 basis points resulting primarily from higher depreciation costs related to two new distribution centers and higher hourly wages in the current year, partially offset by lower COVID-19-related expenses. Total distribution center COVID-19-related expenses were approximately $4.1 million and $16.9 million for the 39 weeks ended October 30, 2021 and October 31, 2020, respectively. COVID-19-related expenses in the prior year included a per hour premium paid to all distribution center hourly associates for all hours worked from March 8, 2020.
•Markdown costs decreased 5 basis points resulting from lower seasonal markdowns due to the higher Easter sell-through in the current year, partially offset by higher dated product markdowns.
•Shrink costs decreased 40 basis points resulting from favorable inventory results in relation to accruals in the current year and a decrease in the shrink accrual rate.
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Operating income margin for the Dollar Tree segment decreased to 8.5% for the 13 weeks ended October 30, 2021 from 12.7% for the same period last year. The decrease in operating income margin in the 13 weeks ended October 30, 2021 was the result of the gross profit margin decrease noted above, partially offset by a lower selling, general and administrative expense rate. The selling, general and administrative expense rate decreased to 21.7% in the 13 weeks ended October 30, 2021 compared to 22.2% for the same period last year as a result of the following:
•Payroll expenses decreased 30 basis points primarily due to lower COVID-19-related store payroll costs and lower incentive compensation expenses, partially offset by minimum wage increases and higher health insurance expenses. The 13 weeks ended October 30, 2021 and October 31, 2020 included $3.3 million and $17.3 million, respectively, of COVID-19-related payroll expenses. The amounts in the current quarter were primarily for quarantine and sick pay as well as the related payroll taxes. In the prior year quarter, COVID-19-related payroll expenses included store payroll costs for a $1 per hour premium paid to all store hourly associates for all hours worked during the quarter through September 26, 2020, bonuses for certain field management associates, quarantine pay and sick pay as well as the related payroll taxes.
•Other selling, general and administrative expenses decreased 25 basis points due to the current year including the benefit associated with the settlement of a contractual dispute and the realization of certain tax credits. The prior year also included higher costs for masks, gloves and cleaning supplies due to the COVID-19 pandemic.
Operating income in the 13 weeks ended October 30, 2021 and October 31, 2020 included $6.2 million and $28.6 million, respectively, of COVID-19-related expenses.
Operating income margin for the Dollar Tree segment decreased to 10.2% for the 39 weeks ended October 30, 2021 from 10.5% for the same period last year. The decrease in operating income margin in the 39 weeks ended October 30, 2021 was the result of the gross profit margin decrease noted above and a decrease in the selling, general and administrative expense rate. The selling, general and administrative expense rate decreased to 21.9% in the 39 weeks ended October 30, 2021 compared to 23.1% for the same period last year as a result of the following:
•Payroll expenses decreased 95 basis points primarily due to lower COVID-19-related store payroll costs and lower incentive compensation expenses, partially offset by minimum wage increases and higher health insurance costs. The 39 weeks ended October 30, 2021 and October 31, 2020 included $5.0 million and $117.0 million, respectively, of COVID-19-related payroll expenses. COVID-19 expenses in the current year were primarily for quarantine and sick pay as well as the related payroll taxes. In the prior year, COVID-19-related payroll expenses included store payroll costs for a $1 per hour premium paid to all store hourly associates for all hours worked from March 8, 2020 to September 26, 2020, bonuses for certain field management associates, quarantine pay and sick pay as well as the related payroll taxes.
•Other selling, general and administrative expenses decreased 15 basis points due to the current year including the benefit associated with the settlement of a contractual dispute, the realization of certain tax credits and lower store supplies expense, partially offset by higher debit and credit fees resulting from higher debit and credit card penetration. The prior year included costs for the installation of plexiglass sneeze guards at all registers in our stores and higher costs for masks, gloves and cleaning supplies due to the COVID-19 pandemic.
Operating income in the 39 weeks ended October 30, 2021 included $12.4 million of COVID-19-related expenses. Operating income in the 39 weeks ended October 31, 2020 included $147.4 million of COVID-19-related expenses and $5.2 million of uninsured expenses related to civil unrest.
