Dollar Tree sells inexpensive household goods, food, party supplies and other merchandise through its U.S. and Canadian stores. In its second quarter of fiscal 2026, ended August 1, operating profit reached $690.1 million, helped by $368.7 million of tariff refunds recorded against merchandise costs. The business also improved after removing that benefit, giving management room to fund price reductions and better stores. The next test is whether those investments bring more shoppers through the doors as the sales-growth benefit from earlier price increases fades.
Research cutoff: October 17, 2026, New York time. Company financial results and guidance verified here are dated August 27, 2026; the later legal record and limits of that update are identified below.
Source: Dollar Tree, second-quarter fiscal 2026 Form 10-Q, income statements, pp. 4–5; Note 3, pp. 11–12; management discussion, pp. 22–26.
1. The refund explains most of the profit jump, but store economics also improved
Operating profit increased even after removing the tariff refund. Operating profit is what remains after merchandise and running costs, before financing costs and income tax. Dollar Tree recorded the repayment of earlier import taxes as a reduction in the cost of merchandise sold. That increased profit without requiring an additional sale during the quarter.
The gross refund accounted for about 80% of the $459.1 million increase in quarterly operating profit. Subtracting it leaves calculated operating profit of $321.4 million, up 39.1% from $231.0 million a year earlier. This narrow calculation leaves all current costs in place, including spending associated with the refund and newly recorded import duties. It is useful for testing whether improvement extended beyond the refund; it is not a measure of permanently recurring profit.
| Continuing operations; USD millions except percentages and EPS | Second quarter 2025 | Second quarter 2026 | First half 2025 | First half 2026 |
|---|---|---|---|---|
| Merchandise net sales | 4,566.8 | 4,886.5 | 9,203.3 | 9,857.0 |
| Gross profit | 1,570.1 | 2,094.3 | 3,219.6 | 3,923.8 |
| Gross profit margin | 34.4% | 42.9% | 35.0% | 39.8% |
| Operating profit | 231.0 | 690.1 | 615.1 | 1,163.4 |
| Operating profit margin | 5.1% | 14.1% | 6.7% | 11.8% |
| Profit after tax from continuing operations | 155.5 | 514.5 | 469.0 | 861.8 |
| Profit margin after tax, continuing operations | 3.4% | 10.5% | 5.1% | 8.7% |
| Diluted profit per share (EPS), continuing operations, USD | 0.75 | 2.70 | 2.22 | 4.44 |
Reporting basis: Each quarter covers 13 weeks and each first half covers 26 weeks. The periods end August 2, 2025 and August 1, 2026. A margin shows the percentage of sales or revenue left as profit. Gross margin uses merchandise net sales; operating and after-tax margins use total revenue, which also includes a small amount of other revenue. Family Dollar is excluded from continuing operations in both years.
Source: 2026 Form 10-Q, pp. 4 and 15; management discussion, pp. 24–26.
Dollar Tree retained more profit from each sales dollar for several reasons. Management reported lower tariff costs during the quarter, fewer inventory losses found during physical counts, and occupancy costs spread across higher sales. Store payroll also benefited because work needed for the prior year’s price changes and temporary staffing for the multi-price rollout did not repeat at the same level. These are concrete improvements, although avoiding last year’s temporary costs produces a different kind of benefit from attracting new customers.
There were offsets. Customers bought a greater share of lower-margin everyday goods. Dollar Tree recorded $22 million of markdowns associated with its refund reinvestment initiative and a $13 million charge for additional duties on paper plates and aluminum pans. Marketing and depreciation—the gradual charging of store and equipment costs against profit—also increased. Removing only the gross refund leaves an operating margin of approximately 6.6%, well below the reported 14.1% but above the prior year’s 5.1%.
Source: 2026 Form 10-Q, management discussion, pp. 25–26. Calculation notes below reproduce the refund subtraction.
The earnings release adds two details: approximately $14 million of interest accompanied the refund, and $15 million of reinvestment expense appeared in selling and administrative costs. Management estimates that the refund, related reinvestment expenses and specified duties together added $1.31 to quarterly EPS after tax. Its published adjusted EPS still includes that benefit. The word “adjusted” therefore does not remove the main unusual source of this quarter’s profit.
Source: Dollar Tree, August 27, 2026 earnings release, p. 1, footnote 1, and non-GAAP reconciliations, pp. 13–14.
