Dollar Tree 2010 Annual Report Download - page 4

s Dollar Tree celebrates its Silver Anniversary, I am pleased to report
that the Company is strong, growing, and our values have never
been higher. Over the 25-year history of the Company, Dollar Tree
has grown consistently, in good times and tough times. In fact, the
Company has increased sales and earnings per share every year since becoming
public in 1995. In 2010, Dollar Tree once again achieved record results.
• Net sales were $5.88 billion; an increase of 12.4% over fi scal 2009.
• Comparable-store sales increased 6.3% on top of a 7.2% comparable-store
sales increase last year.
• Earnings in fi scal 2010 increased to a record $3.10 per share. This includes
a non-recurring, non-cash charge of $26.3 million, or $0.13 cents per share
relating to a change in retail inventory accounting which was recorded in the fi rst
quarter 2010.
• Excluding the charge:
• Earnings per share were $3.23 – an increase of 36.3% over 2009 reported EPS of $2.37, which was itself an
increase of more than 40% over the previous year.
• Operating margin was 11.1%, compared with operating margin of 9.8% in 2009. Dollar Tree’s operating margin
remains among the highest in the value retail sector.
• Operating income increased by $143.5 million,
• And Net income rose 29.1%, to $413.7 million.
In addition, in 2010, Dollar Tree:
• Expanded selling square footage 8.8%, opening 235 new stores, expanding or relocating 95 stores and acquiring 86
stores, providing new jobs and growth opportunities for our associates.
• Surpassed 4,000 stores in operation and ended the year with 4,101 stores.
• Achieved the highest new store productivity since 2002.
• Increased inventory turns for the sixth consecutive year, to 4.17 turns in 2010 compared with 4.06 turns in 2009.
• Opened a new Distribution Center in San Bernardino, on-time and on-budget.
• Expanded into Canada.
• Executed a 3-for-2 stock split, and
• Repurchased 9.3 million shares for $414.7 million.
These results were achieved through the efforts of thousands of Dollar Tree associates. They refl ect the underlying
strength of our model, our infrastructure, and our strategy. In an ever-changing environment, Dollar Tree continues to
fi nd ways to better serve our customers, operate more effi ciently and successfully compete in the marketplace.
Proven Concept – Solid Foundation
Our success through the years has been validation of our concept, our unique sourcing model, the quality of our
stores and the infrastructure that supports them, with everything revolving around the customer.
Unique Sourcing Model
Dollar Tree has a very fl exible merchandising model, which we use to our advantage. Our assortments are built with
two requirements in mind:
• To offer the greatest value to the customer for $1, and to do so
• At a cost that delivers our desired merchandise margin.
We are not locked in to any specifi c item. To the contrary, for twenty-fi ve years, customers have come to expect
new, fresh items and surprising values every time they visit a Dollar Tree store. Our unique merchandise model provides
us greater control of our mix and as a result, our margins. In fact, margin at Dollar Tree is generally a function of the
mix of product rather than fl uctuations in the cost of specifi c items. Our model has been validated by results. History
shows that we are consistently able to manage through infl ationary and defl ationary cycles by changing the product or
TO OUR SHAREHOLDERS
Bob Sasser
President and Chief Executive Offi cer
2 DOLLAR TREE, INC. ♦ 2010 Annual Report