Family Dollar
The following table summarizes the operating results of the Family Dollar segment:
13 Weeks Ended39 Weeks Ended
October 30,October 31,Percentage
Change		October 30,October 31,Percentage
Change
(dollars in millions)2021202020212020
Net sales$2,998.0 $2,873.5 4.3 %9,229.4 9,183.5 0.5 %
Gross profit732.6 769.9 (4.8)%2,381.7 2,428.4 (1.9)%
Gross profit margin24.4 %26.8 %(2.4)%25.8 %26.4 %(0.6)%
Operating income$88.6 $131.4 (32.6)%456.3 472.0 (3.3)%
Operating income margin3.0 %4.6 %(1.6)%4.9 %5.1 %(0.2)%
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Net sales for the Family Dollar segment increased $124.5 million, or 4.3%, for the 13 weeks ended October 30, 2021 compared to the same period last year. The increase was due to a comparable store net sales increase of 2.7% and $69.0 million of new store sales. For the 13 weeks ended October 30, 2021, average ticket increased 5.8% and customer traffic declined 3.0%.
Net sales for the Family Dollar segment increased $45.9 million, or 0.5%, for the 39 weeks ended October 30, 2021 compared to the same period last year. The increase was due to $188.4 million of new store sales, offset partially by a comparable store net sales decrease of 0.8%. For the 39 weeks ended October 30, 2021, average ticket increased 6.1% and customer traffic declined 6.5%.
Gross profit margin for the Family Dollar segment decreased to 24.4% for the 13 weeks ended October 30, 2021 compared to 26.8% for the same period last year. The decrease is due to the net of the following:
•Merchandise cost, including freight, increased 220 basis points primarily due to higher freight costs.
•Distribution costs increased 20 basis points primarily due to higher hourly wages, partially offset by lower COVID-19-related expenses. Total distribution-related COVID-19 expenses were $0.9 million and $4.3 million for the 13 weeks ended October 30, 2021 and October 31, 2020, respectively. The prior year COVID-19-related expenses included a per hour premium for all distribution center hourly associates for all hours worked during the quarter.
•Markdown costs increased 20 basis points primarily due to higher clearance markdowns.
•Occupancy costs increased 5 basis points primarily due to higher real estate tax expenses.
•Shrink expense decreased 30 basis points resulting from favorable physical inventory results in relation to accruals in the current year quarter and a decrease in the shrink accrual rate.
Gross profit margin for the Family Dollar segment decreased to 25.8% for the 39 weeks ended October 30, 2021 compared to 26.4% for the same period last year. The decrease is due to the net of the following:
•Merchandise cost, including freight, increased 100 basis points primarily due to higher freight costs, partially offset by higher initial mark-on.
•Occupancy costs increased 20 basis points as a result of the loss of leverage from the comparable store net sales decrease and higher real estate tax expenses.
•Markdown costs were unchanged as a percentage of net sales compared to the prior year. Current year results included higher clearance markdowns while the prior year included $7.5 million of uninsured markdowns for stores affected by civil unrest.
•Distribution costs decreased 5 basis points primarily due to lower COVID-19-related costs partially offset by higher hourly wages. Total distribution center COVID-19-related expenses were $2.0 million and $11.8 million for the 39 weeks ended October 30, 2021 and October 31, 2020, respectively. COVID-19-related expenses in the prior year included a per hour premium for all distribution center hourly associates for all hours worked beginning March 8, 2020.
•Shrink expense decreased 50 basis points resulting from favorable physical inventory results in relation to accruals and a decrease in the shrink accrual rate.
