Dollar Tree Inc (DLTR)
Profitability ratios
Return on sales
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 30.42% | 31.49% | 29.35% | 30.53% | 29.82% |
| Operating profit margin | -2.88% | 7.89% | 6.88% | 7.40% | 5.35% |
| Pretax margin | -3.23% | 7.45% | 6.20% | 6.82% | 4.65% |
| Net profit margin | -3.26% | 5.70% | 5.04% | 5.26% | 3.50% |
Dollar Tree Inc's profitability ratios, as indicated by its gross profit margin, operating profit margin, pretax margin, and net profit margin, have fluctuated over the past five fiscal years.
The gross profit margin has ranged from 29.35% to 31.49% during this period, with the latest figure standing at 30.42%. This metric reflects the company's ability to generate profit from its core operations after accounting for the cost of goods sold.
The operating profit margin, which indicates the company's profitability from its normal business activities, has varied widely from -2.88% to 7.89% over the same period. The negative figure in 2024 suggests that Dollar Tree Inc's operating expenses exceeded its operating income.
Similarly, the pretax margin and net profit margin have also shown fluctuations. The figures have ranged between -3.26% and 7.45% for the pretax margin and 3.50% to 5.70% for the net profit margin. The negative margins seen in 2024 imply that, after accounting for expenses and taxes, the company reported a loss in both operating and net profit.
Overall, the downward trend in profitability margins over the years indicates that Dollar Tree Inc may be facing challenges in maintaining its profitability and controlling its costs effectively.
Return on investment
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -4.00% | 9.71% | 8.34% | 9.12% | 6.45% |
| Return on assets (ROA) | -4.53% | 7.02% | 6.11% | 6.48% | 4.22% |
| Return on total capital | -8.21% | 18.37% | 16.27% | 17.96% | 12.91% |
| Return on equity (ROE) | -13.65% | 18.46% | 17.20% | 18.42% | 13.22% |
Profitability ratios provide insight into a company's ability to generate profits relative to its assets, capital, and equity. Looking at Dollar Tree Inc's profitability ratios over the last five years, we can make the following observations:
1. Operating Return on Assets (Operating ROA):
- Dollar Tree Inc's Operating ROA has been negative in the last two fiscal years, indicating that the company's core operations have not been efficient in generating profits relative to its total assets. The decline from a high of 9.71% in 2023 to -4.00% in 2024 is concerning and suggests a deterioration in operational performance.
2. Return on Assets (ROA):
- Similar to the Operating ROA, Dollar Tree Inc's ROA has also been negative in the last two years. This indicates that the company has not been effective in generating profits from its assets. The downward trend in ROA from 7.02% in 2023 to -4.53% in 2024 raises concerns about the overall profitability of the company.
3. Return on Total Capital:
- The Return on Total Capital for Dollar Tree Inc has also shown a negative trend, with a significant decline from 18.37% in 2023 to -8.21% in 2024. This indicates that the company's overall capital investment has not been yielding satisfactory returns in recent years, possibly due to challenges in operations or capital allocation.
4. Return on Equity (ROE):
- Dollar Tree Inc's Return on Equity has been volatile over the past five years, with a notable decline from 18.46% in 2023 to -13.65% in 2024. A negative ROE implies that the company's profitability in relation to shareholder equity has been unfavorable, suggesting potential issues with financial performance and shareholder value creation.
In summary, the declining trend of profitability ratios, especially in the most recent fiscal year, raises concerns about Dollar Tree Inc's efficiency in generating profits from its assets, capital, and equity. Further analysis of the underlying factors affecting profitability will be essential to understand and address the challenges faced by the company.