Dollar Tree 2006 Annual Report Download - page 4

2DOLLAR TREE STORES, INC. • 2006 ANNUAL REPORT
L
ast year, I ended my letter to you with the comment, “the best is
yet to come.” I am proud to report to you that 2006 lived up to
those expectations. At Dollar Tree Stores, 2006 was a year of achieving
new milestones and continued progress on our goals. We celebrated
our 20th anniversary with a solid and consistent performance through-
out the year. In true Dollar Tree fashion, we opened our 3,000th store
and “blew” past that milestone ending the year with over 3,200 stores
in our portfolio. Total revenues were just shy of $4 billion dollars,
another milestone that we are sure to exceed in 2007. We leveraged
our investments in new stores, retail technology and logistics by
delivering increased merchandise excitement to our customers, with
improved assortments, a higher in-stock position in basic products,
and a more efficient flow of inventory. As a result, our comparable-
store sales grew by 4.6%, and we achieved double-digit increases —
and all-time record levels — in revenues, earnings per share and
square footage. And yes, I believe “the best is still to come.”
Dollar Tree is a unique and proven retail concept. We are a
large company, national in scope and at each Dollar Tree store —
Everything is $1! We have a long history of profitable growth, building
a solid, scalable infrastructure and strong relationships along the way.
This strong foundation, one that has been nurtured over the past 20
years, will provide leverage for continued profitable growth and will strengthen
as we grow to an even higher scale. Our world-wide sourcing relationships, merchandising skills, logis-
tics capabilities and retail technology, proven and improved over time, enable us to provide surprising
value to our customers. We remain focused on our customers’ needs and we believe that they want
great value and a great shopping experience. That means we put a premium on running stores that are
bright, clean and inviting. Our store associates are friendly and strive to thrill our customers every day
by exceeding their expectations with products that represent surprising value. The more we deliver
this “WOW factor,” the more our customers will come back.
REVIEW OF 2006 GOALS AND ACCOMPLISHMENTS
Our primary goal for 2006, and indeed every year, is to grow the top line while delivering sector
leading profitability. We accomplished this in 2006 through a combination of new store
openings and improved productivity of existing stores. It’s all about the stores and the mer-
chandise; this is the key to the Dollar Tree extreme value proposition. A Dollar Tree store
offers a wide assortment of variety merchandise at incredible values. Our merchandise
strategy provides a mix of branded product, including well-known national
brands, popular regional brands, exclusive Dollar Tree brands, and an
ever-changing mix of exciting seasonal merchandise and high value
closeouts. It is our prime goal to create merchandise excitement for
our customers, every time they visit our store.
This year our merchants, working with our planning, alloca-
tions and replenishment department, did an outstanding job of
planning assortments and giving the right amount of product to the
stores as needed. Seasonal transitions were crisp.
TO OUR SHAREHOLDERS
Bob Sasser
President and
Chief Executive Officer