Operating income margin for the Family Dollar segment decreased to 3.0% for the 13 weeks ended October 30, 2021 from 4.6% for the same period last year resulting from the gross profit margin decrease noted above, offset partially by a decrease in the selling, general and administrative expense rate. The selling, general and administrative expense rate was 21.4% in the 13 weeks ended October 30, 2021 compared to 22.2% for the same period last year. The current quarter decrease in the selling, general and administrative expense rate was due to the net of the following:
•Payroll expenses decreased 65 basis points primarily due to lower COVID-19-related store payroll costs and lower incentive compensation expenses, partially offset by minimum wage increases. The 13 weeks ended October 30, 2021 and October 31, 2020 included $3.5 million and $11.4 million, respectively, of COVID-19-related payroll expenses. The amounts in the current quarter were primarily for quarantine and sick pay as well as the related payroll taxes. The prior year quarter included a $1 per hour premium paid to all store hourly associates for all hours worked through September 26, 2020, quarantine pay and sick pay as well as the related payroll taxes.
•Store facility costs decreased 30 basis points primarily due to lower repairs and maintenance expenses and lower telecommunication expenses.
•Depreciation and amortization expense increased 5 basis points primarily due to expenditures associated with the store optimization program.
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•Other selling, general and administrative expenses increased 20 basis points primarily due to increases in advertising and travel expenses, an increase in insurance costs related to general liability claims and increases in tax reserves. Promotional advertising and travel were lower in the prior year quarter due to the COVID-19 pandemic.
Operating income in the 13 weeks ended October 30, 2021 and October 31, 2020 included $5.4 million and $17.4 million, respectively, of COVID-19-related expenses.
Operating income margin for the Family Dollar segment decreased to 4.9% for the 39 weeks ended October 30, 2021 from 5.1% for the same period last year resulting from the gross profit margin decrease noted above, offset partially by a decrease in the selling, general and administrative expense rate. The selling, general and administrative expense rate was 20.9% in the 39 weeks ended October 30, 2021 compared to 21.3% for the same period last year. The current year decrease in the selling, general and administrative expense rate was due to the net of the following:
•Payroll expenses decreased 60 basis points primarily due to lower COVID-19-related store payroll costs and lower incentive compensation expenses, partially offset by minimum wage increases and the loss of leverage from the comparable store net sales decrease. The 39 weeks ended October 30, 2021 and October 31, 2020 included $5.1 million and $83.4 million, respectively, of COVID-19-related payroll expenses. COVID-19 expenses in the current year were primarily for quarantine and sick pay as well as the related payroll taxes. The prior year included a per hour premium paid to all store hourly associates for all hours worked from March 8, 2020 to September 26, 2020, bonuses for certain field management associates, guaranteed bonus payouts and Thank You bonuses for store managers, quarantine pay and sick pay as well as the related payroll taxes.
•Store facility costs decreased 10 basis points primarily due to lower repairs and maintenance expenses and lower telecommunication expenses. The 39 weeks ended October 31, 2020 included $2.5 million of incremental repairs and maintenance expenses for stores damaged by civil unrest.
•Depreciation and amortization expense increased 10 basis points primarily due to the loss of leverage from the comparable store net sales decrease and expenditures associated with the store optimization program.
•Other selling, general and administrative expenses increased 25 basis points primarily due to an increase in advertising expenses, increases in tax reserves and the loss of leverage from the comparable store net sales decrease. Promotional advertising was lower in the prior year due to the COVID-19 pandemic.
Operating income in the 39 weeks ended October 30, 2021 included $9.5 million of COVID-19-related expenses. The 39 weeks ended October 31, 2020 included $104.9 million forof COVID-19-related expenses and $12.4 million of uninsured costs related to civil unrest.
Liquidity and Capital Resources
Our business requires capital to build and open new stores, expand and renovate existing stores, expand our distribution network and operate and expand our existing stores. Our working capital requirements for existing stores are seasonal in nature and typically reach their peak in the months of September and October. Historically, we have satisfied our seasonal working capital requirements for existing stores and have funded our store opening and distribution network expansion programs from internally generated funds and borrowings under our credit facilities.
The following table compares cash-flow related information for the 39 weeks ended October 30, 2021 and October 31, 2020 and November 2, 2019:2020:
 39 Weeks Ended 39 Weeks Ended
 October 31, November 2, October 30,October 31,
(in millions) 2020 2019(in millions)20212020
Net cash provided by (used in):    Net cash provided by (used in):
Operating activities $1,733.7
 $1,014.5
Operating activities$1,018.7 $1,733.7 
Investing activities (707.5) (768.7)Investing activities(746.3)(707.5)
Financing activities (446.7) (212.0)Financing activities(981.6)(446.7)
Net cash provided by operating activities increased $719.2decreased $715.0 million primarily as a result ofdue to higher accounts payable, current liabilities and other liabilities and lower inventory levels at October 31, 2020, and increased earnings before depreciation and amortization in the current year.
