Dollar Tree 2008 Annual Report Download - page 15

Management’s Discussion & Analysis of Financial Condition and Results of Operations
DOLLAR TREE, INC. • 2008 ANNUAL REPORT 13
A WARNING ABOUT FORWARD-LOOKING STATEMENTS:
This document contains "forward-looking statements"
as that term is used in the Private Securities Litigation
Reform Act of 1995. Forward-looking statements
address future events, developments and results. They
include statements preceded by, followed by or includ-
ing words such as "believe," "anticipate," "expect,"
"intend," "plan," "view," “target” or "estimate." For
example, our forward-looking statements include
statements regarding:
• our anticipated sales, including comparable store
net sales, net sales growth and earnings growth;
• costs of pending and possible future legal claims;
• our growth plans, including our plans to add,
expand or relocate stores, our anticipated square
footage increase, and our ability to renew leases at
existing store locations;
• the average size of our stores to be added in 2009
and beyond;
• the effect of a slight shift in merchandise mix to
consumables and the increase in freezers and cool-
ers on gross profit margin and sales;
• the effect that expanding tender types accepted
by our stores will have on sales;
• the net sales per square foot, net sales and operat-
ing income attributable to smaller and larger
stores and store-level cash payback metrics;
• the possible effect of the current economic down-
turn, inflation and other economic changes on our
costs and profitability, including the possible
effect of future changes in minimum wage rates,
shipping rates, domestic and foreign freight costs,
fuel costs and wage and benefit costs;
• our cash needs, including our ability to fund our
future capital expenditures and working capital
requirements;
• our gross profit margin, earnings, inventory levels
and ability to leverage selling, general and admin-
istrative and other fixed costs;
• our seasonal sales patterns including those relating
to the length of the holiday selling seasons and
the effect of a later Easter in 2009;
• the capabilities of our inventory supply chain
technology and other new systems;
• the future reliability of, and cost associated with,
our sources of supply, particularly imported goods
such as those sourced from China;
• the capacity, performance and cost of our distri-
bution centers;
• our expectations regarding competition and
growth in our retail sector;
• management's estimates associated with our critical
accounting policies, including inventory valuation,
accrued expenses, and income taxes.
You should assume that the information appearing
in this annual report is accurate only as of the date it
was issued. Our business, financial condition, results
of operations and prospects may have changed since
that date.
For a discussion of the risks, uncertainties and
assumptions that could affect our future events, devel-
opments or results, you should carefully review the
risk factors summarized below and the more detailed
discussion in the “Risk Factors” and “Business” sections
in our Annual Report on Form 10-K filed on March 26,
2009. Also see our "Management’s Discussion and
Analysis of Financial Condition and Results of
Operations" which begins on the next page.
• A continued downturn in economic conditions
could adversely affect our sales.
• Our profitability is especially vulnerable to cost
increases.
• Changes in federal, state or local law, or our failure
to comply with such laws, could increase our
expenses and expose us to legal risks
• We could encounter disruptions or additional
costs in obtaining and distributing merchandise.
• Sales below our expectations during peak seasons
may cause our operating results to suffer materially.
• Our sales and profits rely on imported merchandise,
which may increase in cost or become unavailable.
• We may be unable to expand our square footage
as profitably as planned.
• Our profitability is affected by the mix of prod-
ucts we sell.
• Pressure from competitors may reduce our sales
and profits.
• Certain provisions in our articles of incorporation
and bylaws could delay or discourage a takeover
attempt that may be in a shareholder's best interest.
Our forward-looking statements could be wrong
in light of these and other risks, uncertainties and
assumptions. The future events, developments or
results described in this report could turn out to be
materially different. We have no obligation to publicly
update or revise our forward-looking statements after