Dollar Tree 2006 Annual Report Download - page 15

A WARNING ABOUT FORWARD-LOOKING STATEMENTS:
This Annual Report contains “forward-looking state-
ments” 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 including words such as “believe,” “anticipate,”
“expect,” “intend,” “plan,” “view,” “target” or
“estimate.” For example, our forward-looking state-
ments include statements regarding:
• our anticipated sales, including comparable store
net sales, net sales growth and earnings growth;
• 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
2007 and beyond;
• the effect of a slight shift in merchandise mix to
consumables and the increase of freezers and
coolers 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 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 relat-
ing to the length of the holiday selling seasons;
• 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;
DOLLAR TREE STORES, INC. • 2006 ANNUAL REPORT 13
MANAGEMENT’S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
• the capacity, performance and cost of our
distribution centers, including opening and
expansion schedules;
• our expectations regarding competition and
growth in our retail sector;
• costs of pending and possible future legal claims;
• management’s estimates associated with our
critical accounting policies, including inventory
valuation, accrued expenses, and income taxes;
• the possible effect on our financial results of
changes in generally accepted accounting principles
relating to accounting for income tax uncertainties.
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
discussions in the “Risk Factors” and “Business”
sections in our Annual Report on Form 10-K filed
on April 4, 2007. Also see our “Management’s
Discussion and Analysis of Financial Condition and
Results of Operations” which begins on the next page.
• Our profitability is especially vulnerable to
cost increases.
• Our profitability is affected by the mix of
products we sell.
• We may be unable to expand our square footage
as profitably as planned.
• A downturn in economic conditions could
adversely affect our sales.
• Our sales and profits rely on imported merchan-
dise, which may increase in cost or become
unavailable.
• We could encounter disruptions or additional
costs in receiving and distributing merchandise.
• Sales below our expectations during peak seasons
may cause our operating results to suffer materially.
• Pressure from competitors may reduce our sales
and profits.