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Dollar Tree rolling out $1.25 price point in all stores

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Third-quarter net sales rose 3.9% to $6.42 billion

CHESAPEAKE, Va. — Dollar Tree Inc. on Tuesday reported third-quarter results that were in line with Wall Street’s expectations, and announced that it would be rolling out a higher price point in all stores.

Dollar Tree’s consolidated net sales for the quarter increased 3.9% to $6.42 billion. Same-store sales were up 1.6% for the company as a whole, and 2.7% in the Family Dollar chain and 0.6% in the Dollar Tree chain. Net income was $216.8 million in the third quarter and diluted earnings per share for the quarter was $0.96, compared to $1.39 per share in the prior year’s quarter.

Dollar Tree Family DollarThe company also said it would be adding the $1.25 price point for at all Dollar Tree Stores nationwide by end of its fiscal 2022 first quarter, and that consumer expectations about rising prices were easing the transition.

“We experienced a strong finish to the quarter, as shoppers are increasingly focused on value in this inflationary environment,” Dollar Tree president and CEO Michael Witynski said. “Our Dollar Tree pricing tests have demonstrated broad consumer acceptance of the new price point and excitement about the additional offerings and extreme value we will be able to provide. Accordingly, we have begun rolling out the $1.25 price point at all Dollar Tree stores nationwide. The continuing expansion of our key strategic initiatives, including Dollar Tree Plus, Combo Stores, and the H2 format, are all going well and on, or ahead of, plan. I am very proud of our team’s efforts – especially those in our stores and distribution centers – to serve our customers by delivering incredible value on everyday products.”

The company said that the $1.25 price point, which will apply to a majority of Dollar Tree’s assortment, will allow the chain to expand its offerings, introduce new products and sizes, and provide families with more of their daily essentials. It will also allow the chain to reintroduce many customer favorites and key traffic-driving products that were previously discontinued due to the constraints of the $1.00 price point.

The new price point will enable Dollar Tree to return to its historical gross margin range by mitigating historically-high merchandise cost increases, including freight and distribution costs, as well as higher operating costs, such as wage increases.

Dollar Tree’s leadership team said it has been planning for the expansion of the initiative since late summer 2021. In September, the company announced its plan to add additional price points above $1.00 to all Dollar Tree Plus stores and – on a test-and-learn basis – to selected legacy Dollar Tree stores. The company said it was encouraged by the positive customer feedback and store performance during the initial testing phase and has since introduced the initiative in nearly 200 additional legacy Dollar Tree stores.

The results to date have been overwhelmingly positive, according to the company, which cited a survey showing that 77% of shoppers indicated they were almost immediately aware of the new price point when visiting the store, and 91% saying they would shop Dollar Tree with the same or increased frequency. Many have also indicated they are seeing price increases across the market and that Dollar Tree is still providing the products they need at an undeniable value. As key traffic-driving products are reintroduced, the company is confident that customers will be extremely pleased with the even greater value they will discover on store shelves.

Dollar Tree plans to introduce the new price point in more than 2,000 additional legacy Dollar Tree stores in December and complete the rollout to all stores by the end of the first fiscal quarter of 2022.

“Lifting the one-dollar constraint represents a monumental step for our organization and we are enthusiastic about the opportunity to meaningfully improve our shoppers’ experience and unlock value for our stakeholders,” Witynski said. “Guided by Dollar Tree’s same founding principles, we will be relentless in our commitment to offer our customers the best value possible.”


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