Net cash used in investing activities decreased $61.2increased $38.8 million primarily due to higher capital expenditures in the prior year for the Family Dollar store optimization program, including H2 renovations and re-banners. H2 renovations have been slowed in the current year due to the COVID-19 pandemic. The decrease was partially offset by increased capital expenditures related to distribution centeryear.

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projects in the current year and grant funds received from state and local governments for our Summit Pointe development in the prior year.
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Net cash used in financing activities increased $234.7$534.9 million resulting primarily fromdue to $950.0 million of cash paid for stock repurchases in the current year compared to nearly $200.0 million in the prior year, partially offset by the final $250.0 million payment on the Senior Floating Rate Notes due 2020.
In the first quarter of fiscal 2020, we preemptively drew on our Revolving Credit Facility to reduce our exposure to potential short-term liquidity risk in the banking system as a result of the COVID-19 pandemic and as of October 31, 2020 that has been repaid. prior year.
At October 31, 2020,30, 2021, our totallong-term borrowings were $3.55$3.25 billion and we had $1.2$1.18 billion available under our Revolving Credit Facility. We also have $346.5$425.0 million in Letter of Credit Reimbursement and Security Agreements with various financial institutions, under which $216.6$311.5 million was committed to letters of credit issued for routine purchases of imported merchandise as of October 31, 2020.30, 2021.
We repurchased 9,156,898 shares of common stock on the open market for $950.0 million during the 39 weeks ended October 30, 2021. We repurchased 2,154,304 shares of common stock on the open market for $200.0 million during the 39 weeks ended October 31, 2020. Approximately $5.8 million in share repurchases had not settled as of October 31, 2020 and this amount was accrued in the accompanying unaudited condensed consolidated balance sheet as of October 31, 2020. We repurchased 1,967,355 shares of common stock onDuring the open market for $200.0 million during the 3913 weeks ended NovemberOctober 30, 2021, the Board increased our share repurchase authorization by $1.05 billion to an aggregate amount of $2.5 billion, including $1.45 billion available for repurchases under the Board’s previous repurchase authorization approved on March 2, 2019. As of October 31, 2020, we have $600.0 million remaining under Board repurchase authorization.2021.
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 and diesel fuel cost changes. 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 Revolving Credit Facility, as borrowings under the Revolving Credit Facility bear interest at LIBOR, reset periodically, plus 1.00% to 1.50% as determined by our credit ratings and leverage ratio. As ofAt October 31, 2020,30, 2021, there were no borrowings outstanding under the Revolving Credit Facility.
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 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 October 31, 2020,30, 2021, 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.
There have been no changes in our internal control over financial reporting during the fiscal quarter ended October 31, 202030, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we are defendants in ordinary, routine litigation or proceedings incidental to our business, including allegations regarding:
•employment-related matters;
•infringement of intellectual property rights;
•personal injury/wrongful death claims;
•real estate matters;
•environmental and safety issues; and
•product safety matters, which may include regulatory matters.
In addition, we are currently defendants in national and state proceedings described in Note 2 - Legal ProceedingsCommitments and Contingencies to our unaudited condensed consolidated financial statements.
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 or financial condition. 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 period or year in which they are reserved or resolved. Based on the information available, including the amount of time remaining before trial, the results of discovery and the judgment of internal and external counsel, we may be unable to express an opinion as to the outcome of those matters which are not close to being resolved and may be unable to estimate a loss or potential range of loss.
Item 1A. Risk Factors.