2. Bigger baskets are doing more work than additional visits
Sales growth remains more dependent on spending per visit than on shopper traffic. Quarterly merchandise sales rose 7.0%. At stores included in the company’s comparable-store measure, sales increased 3.7%, combining a 3.3% increase in average spending per transaction with a 0.4% increase in traffic.
Management attributes the bigger transaction to price changes made in the second and third quarters of 2025 and a greater contribution from merchandise offered at multiple price points. The disclosed measure tracks dollars spent per transaction; the company does not provide a comparable count of individual items purchased.
| Dollar Tree comparable-store changes, year over year | Second quarter 2024 | Second quarter 2025 | Second quarter 2026 |
|---|---|---|---|
| Sales | 1.3% | 6.5% | 3.7% |
| Customer traffic | 1.4% | 3.0% | 0.4% |
| Average spending per transaction | −0.1% | 3.4% | 3.3% |
Reporting basis: These are Dollar Tree store measures, excluding Family Dollar. The respective quarters ended August 3, 2024, August 2, 2025 and August 1, 2026. Dollar Tree generally includes stores after their first 15 months of operation. The figures describe each year’s eligible store group, rather than one unchanged group tracked across all three years.
Sources: Dollar Tree, September 4, 2024 earnings release, “Second Quarter Results”; 2026 Form 10-Q, pp. 21 and 24.
The current quarter’s positive traffic is encouraging because traffic for the entire first half was still down 0.3%. The historical comparison also shows why management cannot rely indefinitely on earlier price changes: spending per visit remained strong, while traffic growth was much smaller than in either preceding second quarter. As the company compares against periods that already contain the higher prices, a larger contribution must come from visits, assortment changes or further spending per transaction to sustain the same sales growth.
Newer locations also contributed. Stores outside the comparable group generated $225.9 million of quarterly sales. That amount is their current sales, not a separately measured year-over-year growth contribution. Across the chain, trailing-52-week sales per selling square foot rose from $237 to $243, an increase of about 2.5%. This supports improving use of selling space, alongside expansion in the store count.
Source: 2026 Form 10-Q, pp. 21–24.
The merchandise mix gives a second test of the sales improvement. Everyday consumables supplied roughly two-thirds of the dollar increase in quarterly sales. Variety merchandise also grew, but more slowly, and seasonal sales declined.
| Merchandise sales; USD millions | Second quarter 2025 | Second quarter 2026 | Calculated change |
|---|---|---|---|
| Consumables | 2,311.0 | 2,521.7 | 9.1% |
| Variety | 2,236.0 | 2,347.7 | 5.0% |
| Seasonal | 19.8 | 17.1 | −13.6% |
Consumables rose to 51.6% of sales from 50.6%. Management specifically identified weaker sales of high-margin discretionary merchandise as a drag on gross margin. More everyday shopping can support frequent visits, but it must generate enough additional business to compensate for the lower profit retained from each sales dollar. Helium shortages also hurt quarterly sales, showing that product availability contributed to the sales pressure.
Source: 2026 Form 10-Q, Note 8, p. 16, and management discussion, pp. 24–25.
Dollar General offers useful competitive context. For its quarter ended July 31, 2026, it reported comparable sales growth of 3.5%, including 2.0% traffic growth and 1.5% higher average transaction value. Its stronger traffic contribution shows that Dollar Tree’s weak visit growth was not universal across discount retail. Differences in merchandise and store locations prevent that comparison from proving a transfer of market share, but it strengthens the case for Dollar Tree to compete for visits rather than depend mainly on higher prices.
Source: Dollar General, August 27, 2026 earnings release, “Second Quarter Fiscal Year 2026 Overview.”
3. Reinvestment has a clear purpose, and its costs arrive before the full benefits
Dollar Tree is spending part of the refund to improve the offer customers see in stores. Management describes targeted pricing, marketing, better store conditions and operating improvements as ways to strengthen value, convenience and product discovery. It also plans approximately $40 million for a philanthropic fund supporting employees and local communities; that is a separate use of the proceeds from commercial improvements.
Price markdowns reduce profit immediately. Extra labor and marketing also cost money before any resulting increase in visits is established. The filing expects more reinvestment costs in the third and fourth quarters, along with higher freight expense. Consequently, the second quarter’s unusually high margin is a poor starting point for projecting the rest of the year.
