Common-Size Income Statement
Dollar Tree Inc., common-size consolidated income statement
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
- Cost of Sales
- Cost of sales as a percentage of net sales exhibits fluctuations within a relatively narrow band, ranging from approximately -68.43% to -70.63% over the periods analyzed. The trend shows a slight increase in cost relative to sales in recent years, peaking at -70.63% in the latest period, indicating a subtle rise in cost pressure.
- Gross Profit
- Gross profit margins correspond inversely with cost of sales, declining gradually from 31.57% to 29.37% over the examined timeframe. This decline suggests a minor compression in profitability at the gross level, likely driven by the marginal increase in cost of sales.
- Other Revenue
- Other revenue is negligible or absent in most years, appearing only in the last two years at 0.00% and 0.04% of net sales, indicating minimal contribution to overall revenue from non-core operations.
- Selling, General and Administrative Expenses (SG&A), excluding impairments
- SG&A expenses, excluding impairments, remain fairly stable as a percentage of net sales, fluctuating around -22.5% to -23.15%. This consistency indicates controlled operating expenses relative to sales.
- Goodwill and Receivable Impairments
- Significant goodwill impairment is noted in the periods ending February 2, 2019, and February 1, 2020, with a notable impact of -11.95% and -1.33% of net sales respectively. Additionally, a small receivable impairment was recorded in February 3, 2018, at -0.08%. These impairments considerably increased total SG&A expenses in 2019, reflected by the spike to -34.56% of net sales that year.
- Total Selling, General and Administrative Expenses
- Total SG&A expenses, including impairments, peaked sharply in 2019 due to goodwill impairment but normalized in subsequent years to levels consistent with the costs excluding impairments.
- Operating Income
- Operating income shows considerable volatility, peaking at 8.99% in 2018, plunging to a negative -4.12% in 2019 largely due to impairments, and recovering in subsequent years to moderate levels between 5.35% and 7.40%. This pattern underscores the significant detrimental effect of impairment charges followed by operational recovery.
- Interest Expense
- Interest expense relative to net sales decreases steadily from -1.81% to around -0.58% to -0.69% in the latest years, suggesting improved debt management or refinancing benefits reducing the cost of financing.
- Other Income (Expense), Net
- Other income and expense remain negligible throughout the periods, hovering around zero, indicating minimal effect on overall profitability.
- Income Before Taxes
- Income before taxes follows a trend similar to operating income, with a peak of 7.66% in 2018, a decline to negative -5.74% in 2019 and a recovery to above 6% in the latest periods, reflecting operational performance after considering interest and other expenses.
- Provision for Income Taxes
- The tax provision displays variability, with a small positive value in 2018 but generally remains a negative value relative to net sales, fluctuating between -0.05% and -1.56%. The variability may indicate changes in tax strategy or jurisdictional earnings mix.
- Net Income
- Net income trends mirror operating and pre-tax income, reaching a high of 7.71% in 2018, a loss of -6.97% in 2019 due in part to impairment charges, followed by recovery to levels around 5.05% in the most recent year. This demonstrates resilience and profitability recovering following a significant impairment-related setback.