This section supplements and updates certain ofThere have been no material changes to the information found under Part I, Itemrisk factors described in “Item 1A. “RiskRisk Factors” of our Annual Report on Form 10-K for the fiscal year ended February 1, 2020 filed withJanuary 30, 2021, other than as set forth below and in the Securities and Exchange Commission on March 20, 2020, and under Part II, Item 1A. “Risk Factors”discussion of our Quarterly Report on Form 10-Q for the period ended August 1, 2020 filed with the Securities and Exchange Commission on August 27, 2020, and is based on the information currently known to us and recent developments since the dates of those filings. The matters discussed below should be read in conjunction with the risk factors included in those filingsthe “Cautionary Note Regarding Forward-Looking Statements” section and in the discussion of certain items that have impacted or could impact our business or results of operations during 2021 or in Part 1, Itemthe future as set forth in the “Additional Considerations” section within “Item 2. “Management’sManagement’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q.
However, the risksWe are experiencing higher costs and uncertainties that we face are not limited to those described below and those set forthdisruptions in our SEC filings. Additional risksdistribution network, which have had and uncertaintiescould have an adverse impact on our sales, margins and profitability.
Our success is dependent on our ability to import or transport merchandise to our distribution centers and then truck merchandise to our stores in a timely and cost-effective manner. We rely heavily on third parties including ocean carriers and truckers in that process. We may not presently knownanticipate, respond to or control all of the challenges of operating our distribution network. Additionally, when a shipping or trucking line fails to deliver on its commitments or our distribution centers fail to operate effectively, we could experience increased freight costs or merchandise shortages that could lead to lost sales. We are experiencing ocean shipping disruptions, trucking shortages, increased ocean shipping rates and increased trucking and fuel costs. In the last several years, we have incurred higher distribution costs due to a variety of factors. Some of the factors that have had and could have an adverse effect on our distribution network or costs in 2021 are:
•Shipping disruptions. There is currently a shortage of shipping capacity from China and other parts of Asia, and as a result we are experiencing significant delays in importing our goods. We are also experiencing issues with port congestion and pandemic-related port closings and ship diversions. Our receipt of imported merchandise has been and may be further disrupted or delayed as a result of these or other factors. Delays could potentially have a material adverse impact on future product availability, product mix and sales, especially at Dollar Tree, if the delays do not improve. These and other disruptions related to the global COVID-19 pandemic have adversely impacted Trans-Pacific shipping in 2021 and are expected to continue to affect shipping from China, where we buy a significant portion of our merchandise, and we cannot predict when the disruptions will end. In addition, our supply chain may be disrupted as a result of other international events such as war or acts of terrorism.
•Shipping costs. We are experiencing unprecedented increases in shipping rates from the Trans-Pacific ocean carriers due to various factors, including a continued increase in spot market rates and the limited availability of shipping capacity. As a result of the inability or unwillingness of the ocean carriers with whom we have carriage contracts to execute annual contracts for all of our shipping needs or to completely fulfill their contractual commitments to us, or that we currently believehave found it necessary to rely on an increasingly expensive spot market and other alternative sources to make up the shortfall in our
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shipping needs during fiscal 2021. Freight costs for fiscal 2021 are now expected to be immaterial may$2.00 per diluted share higher than fiscal year 2020. Changes in import duties, import quotas and other trade sanctions could also adversely affectincrease our businesscosts.
•Efficient operations and the trading pricemanagement. Distribution centers and other aspects of our commondistribution network are difficult to operate efficiently, and we have experienced and could continue to experience a reduction in operating efficiency resulting in delayed shipments of merchandise to our stores as a result of high turnover and challenges in attracting and retaining an adequate and reliable workforce. Although we have offered sign-on bonuses, enhanced wages and other inducements in certain markets to address the shortage of labor at our distribution centers, such measures have increased our costs and are expected to continue to increase our costs, which could have an adverse effect on our margins and profitability. There can be no assurances that such measures will be adequate to attract and retain the workforce necessary for the efficient operation of our distribution centers.
•Trucking costs. We have experienced significant increases in trucking costs due to the truck driver shortage and other factors, and our trucking costs are expected to increase in the future.
•Diesel fuel costs. We have experienced volatility in diesel fuel costs and are expecting increases to continue this fiscal year.