Source: 2026 Form 10-Q, “Strategic Initiatives and Recent Developments,” pp. 22–23, and cost discussion, p. 25.
The broader assortment is intended to give shoppers access to larger packs, complementary products and selected branded goods that could not fit the original single-price model. Approximately 6,600 stores had the multi-price format by quarter-end. The opportunity is to make a trip more useful while preserving an obvious low-price offer. The sales evidence so far supports higher transaction value more clearly than a large increase in visits.
Source: 2026 Form 10-Q, p. 22; August 27 earnings release, p. 1, “Additional Business Highlights.”
Expansion continues alongside that work. Dollar Tree opened 188 stores and closed 34 in the first half, ending with 9,436 stores. That was 3.1% more locations than a year earlier. Cash capital spending was $498.8 million, nearly unchanged from $493.9 million, and supported stores, distribution capacity and other systems. Net property and equipment rose $141.3 million from fiscal year-end to $5.10 billion.
Two distribution projects have identifiable purposes. The Phoenix-area facility began outbound deliveries to approximately 700 stores in May 2026. Reconstruction at Marietta, Oklahoma, is intended to restore and improve capacity after the earlier tornado, with operations expected by spring 2027 and capacity for approximately 700 stores. Management expects a more resilient network, while acknowledging that bringing capacity into use can temporarily reduce gross margin. The spending therefore supports both rebuilding lost capacity and extending the network.
Source: 2026 Form 10-Q, balance sheet, p. 6; store activity, p. 21; distribution plans, p. 23; liquidity discussion, p. 27.
The August guidance called for full-year sales of $20.5 billion to $20.7 billion, comparable-store growth of 3% to 4%, and approximately 400 openings and 75 closures. With 188 openings completed, another 212 would be needed in the second half to reach management’s opening goal.
Source: August 27 earnings release, “Fiscal 2026 Outlook,” p. 4.
4. Cash improved sharply, but refunds and payment timing explain much of the change
The business generated enough cash for capital spending, while buybacks used more than the remainder. First-half operating cash from continuing operations reached $1,565.5 million, compared with $639.2 million a year earlier. The improvement gave Dollar Tree substantially more capacity to fund its plans, but several contributors should be separated from ordinary sales growth.
The company received approximately $383 million of tariff refunds and related interest. It also paid less cash tax, which management links to tax benefits from the 2025 Family Dollar sale. Suppliers were paid on a different schedule, and less cash was tied up in inventory. Those changes increased cash available during the period even though they do not represent additional current-period customer purchases.
| Continuing operations and corporate cash allocation; USD millions | First half 2025 | First half 2026 |
|---|---|---|
| Operating cash flow | 639.2 | 1,565.5 |
| Capital spending, shown as a positive use of cash | 493.9 | 498.8 |
| Free cash flow: operating cash less capital spending | 145.3 | 1,066.7 |
| Cash payments for share repurchases | 924.2 | 1,208.9 |
| Remainder after capital spending and repurchases | −778.9 | −142.2 |
Calculation notes: Free cash flow is a non-GAAP cash measure using cash capital expenditures from the continuing-operations cash-flow statement. It excludes acquisition or disposal proceeds and does not include unpaid capital purchases. The repurchase row uses cash actually paid, rather than the amount recorded in equity. No cash dividends were reported in either first half.
Source: 2026 Form 10-Q, cash-flow statement, p. 9, and liquidity discussion, pp. 27–28.
The supplier-payment effect was substantial. In 2026, the change in accounts payable added $97.2 million to operating cash; in 2025, it used $114.0 million. That $211.2 million improvement means more of the business’s purchases remained unpaid at the reporting date relative to the prior-year cash-flow pattern. Management attributes the inventory and supplier-balance changes to payment and receipt timing, together with efforts to make better use of shelf space.
Inventory ended at $2,452.2 million, down 8.6% from a year earlier despite the larger store network. Inventory changes released $40.2 million of operating cash in the first half, against a $7.4 million use a year earlier. Lower inventory is helpful when goods continue to reach the shelf as needed; combined with the helium shortage, it also makes product availability an important part of evaluating the reduction.
Suppliers can choose to receive early payment from a bank under Dollar Tree’s supplier-finance program. The company still owes payment on its original schedule. Obligations in that program were $305.6 million, almost unchanged from $305.1 million at year-end. The increase in total supplier balances therefore was not explained by a large expansion of this program.
