Dollar Tree 2009 Annual Report Download - page 15

Management’s Discussion And Analysis Of Financial Condition
And Results Of Operations
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 including 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฀2010฀
and beyond;
•฀฀the฀effect฀of฀a฀slight฀shift฀in฀merchandise฀mix฀to฀
consumables and the increase in the number of
our฀stores฀with฀freezers฀and฀coolers฀on฀gross฀prot฀
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฀operating฀
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฀protability,฀including฀the฀possible฀effect฀
of future changes in minimum wage rates, shipping
rates, domestic and import freight costs, fuel costs
and฀wage฀and฀benet฀costs;
•฀฀our฀gross฀prot฀margin,฀earnings,฀inventory฀levels฀
and ability to leverage selling, general and adminis-
trative฀and฀other฀xed฀costs;
•฀฀our฀seasonal฀sales฀patterns฀including฀those฀relating฀
to the length of the holiday selling seasons and the
effect฀of฀an฀earlier฀Easter฀in฀2010;
•฀฀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฀distribu-
tion centers;
•฀฀our฀cash฀needs,฀including฀our฀ability฀to฀fund฀our฀
future capital expenditures and working capital
requirements;
•฀฀our฀expectations฀regarding฀competition฀and฀growth฀
in our retail sector; and
•฀฀management’s฀estimates฀associated฀with฀our฀critical฀
accounting policies, including inventory valuation,
accrued expenses, income taxes and the anticipated
non-cash฀charge฀to฀gross฀prot฀in฀the฀rst฀quarter฀
of฀2010.
For a discussion of the risks, uncertainties and
assumptions that could affect our future events,
developments 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฀led฀on฀
March฀19,฀2010.฀Also฀see฀our฀“Management’s฀Discussion฀
and Analysis of Financial Condition and Results of
Operations.”
•฀฀Our฀protability฀is฀vulnerable฀to฀cost฀increases.
•฀฀Litigation฀may฀adversely฀affect฀our฀business,฀
nancial฀condition฀and฀results฀of฀operations.
•฀฀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.
•฀฀We฀may฀be฀unable฀to฀expand฀our฀square฀footage฀as฀
protably฀as฀planned.
•฀฀Sales฀below฀our฀expectations฀during฀peak฀seasons฀
may cause our operating results to suffer materially.
•฀฀Our฀sales฀and฀prots฀rely฀on฀imported฀merchandise,฀
which may increase in cost or become unavailable.
•฀฀A฀downturn฀in฀economic฀conditions฀could฀impact฀
our sales.
•฀฀Our฀protability฀is฀affected฀by฀the฀mix฀of฀products฀
we sell.
•฀฀Pressure฀from฀competitors฀may฀reduce฀or฀sales฀and฀
prots.
•฀฀The฀price฀of฀our฀common฀shares฀as฀traded฀on฀the฀
Nasdaq Global Select Market may be volatile.
•฀฀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.
฀฀฀DOLLAR฀TREE,฀INC.฀•฀2009฀Annual฀Report฀฀฀13