•Vulnerability to natural or man-made disasters, including climate change. A fire, explosion or natural disaster at a port or any of our distribution facilities could result in a loss of merchandise and impair our ability to adequately stock particularlyour stores. Some facilities are vulnerable to earthquakes, hurricanes, tornadoes or floods, and an increase in lightthe severity and frequency of extreme weather events may increase our operating costs or disrupt our supply chain.
•Labor disagreement. Labor disagreements, disruptions or strikes, for example at ports, may result in delays in the changing naturedelivery of merchandise to our distribution centers or stores and increase costs.
•Direct-to-store deliveries. In fiscal 2020, we purchased and delivered approximately 13% of our merchandise for our Family Dollar segment through our relationship with McLane Company, Inc., which distributes consumable merchandise from multiple manufacturers. We also rely on third parties to deliver frozen and refrigerated product, as well as chocolate in the COVID-19 pandemicsummer, to our Dollar Tree stores. To the extent that supply chain disruptions and related economic disruptions.higher costs affect McLane Company, Inc. or our other suppliers, we may be subject to delays or reductions in deliveries and higher costs for merchandise. A substantial disruption in our relationship with or in service levels from McLane Company, Inc. or other suppliers could have a significant near-term impact on our operations.
If the COVID-19 pandemic worsens and new, more restrictive public health measures are implemented, there couldWe may not be a materialsuccessful in implementing important strategic initiatives, which may have an adverse impact on our business and financial results, or in anticipating the impact of these initiatives.
We have adopted important strategic initiatives that are designed to create growth, improve our results of operations.operations and drive long-term shareholder value, including:
•the addition of price points above $1 (such as $1.25) in all Dollar Tree stores;
•the expansion of a multi-price initiative in Dollar Tree stores referred to as Dollar Tree Plus;
•the introduction of selected Dollar Tree merchandise into Family Dollar stores;
•the roll-out of the Combo Store format that combines a Dollar Tree store and Family Dollar store in a single location;
•the renovation of Family Dollar stores to the H2 format;
•our plans relating to new store openings for Dollar Tree and Family Dollar generally; and
•the continued integration of the operations of Family Dollar with Dollar Tree.
The continuing COVID-19 pandemicimplementation and related public health measures have caused economic disruptions that have adversely affected,timing of these strategic initiatives are subject to various risks and are expecteduncertainties, including the acceptance of the amount of price increases by customers and others as justified or reasonable; customer acceptance of new store concepts and merchandise offerings; construction and permitting delays relating to continue to adversely affect, elementsnew and renovated stores; the success of our business. We have, however, been classified as an essential business and been allowed to remain open but our operational costs have increased. To date, we have not experienced a sustained decline in overall sales, althoughintegration strategies; the salesavailability of certain categories, such as higher margin Easter merchandisedesirable real estate locations for lease at the Dollar Tree banner, were materially and adversely impacted.
There continues to be uncertainty and unpredictability aboutreasonable rates; the impact of the COVID-19 pandemicpandemic; and other factors beyond our control. In addition, several of these initiatives depend on the timeliness, cost and availability of adequate levels of the appropriate domestic and imported merchandise, our ability to execute on our financialplans and operating results in future periods. Ifexpectations with respect to those initiatives and the pandemic worsens, governments may reinstate or extend business or personal restrictions, and we could be forced to curtail or restrict operations. We might also experience new disruptions incontinued success of our integration of Family Dollar merchandising, supply chain and sourcesoperations with those of Dollar Tree. To the extent that shipping delays, supply suffer facility closureschain disruptions and other distribution logistics adversely affect the availability of merchandise necessary to implement our strategic initiatives, we may delay or encounter difficulties in hiringreduce our planned rate of implementation of one or retaining the workforce required for our business. These circumstances, if applicable for an extended duration or across significant partsmore of those initiatives.
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The rollout of our operating footprint, could have a material adverse effect on our businessinitiative to add price points above $1 in Dollar Tree stores is subject to additional risks and results of operations.

The COVID-19 pandemic and public health measures have already contributed to, among other things:
Increases in the cost of operating our stores and distribution centers, including temporarily higher wages and bonuses paid to associates, enhanced cleaning protocols and the cost of personal protection equipment.
