Dollar Tree, Inc.: HQ Mgmt Meeting & G.O.L.D. Store Takes; Overweight Establishing $170 Price Target

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Dollar Tree, Inc.: HQ Mgmt Meeting & G.O.L.D. Store Takes; Overweight Establishing $170 Price Target

olume through the box with the company’s back-end

buying model sufficient to hold multi-year gross margins flat to FY26 levels alone. Two

Accelerating GPM Drivers By Our Work: (1) Supply Chain efficiency: targeting ~800

stores through a single DC relative to ~600 prior (w/ 2029 timeline by our work),

representing a more than 20% improvement in DC productivity by our math. In

addition, mgmt previously cited at the 10/15 Investor Day replacing legacy tech systems with

AI-enabled platforms to “flow product more reliably to stores, reduce out of stocks and

improve our cost structure at scale” & higher capacity/productivity within existing facilities

to increase the DC to Store ratio “with only limited capital investment”. (2) MPP Scale: CEO

Creedon cited scale opportunity with multi-price point volumes tied to appropriate lead-

times and knowledge today of customer reception per category relative to the initial year 1

rollout in 2019, which can lead to greater leverage with vendors as DLTR looks to scale

volumes of MPP product. In addition, recall, management cited at the 10/15 Investor Day

MPP items deliver higher margin dollars per item per basket, driving increasing fixed cost

leverage within the box (w/ the Halloween ’25 assortment as an example drove +25% higher

margin dollars despite selling 10% fewer units). (3) Shrink: Despite initial progress on

shrink seen within 1Q26, mgmt cited continued opportunity remaining with Shrink, noting

roughly 60% of product in the box is non-branded “private label-esque” carrying very little

“Street value” in a resale scenario and our estimates pointing to +80bps of Shrink recapture

opportunity relative to 2019 within gross margin.