Source: 2026 Form 10-Q, pp. 6 and 9; Note 9, p. 16; liquidity discussion, p. 27.
Taxes require similar care. First-half tax expense was $287.0 million, while cash tax payments were $95.8 million. The cash-flow statement adds back $193.9 million of deferred tax expense—tax recognized in profit that does not represent a current cash payment. Deferred tax liabilities also rose substantially. These timing effects are already included in reported operating cash flow. The lower cash-tax payment helps fund the business now, while the higher deferred-tax liability represents tax obligations recognized for future periods.
Source: 2026 Form 10-Q, pp. 4, 6 and 9, and p. 27.
5. Borrowing preserved cash while repurchases reduced the share count
Dollar Tree retained substantial liquidity, but its financing debt increased. Cash and cash equivalents rose from $717.8 million at January 31 to $1,058.1 million at August 1. A new $500 million term loan helped support the overall combination of investment, repurchases and a higher cash balance.
The quarter-end debt principal was $2.95 billion. After subtracting unrestricted cash, calculated net financing debt was $1.89 billion, up approximately $160 million from fiscal year-end. This measure excludes lease obligations. Thus, the larger cash balance did not represent an equivalent improvement in the company’s position after financing debt.
Management says its capital priorities include business investment, financial flexibility and returning excess capital. The June repurchase included a $500 million block transaction involving selling shareholders associated with Mantle Ridge. Management said that transaction would use cash on hand. At the broader first-half level, total repurchases exceeded free cash flow, and the company also borrowed. The remaining $2.49 billion repurchase authorization was optional and had no expiration date, giving management flexibility over further cash returns.
Sources: 2026 Form 10-Q, pp. 6, 9, 12, 14 and 28; Dollar Tree’s June 25 block-trade announcement and July 2 repurchase authorization.
| Financing obligations outstanding at August 1, 2026 | Principal, USD millions | Contractual interest basis | Maturity |
|---|---|---|---|
| Senior notes | 1,250.0 | 4.20% fixed | May 2028 |
| Term loan | 500.0 | Initially the SOFR benchmark rate plus 1.00 percentage point | March 19, 2029 |
| Senior notes | 800.0 | 2.65% fixed | December 2031 |
| Senior notes | 400.0 | 3.375% fixed | December 2051 |
The fixed-rate notes require $87.2 million of annual coupon interest before any refinancing. The term loan’s benchmark rate varies, and the extra rate charged above that benchmark can change with credit ratings and debt measures. There are no scheduled principal maturities in fiscal 2026 or 2027; approximately 59% of principal comes due in 2028–2029. That concentration makes retaining future cash or arranging refinancing more important as those dates approach.
Sources: Dollar Tree, fiscal 2025 Form 10-K, Note 6, pp. 56–57; 2026 Form 10-Q, Note 4, p. 12. The annual note schedule is updated for the new term loan and the absence of first-half principal repayments.
Dollar Tree also had an undrawn $1.5 billion revolving facility. Its commercial-paper program uses that facility as a repayment backstop, so the two should not be counted as separate $1.5 billion pools of committed funding. The smaller, temporary $1 billion revolver expired in March. Seasonal cash needs typically peak in September and October, after this quarter-end balance sheet.
The new term loan limits debt relative to a contract-defined earnings measure to 3.75 times, with a conditional acquisition-related increase permitted. It also requires that the earnings measure cover interest and rent at least twice. The debt test includes operating leases, and the earnings definition adds back rent and specified expenses. Dollar Tree reported compliance at August 1; these contractual definitions determine how close the company is to its borrowing limits.
Sources: 2026 Form 10-Q, pp. 12 and 27–28; March 19, 2026 term-loan agreement, definitions in Section 1.01 and financial covenants in Section 5.03.
Rent is a further ongoing claim on cash. Operating lease liabilities totaled $4,737.3 million, including $1,011.0 million classified as due within a year. The related right to use leased properties and equipment rose to $4,559.1 million as the business continued adding and renewing leases. These commitments are separate from financing debt, but store sales must support both occupancy costs and financing costs.
Repurchases also changed how profit is divided among shares. The quarterly average share count used for diluted EPS, which includes potential shares from employee awards, fell 8.1% to 190.9 million. At the prior year’s share count, current profit would have produced approximately $2.48 per share, versus the reported $2.70. Roughly $0.22 of that difference reflects fewer shares, rather than additional company profit. Employee awards partly offset repurchases: first-half stock compensation expense was $40.7 million, and the exact issued-and-outstanding share count fell by about 10.8 million against 11.1 million shares repurchased.