Disruptions in the patterns of consumer demand, which has leduncertainties relating to, among other things, decreased demand for Easteroperational changes such as signage, advertising, and party merchandise in the Dollar Tree segment, an increase in consumer demand for household cleaning and other essential supplies and corresponding difficultyemployee training, provisions in our abilityleases and/or third-party waivers tied to maintain those items in stock, fluctuations in demand for discretionary products,single or $1 price points, and an increase in demand for online sales (which is an insignificant partcompliance with the terms of our business)leases and home or curbside deliveries (which we do not offer).state and local consumer laws.
Decreasing foot traffic in our stores as a result of the promotion of social distancing, the adoption of various governmental restrictions on personal and business activities and changing consumer attitudes with respect to in-person shopping and changes in shopping patterns.
Reduced consumer demand for holiday, seasonal, party, and other discretionary products that generally carry a higher margin may have a negative impact on our gross profit margin, especially in the later part of the year when they typically form a larger part of our merchandise mix. It is uncertain what effect the COVID-19 crisis will have on upcoming holiday merchandise sales such as Christmas.
Our business and results of operations could be materially harmed if we experience a decline in consumer confidence and spending as a result of unfavorable economic conditions or political uncertainties, for example because government assistance to households and businesses terminate or are reduced prematurely.
Governmental authorities adopted substantial measures, including fiscal and monetary stimulus, to provide economic assistance to individual households and businesses and support economic stability during the pandemic and the related recession and increase in unemployment. We believe the economic intervention has materially benefited our sales. Some of these measures have been exhausted and replaced with lesser measures and we anticipate others will eventually be modified, reduced or discontinued in whole or in part. There can be no assurance that any current or future governmental efforts to support the economy during the pandemicwe will be sufficientable to mitigate the negative effect of the pandemic on the economy. If consumer spending on the goods we sell declines as aimplement important strategic initiatives in accordance with our expectations or that they will generate expected returns, which may result there could be a materialin an adverse impact on our business and resultsfinancial results.
Our business or the value of operations.our common stock could be negatively affected as a result of actions by activist shareholders.
To date, the pandemic has not created material disruptionsWe value constructive input from investors and regularly engage in dialogue with our shareholders regarding strategy and performance. The Board of Directors and management team are committed to acting in the functioningbest interests of all of our shareholders. There is no assurance that the creditactions taken by the Board of Directors and management in seeking to maintain constructive engagement with our shareholders will be successful. Activist shareholders who disagree with our strategy or financial markets or impacted our credit ratings. However,the way we can provide no assurances that material disruptions in the credit or financial markets will not occurare managed have sought to effect change, and may seek to effect change in the future, orthrough various strategies that such disruptions wouldrange from private engagement to publicity campaigns, proxy contests, efforts to force transactions not adversely affectsupported by the Board of Directors and litigation. Responding to these actions may be costly and time-consuming, disrupt our operations, divert the attention of our Board of Directors, management and employees, and interfere with our ability to access capital on favorable termsexecute our strategic plan and continueattract and retain qualified executive leadership. A contested election, for example, could also require us to meet our liquidity needs.
We are unable to predict the full extent to which COVID-19incur substantial legal and the resulting recession, or the timing or extent of any economic recovery, will affect our customers, associates, suppliers, vendors, other business partners or our business, results of operationspublic relations fees and financial condition. If the pandemic-related recession is prolonged and/or worsens, it could amplify many of the other risks described in the “Risk Factors” section of our most recent Form 10-K.
Our supply chain may be disrupted by changes in United States trade policy with China.
We rely on domestic and foreign suppliers to provide us with merchandise in a timely manner and at favorable prices. Among our foreign suppliers, China is the source of a substantial majority of our imports. A disruption in the flow of our imported merchandise from China or an increase in the cost of those goods may significantly decrease our profits.
proxy solicitation expenses. The United States has scaled back punitive Section 301 tariffs on certain Chinese imports based on an agreement reached with China, which represents a material benefit to us.
