Dollar Tree, Inc. (NASDAQ:DLTR) Q4 2022 Earnings Call Transcript

Rick Dreiling: So, there is two things, if I could maybe add to that. One, as it relates to the traffic, we saw a 40 basis point improvement in our traffic going from Q3 to Q4. We believe that is reflective of, one, quality of merchandising, the opportunities we are presenting. But also from a pricing perspective, the work that we have done, there has been a multipoint reduction against the market, if you will, in our pricing to gain parity as Mike €“ excuse me, as Rick had said, with respect to our competitive sets as well as widening the gap of grocery and convenience. So, the combination of those two things is very encouraging for us as it relates to improved traffic as well as being able to drive still ticket at those lower prices on a year-over-year basis.

And then as it relates to Family Dollar and its ability to generate greater levels of profitability, there is somewhat of a step function that’s going on right now with these accelerated investments. And it’s more exacerbated against Family Dollar P&L because of its overall unit economics versus that of Dollar Tree, as you well recognized. We believe that as we continue to drive greater productivity from a top line perspective, improve €“ simplify our stores and its operating procedures such that we can further leverage off of the existing base that we are building up, we believe that we will be able to drive higher levels of profitability. The last piece is from a margin perspective, gross margin perspective, the things that Larry is doing, we are talking about from a private label additions that, that will also help us from a gross margin.

So, top line sales, gross margin improvement and then leverage against some of these expenses that we are now incurring over the longer period of time.

Jeff Davis: If I could add one thing, I think the key takeaway on what has been said is there is no structural problems with either, it’s all fixable and we know how to fix it.

Simeon Gutman: Thanks.

Operator: Thank you, ladies and gentlemen. We have reached our allotment time. I will turn it over to Randy Guiler for final comments.

Randy Guiler: Sure, Dave. Thank you very much. Thank you for joining us on today’s call and have a good day. Take care.

Operator: Thank you. This concludes today’s conference call. Thank you for your participation. You may now disconnect.