Source: 2026 Form 10-Q, pp. 6–9 and Note 6–7, p. 14. Share and equity calculations appear below.
6. Family Dollar’s sale simplifies the business without ending every obligation
Dollar Tree’s remaining business is more focused, while temporary service income and retained risks still matter. Family Dollar was sold on July 5, 2025. The current filing presents one reportable segment and recasts the comparison year accordingly. Canada is not material enough to require a separate geographic earnings analysis.
The continuing-business comparison excludes Family Dollar’s own results but retains corporate costs that were not directly attributable to it. Reducing those remaining costs is part of making Dollar Tree operate efficiently on its own.
Dollar Tree and Family Dollar continue providing services to each other under an agreement lasting 18 months from the sale. Net transition-service income contributed $38.8 million in the current first half, compared with $8.0 million in the prior-year period. Costs supporting those services remain in selling and administrative expense. As the agreement ends around early 2027, reimbursement income falls away, while the ability to remove related costs will determine the net effect on profit.
Source: 2026 Form 10-Q, Note 1, p. 10; Note 8, p. 15; Note 10, pp. 16–17; expense discussion, p. 25.
The company also guarantees specified Family Dollar store leases: $20 million in the second year after the sale and $10 million in the third. It retained obligations to defend and indemnify Family Dollar in certain cases, including claims concerning talc and acetaminophen products sold before the transaction. For litigation where losses were considered reasonably possible, the company could not estimate a loss range. Those cases therefore remain potential calls on cash beyond the amounts already recorded.
Import duties present a more defined financial risk. Beyond the $13 million already charged, Dollar Tree estimated possible retroactive exposure of up to approximately $11 million for aluminum pans and $15 million for paper plates. These relate to whether goods assembled in other countries using Chinese inputs circumvented existing trade-duty orders. Moving assembly to another country therefore does not necessarily remove the duty risk.
At filing, management did not consider losses from those retroactive duties probable. The stated final-determination deadlines were August 31 for the pan cases and October 14 for the plate cases. Final decisions after the filing were not verified in this review, so those estimates remain explicitly filing-date assessments. A separate proceeding initiated in August concerning aluminum pans from Malaysia and Indonesia was not quantified.
Source: 2026 Form 10-Q, Note 3, pp. 11–12, and Note 10, p. 16.
The sourcing exposure is meaningful: direct imports typically represented about 40% of purchases measured at retail value, with China supplying the vast majority of direct imports. Management’s responses include supplier negotiations, product redesign, alternative sourcing, removing weaker products and targeted pricing. Those actions can protect margins, but their success also depends on keeping an assortment that customers want to buy.
Sources: Fiscal 2025 Form 10-K, Item 1, “Merchandise”; 2026 Form 10-Q, “Agile Cost Management,” p. 22.
A subsequent court-docket record confirms that Fennessy et al. v. Dollar Tree, Inc. et al. was filed on September 3, 2026. The verified docket snapshot runs only through September 4 and establishes the filing, not liability or a damages amount. The full complaint and subsequent case outcome were not verified, so no additional financial loss is assigned here.
Source: U.S. District Court, Eastern District of Virginia, case 2:26-cv-00932, docket entries reproduced by Justia, complaint entry dated September 3, 2026; snapshot retrieved by the provider September 4, 2026.
7. The next stage depends on turning spending into repeat visits
Dollar Tree has a stronger operating base and the cash to improve stores, but the refund itself is a finite benefit. Profit improved after removing the gross refund, selling-space productivity increased, and inventory used less cash. These findings support management’s ability to keep expanding and improve the shopping experience.
The decisive condition is customer response. Stronger visits and a healthier contribution from discretionary merchandise would show that pricing, assortment and store work are producing benefits beyond last year’s price changes. If traffic remains weak, additional markdowns and marketing can consume the refund without generating enough new profit to replace it.
Capital allocation determines how much room the company retains for that work. Buybacks reduced the share count and raised per-share earnings, but exceeded first-half cash left after capital spending. With borrowing higher, seasonal cash needs ahead and sizeable maturities in 2028–2029, the pace of future repurchases should be assessed against cash generated after reinvestment and operating needs. Dollar Tree’s business progress is real; the next improvement must increasingly come from more productive stores and repeat shopping, rather than another large refund.
