Bulletin: Dollar Tree's Prudent Financial Policy Will Likely Enable It To Mitigate The Risks From Family Dollar's Underperformance

This report does not constitute a rating action. NEW YORK (S&P Global Ratings) March 14, 2024--S&P Global Ratings today said that its ratings on Dollar Tree Inc. (BBB/Stable/A-2) are not immediately affected by the company's announcement that it will take impairment charges due to challenges with its Family Dollar banner. The portfolio optimization review included impairment charges of $594.4 million. Additional charges include $1.07 billion of goodwill impairment and a $950 million trade name intangible impairment. The bulk of the impairment charges will not affect our measure of Dollar Tree's EBITDA, except for the amounts relating to inventory markdowns and the consulting fees (less than $100 million) related to the review. The company's leverage remains well below our 3.0x downside

...March 14, 2024 This report does not constitute a rating action. NEW YORK (S&P Global Ratings) March 14, 2024--S&P Global Ratings today said that its ratings on Dollar Tree Inc. (###/Stable/A-2) are not immediately affected by the company's announcement that it will take impairment charges due to challenges with its Family Dollar banner. The portfolio optimization review included impairment charges of $594.4 million. Additional charges include $1.07 billion of goodwill impairment and a $950 million trade name intangible impairment. The bulk of the impairment charges will not affect our measure of Dollar Tree's EBITDA, except for the amounts relating to inventory markdowns and the consulting fees (less than $100 million) related to the review. The company's leverage remains well below our 3.0x downside threshold for the current rating. Weaker demand from its low-income customers, a shift in its sales mix toward lower-margin consumables, and elevated shrink costs will likely to continue to...

Bulletin