Dollar Tree 2012 Annual Report Download - page 18

Management’s Discussion & Analysis of
Financial Condition and Results of Operations
Fiscal year ended February 2, 2013 compared to
fiscal year ended January 28, 2012
Net Sales.Netsalesincreased11.5%,or$764.0million,
in2012comparedto2011,resultingfromsalesinour
newstoresandthe53rdweekin2012,whichaccounted
forapproximately$125millionoftheincrease.Oursales
increasewasalsoimpactedbya3.4%increaseincompa-
rable store net sales for the year. is increase is based
ona53-weekcomparisonforbothperiods.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
February2,2013andJanuary28,2012.
February 2,
2013
January28,
2012
Newstores 345 278
Expandedor
relocated stores 87 91
Closed stores (25) (28)
Ofthe345newstoresaddedin2012,25storeswere
openedinJanuary2013.Ofthe2.9millionsellingsquare
footincreasein2012approximately0.3millionwas
added by expanding existing stores.
Grossprotmarginwas35.9%in2012and2011.
Improvement in initial mark-up in many categories and
occupancyanddistributioncostleveragewereosetby
an increase in the mix of higher cost consumer product
merchandiseandhigherfreightcostsinscal2012than
inscal2011.
Selling, General and Administrative Expenses.
Selling, general and administrative expenses, as a
percentageofnetsales,decreasedto23.5%for2012
comparedto24.1%for2011.edecreaseisprimarily
due to the following:
•Payrollexpensesdecreased25basispointsdueto
lower incentive compensation achievement.
•Storeoperatingcostsdecreased15basispoints
due to lower utility costs and reduced repairs and
maintenance expenses.
•Operatingandcorporateexpensesdecreased15basis
points due to a favorable legal settlement and lower
debit and credit fees.
•Depreciationdecreased10basispointsprimarily
due to the leveraging associated with the increase in
comparable store net sales in the current year and
salesinthe53rdweekof2012.
Operating Income.Operatingincomemarginwas12.4%
in2012comparedto11.8%in2011.Duetothereasons
notedabove,operatingincomemarginimproved60basis
points.
Other Income, net. Otherincome,netin2012includesa
$60.8milliongainonthesaleofourinvestmentinOllie’s
Holdings, Inc.
Income Taxes.Oureectivetaxratewas36.7%in2012
comparedto37.4%in2011.isdecreaseistheresultof
statute expirations and the settlement of state tax audits.
16 Dollar Tree, Inc.