Sources: 2026 Form 10-Q, pp. 9, 21–28; financing schedule and supporting sources in Section 5. This conclusion draws together the verified results and management’s stated plans above.
Reporting basis and calculation notes
Reporting basis: Dollar Tree, Inc., ticker DLTR, CIK 0000935703; Form 10-Q, accession 0000935703-26-000109, filed August 27, 2026. The second quarter covers May 3–August 1, 2026; the first half covers February 1–August 1, 2026. Comparisons cover May 4–August 2, 2025 and February 2–August 2, 2025. Fiscal 2026 ends January 30, 2027. Amounts are U.S. dollars and consolidated U.S. GAAP unless explicitly labelled otherwise. Intercompany balances are eliminated; Family Dollar is treated as discontinued operations. The interim statements are unaudited.
Source: SEC accession directory and 2026 Form 10-Q, cover, financial statements and Note 1. The filing’s machine-readable financial data were checked against the displayed consolidated accounts, including currency, units and reporting dates.
Calculation notes — profit and margins: All amounts in this paragraph are USD millions. Quarterly sales growth is 4,886.5 ÷ 4,566.8 − 1 = 7.0%; first-half growth is 9,857.0 ÷ 9,203.3 − 1 = 7.1%. Operating profit excluding only the gross refund is 690.1 − 368.7 = 321.4 for the quarter, versus 231.0, and 1,163.4 − 368.7 = 794.7 for the first half, versus 615.1. The respective increases are 39.1% and 29.2%. Quarterly margin on this calculated basis is 321.4 ÷ 4,891.2 = 6.6%. This is a pretax operating calculation: refund interest and income taxes sit outside it. The gross refund’s share of reported operating-profit growth is 368.7 ÷ (690.1 − 231.0) = 80.3%.
Source: 2026 Form 10-Q, pp. 4 and 25.
Calculation notes — management’s adjusted profit: The following reproduces the company’s reconciliation. It shows why adjusted profit still contains the tariff-refund benefit. Tax adjustments are the company’s amounts, not estimates obtained by applying one blanket tax rate.
| Continuing profit after tax; USD millions | Second quarter 2025 | Second quarter 2026 | First half 2025 | First half 2026 |
|---|---|---|---|---|
| Reported profit | 155.5 | 514.5 | 469.0 | 861.8 |
| Add strategic-review costs before tax | 5.0 | 0.0 | 8.7 | 0.0 |
| Remove insurance gain before tax | 0.0 | 0.0 | −61.8 | −5.2 |
| Company’s income-tax adjustment | −1.3 | 0.0 | 13.0 | 1.3 |
| Adjusted profit, non-GAAP | 159.2 | 514.5 | 428.9 | 857.9 |
The first-half 2025 insurance adjustment is $61.8 million in this reconciliation; the filing separately describes the insurance gain as approximately $62 million. The exact adjustment above is used for the bridge.
Source: August 27 earnings release, “Reconciliation of Adjusted Income from Continuing Operations,” p. 14.
Calculation notes — profit to operating cash: This table groups the cash-flow statement so readers can see why cash differed from profit. “Other noncash items” includes stock compensation, impairments, insurance-gain removal where applicable and the filing’s other noncash adjustments. “Operating balances” covers inventory, suppliers, taxes, other operating assets and liabilities, and the net lease adjustment.
| Continuing operations; USD millions | First half 2025 | First half 2026 |
|---|---|---|
| Profit after tax | 469.0 | 861.8 |
| Depreciation and amortization | 313.1 | 356.8 |
| Deferred tax expense | 158.7 | 193.9 |
| Other noncash items | 5.3 | 63.7 |
| Changes in operating balances | −306.9 | 89.3 |
| Operating cash flow | 639.2 | 1,565.5 |
Calculation notes — cash balance: This reconciliation includes money restricted for particular uses as well as ordinary cash. Each flow below is already net of its related receipts and payments.
| First half 2026 cash reconciliation; USD millions | Amount |
|---|---|
| Opening cash including restricted cash | 760.7 |
| Cash from operations | 1,565.5 |
| Cash used for investing | −499.8 |
| Cash used for financing | −723.8 |
| Currency effect | −0.8 |
| Closing cash including restricted cash | 1,101.8 |
Closing cash comprises $1,058.1 million of cash and equivalents and $43.7 million of restricted cash. The financing outflow combines $500.0 million of borrowing and $3.8 million from employee share plans, less $18.7 million of employee-award tax withholding and $1,208.9 million of repurchases.