However, in 2020, the U.S. and Chinese governments have taken certain actions that appear to indicate worsening relations between the two countries. Such actions include:
The signing of an Executive Order by President Trump revoking Hong Kong’s preferential trade status with the U.S.;
The closing of the Chinese diplomatic consulate in Houston, Texas and of the U.S. consulate in the city of Chengdu, China and the imposition of sanctions by the U.S. on officials of China and Hong Kong and by the Chinese government on certain U.S. lawmakers; and
Steps by the U.S. government to restrict access by Chinese companies to U.S.-developed semiconductor technology and to require a Chinese digital company to divest operations in the United States.

There is a risk that these actions will further escalate trade tensions between the U.S. and China, resulting in a weakening or disruption in trade relations between the two countries, which could adversely affect our ability to source merchandise from our Chinese suppliers in a timely manner and at a favorable cost.
In addition, there isperceived uncertainty as to our future direction resulting from activist strategies could also affect the actionsmarket price and volatility of our common stock.
On November 12, 2021, one of our investors filed a Schedule 13D with the SEC, reporting that it was the owner of approximately 5.7% of our outstanding common stock (in addition to other economic exposure through derivative instruments), and that it intended to have communications with members of our management, our Board of Directors, shareholders and other persons regarding our business, operations, strategies, governance and the composition of our executive suite and our Board of Directors and possibilities for changes thereto. Although we may engage in discussions with this investor as we do others, there can be no assurance as to the outcome of any conversations that may be taken during the remaindertake place. In addition, actions of the Trump Administration or under a new Biden Administration with respect to U.S. trade policy with China. The imposition of any new U.S. tariffs on Chinese imports or the taking of other actions against China in the future, and any responses by China, could impair our ability to meet customer demand and could result in lost sales or an increaseactivist shareholders may cause significant fluctuations in our coststock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of merchandise, which would have a material adverse impact on our business and results of operations.business.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
The following table presentsDuring the 13 weeks ended October 30, 2021, the Board increased our share repurchase activity duringauthorization by $1.05 billion to an aggregate amount of $2.5 billion, including $1.45 billion available for repurchases under the third quarterBoard’s previous repurchase authorization approved on March 2, 2021. The repurchase authorization does not have an expiration date.
We did not repurchase any shares of 2020:common stock on the open market in the 13 weeks ended October 30, 2021.
Fiscal Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions)
August 2 - August 29, 2020 —
 $—
 —
 $800.0
August 30 - October 3, 2020 580,296
 90.46
 580,296
 747.5
October 4 - October 31, 2020 1,574,008
 93.71
 1,574,008
 600.0
Total 2,154,304
 $92.84
 2,154,304
 $600.0
As of October 31, 2020, we had $600.0 million remaining under Board repurchase authorization.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
None.
Item 5. Other Information.
None.
Item 6. Exhibits.
    Incorporated by Reference  
Exhibit Exhibit Description Form Exhibit Filing Date Filed Herewith
3.1 
Amended Articles of Incorporation of Dollar Tree, Inc., effective June 20, 2013
 8-K 3.1 6/21/2013  
3.2 
Amended Bylaws of Dollar Tree, Inc., effective June 11, 2020
 8-K 3.1 6/12/2020  
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

Incorporated by Reference
ExhibitExhibit DescriptionFormExhibitFiling DateFiled Herewith
3.18-K3.16/21/2013
3.28-K3.16/11/2021
31.1X
31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
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Incorporated by Reference
ExhibitExhibit DescriptionFormExhibitFiling DateFiled Herewith
10132.1
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
101The following financial statements from our Form 10-Q for the fiscal quarter ended October 31, 2020,30, 2021, 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 StatementsX
104The cover page from our Form 10-Q for the fiscal quarter ended October 31, 2020,30, 2021, formatted in Inline XBRL and contained in Exhibit 101X

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
DOLLAR TREE, INC.
Date:November 23, 2021By:DOLLAR TREE, INC.
Date:November 24, 2020By:/s/ Kevin S. Wampler
Kevin S. Wampler
Chief Financial Officer
(principal financial officer)


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