Tear Sheet: Dollar Tree Inc.

Despite a difficult environment highlighted by supply-chain disruption, inflation, and wage pressure, Dollar Tree Inc.?s revenue grew 7.6% in 2022 while adjusted EBITDA margins expanded 100 basis points (bps) due to a raised base price point at Dollar Tree to $1.25 from $1.00 and continued product introductions under the Dollar Tree Plus Initiative. S&P Global Ratings expects tougher comps in 2023 as the company laps price hikes and negative traffic trends continue across the Dollar Tree banner, which generates the majority of the company?s operating profit. Although we expect some offset from lower freight costs, this is likely to be more material in 2024. The company has continued to invest in its infrastructure. Although these benefits are likely to help

...May 11, 2023 Dollar Tree's increase in investments and lapping of a $1.25 price increase will weigh on margins as the company positions itself for long-term growth. Despite a difficult environment highlighted by supply-chain disruption, inflation, and wage pressure, Dollar Tree Inc.'s revenue grew 7.6% in 2022 while adjusted EBITDA margins expanded 100 basis points (bps) due to a raised base price point at Dollar Tree to $1.25 from $1.00 and continued product introductions under the Dollar Tree Plus Initiative. S&P Global Ratings expects tougher comps in 2023 as the company laps price hikes and negative traffic trends continue across the Dollar Tree banner, which generates the majority of the company's operating profit. Although we expect some offset from lower freight costs, this is likely to be more material in 2024. Although not expected, a Family Dollar turnaround is the most likely driver of an upside. The company has continued to invest in its infrastructure. Although these benefits...

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