Prior-year investing cash included Family Dollar disposal proceeds. Discontinued operations also supplied $263.5 million of net cash, excluded from the continuing free-cash-flow comparison. Prior-year supplemental tax and interest payments include the sold business through disposal; they are not used as direct continuing-business comparisons.
Source: 2026 Form 10-Q, p. 9 and Note 11, p. 17.
Calculation notes — financial position: This table shows selected resources and obligations; totals include accounts not listed individually. Other current assets changed little, and the balance sheet does not separately present customer receivables. Goodwill—the remaining accounting value of past acquisition premiums—also changed little.
| Consolidated balances; USD millions | January 31, 2026 | August 1, 2026 |
|---|---|---|
| Cash and equivalents | 717.8 | 1,058.1 |
| Inventory | 2,495.4 | 2,452.2 |
| Other current assets | 233.0 | 234.3 |
| Property and equipment after depreciation | 4,959.6 | 5,100.9 |
| Rights to use leased assets | 4,435.1 | 4,559.1 |
| Goodwill | 423.2 | 422.1 |
| Financing debt, reported carrying value | 2,431.7 | 2,933.5 |
| Supplier payables | 1,530.7 | 1,626.5 |
| Operating lease liabilities | 4,623.9 | 4,737.3 |
| Deferred income-tax liabilities | 153.3 | 347.9 |
| Total assets | 13,466.2 | 14,029.6 |
| Total liabilities | 9,711.3 | 10,604.3 |
| Shareholders' equity | 3,754.9 | 3,425.3 |
The final three rows reconcile: liabilities plus equity equal assets at each date. Debt principal of $2,950.0 million exceeds its $2,933.5 million carrying value because the latter deducts discounts and issuance costs. The full lease schedule at January 31 showed $5,342.8 million of future payments. Discounting those payments to reflect their later payment dates reduced the recorded obligation by $718.9 million to $4,623.9 million. That older payment schedule is not an August 1 update.
Sources: 2026 Form 10-Q, p. 6 and Note 4; fiscal 2025 Form 10-K, Notes 6–7, pp. 56–58.
Calculation notes — equity and shares: Equity is the accounting amount left for shareholders after subtracting liabilities from assets. It fell because repurchases and their tax exceeded profit and employee-share additions. The table separates its main accounts; increases and decreases are both shown as positive amounts.
| First half 2026 equity accounts; USD millions | Opening | Increases | Decreases | Closing |
|---|---|---|---|---|
| Common stock at stated legal value | 2.0 | 0.0 | 0.1 | 1.9 |
| Additional paid-in capital | 0.0 | 25.8 | 25.8 | 0.0 |
| Retained earnings | 3,803.6 | 861.8 | 1,186.5 | 3,478.9 |
| Accumulated currency translation losses | −50.7 | 0.0 | 4.8 | −55.5 |
| Total equity | 3,754.9 | 887.6 | 1,217.2 | 3,425.3 |
Paid-in capital records amounts contributed through share issuance and awards. Its additions were $3.8 million from employee purchases and $22.0 million of stock compensation after withholding-related reductions. Repurchases used $13.6 million of that account, and excise tax used another $12.2 million, leaving it at zero. The $22.0 million net compensation amount reconciles to $40.7 million of expense less $18.7 million of employee-award tax withholding.
Retained earnings increased by the $861.8 million profit, then fell by the $1,186.5 million allocated to repurchases. Together, the reductions in retained earnings, paid-in capital and common stock represent $1,200.2 million of repurchases, before excise tax. There is no separate treasury-stock balance. These equity entries record purchases and tax obligations when recognized; the cash-flow statement records payments when made.
The exact share check is 198,505,205 opening issued-and-outstanding shares − 11,136,764 repurchased shares + 304,500 net additional shares = 187,672,941 closing shares.
For the illustrative quarterly EPS comparison, $514.5 million ÷ 207.8 million prior-year diluted shares = about $2.48, against approximately $2.70 using 190.9 million current diluted shares. This holds company profit constant to show the effect of dividing it among fewer shares.
Source: 2026 Form 10-Q, pp. 6–9 and Notes 6–7, p. 14.
This analysis is for information only and is not investment advice.