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Dollar Tree (Nasdaq: DLTR) | Company Profile, History, Competitors

 

Dollar Tree (NASDAQ: DLTR) is the largest single price point discount retailer in the United States. The retailer owns two chains: Dollar Tree and Family Dollar. As of 2017, the company had 14,835 store locations in the United States and Canada. The company was founded in 1986 and headquartered in Chesapeake, VA.

Dollar Tree was founded in 1986 and went public in 1995. In 2015, Dollar Tree acquired Family Dollar to become the largest dollar retailer in the United States. The stores carry a wide range of food, general merchandise and seasonal products in the single dollar price point.

Business Overview

Dollar Tree operates in two main segments:
  • Dollar Tree  (50% of 2017 Revenues): Sells everything for $1. Total of 6,650 store locations.
  • Family Dollar (50% of 2017 Revenues): Sells everything for $10 or less. Total of 8,185 store locations.

Dollar Tree Segment

As of 2017, Dollar Tree had 6,650 store locations in the United States and Canada. The average store is 10,000 square feet and carries 7,200 items. The US stores sell everything for $1 or less. The Canadian stores sell everything for $1.25 CAD or less. The stores carry food, health, beauty, household products, toys, housewares and seasonal products.

The stores advertise an Item of the Week every week of the year and uses WOW signage throughout the stores.

To sell items for $1, Dollar Tree comes up with creative ways including selling smaller versions of national brands and carrying private label brands.

Family Dollar Segment

As of 2017, Family Dollar had 8,185 store locations in the United States and Canada. The average store is 6,000-8,000 square feet and carries 7,100 items. Prices range from $1-$10. The stores carry food, health, beauty, housewares, home decor, apparel, seasonal products and electronics.

The stores create a value perception with signage in the stores that compare discounts between national and private brands. Family Dollar also relies on promotions and temporary price drops.

Suppliers and Distribution

As of 2017, roughly 40% of Dollar Tree's items are imported and 18% of Family Dollar's items are imported. China is the majority source of the imports.

As of 2017, Dollar Tree has 13 distribution centers in the United States and Canada. Family Dollar has 11 distribution centers.

Roughly 90% of Dollar Tree items receive inventory from their distribution centers. Roughly 75% of Family Dollar items come from their distribution centers. The remainder are shipments directly from the vendor.

Competitors

The main competitors are discount retailers such as Family Dollar, Big Lots, 99 Cents Only. They also compete against mass merchants like Walmart and Target, as well as warehouse clubs like Sam's Club, Costco and BJ's Wholesale.

History

The company was founded in 1986 by K.R. Perry, Macon Brock and Doug Perry. They opened five initial stores in Georgia, Tennessee and Virginia. The stores were called "Only $1.00". In 1993, the company rebranded itself to Dollar Tree.

In 1995, the company went public. The proceeds from the IPO were used to fund acquisitions.

In 2004, Dollar Tree had stores in all 48 contiguous states. In 2006, Dollar Tree opened its 3,000th store. In 2010, Dollar Tree opened its 4,000th store.

In 2010, Dollar Tree acquired Dollar Giant to expand into Canada.

In 2015, Dollar Tree acquired Family Dollar to create the largest dollar retailer in the United States.

Management

Gary M. Philbin  (CEO): Gary Philbin serves as CEO since 2017. Prior, he served in various roles at the company including President of Enterprise and COO. He had also served as Vice President Operations at Supervalu and Senior Vice President Merchandising at A&P.

Kevin S. Wampler (CFO): Kevin Wampler serves as CFO since 2008. Prior, he served as CFO and Controller at Finish Line.

Financials

 $ USD in millions    2013    2014 2015 2016 2017  2018
 Revenues $7,395 
$7,840 
$8,602 
$15,498 
$20,719 
$22,246
 Gross Profit $2,653 
$2,790 
 $3,034 
 $4,730 
 $6,395 
 $7,022
 Operating Profit $920 
$970 
 $1,040 
 $1,050 
 $1,705 
$1,999
 Net Income$619 
$597 
$599 
 $282 
 $896 
$1,714
 EPS$2.68 
$2.72 
$2.90 
$1.26 
$3.78 
 $7.21

Dollar Tree, Inc.
 
  Type     Public
  Ticker     NASDAQ: DLTR
  Industry Retail
  Founded 1986
  Headquarters Chesapeake, VA
  Locations 14,835 (2017)
  Revenues
$2.4bn (2017)
  Employees 176,100 (2017)
  Website dollartree.com