Dollar Tree 2012 Annual Report Download - page 19

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Management’s Discussion & Analysis of
Financial Condition and Results of Operations
Selling, General and Administrative Expenses.
Selling, general and administrative expenses, as a
percentageofnetsales,decreasedto24.1%for2011
comparedto24.8%for2010.edecreaseisprimarily
due to the following:
•Payrollexpensesdecreased45basispointsdueto
leveraging associated with the increase in comparable
store net sales in the current year, lower store
hourly payroll and lower incentive compensation
achievement.
•Depreciationdecreased25basispointsprimarily
due to the leveraging associated with the increase in
comparable store net sales in the current year.
Operating Income. Operating income margin was
11.8%in2011comparedto10.7%in2010.Excluding
the$26.3millionnon-cashadjustmenttobeginning
inventory,operatingincomemarginwas11.1%in2010.
Due to the reasons noted above, operating income
marginexcludingthischarge,improved70basispoints.
Income Taxes.Oureectivetaxratewas37.4%in2011
and36.9%in2010.
Fiscal year ended January 28, 2012 compared to
fiscal year ended January 29, 2011
Net Sales.Netsalesincreased12.7%,or$748.0million,
in2011comparedto2010,resultingfromsalesinour
newstoresanda6.0%increaseincomparablestorenet
sales.Comparablestorenetsalesarepositivelyaected
by our expanded and relocated stores, which we include
in the calculation, and, to a lesser extent, are negatively
aectedwhenweopennewstoresorexpandstoresnear
existing ones.
efollowingtablesummarizesthecomponents
ofthechangesinourstorecountforscalyearsended
January28,2012andJanuary29,2011.
January 28,
2012
January29,
2011
Newstores 278 235
Acquired stores —86
Expandedor
relocated stores 91 95
Closed stores (28) (26)
Ofthe2.4millionsellingsquarefootincreasein2011
approximately0.3millionwasaddedbyexpanding
existing stores.
Grossprotmarginwas35.9%in2011compared
to35.5%in2010.Excludingtheeectofthe$26.3
millionnon-cashbeginninginventoryadjustment,gross
protmarginremainedat35.9%.Improvementininitial
mark-up in many categories and occupancy and distribu-
tioncostleveragewereosetbyanincreaseinthemixof
higher cost consumer product merchandise and a smaller
reductionintheshrinkaccrualrateinscal2011thanin
scal2010.
2012AnnualReport17