Dollar Tree 2012 Annual Report Download - page 4

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O
To Our Shareholders
On behalf of all Dollar Tree Associates I am pleased to report that 2012 was
another year of record results for Dollar Tree. Net sales increased 11.5% to $7.39
billion. Comparable-store sales increased 3.4% on top of a 6.0% comparable-store
sales increase last year. Earnings increased to a record $2.68 per diluted share
compared with $2.01 earnings per diluted share in 2011. In a tough and competitive
environment, we achieved operating margin of 12.4%, compared with 11.8% last
year. Additionally, operating income increased by $138.0 million, and net income
rose 26.8%, to $619.3 million.
We continue to grow our business and improve upon key operational metrics.
In 2012, we expanded selling square footage 7.7%, ending the year with 4,671
stores across 48 U.S. states and five Canadian provinces. Meanwhile, we achieved
the highest new store productivity since 2001 and increased inventory turns for the
eighth consecutive year. To support future growth, we broke ground on our new
Distribution Center in Windsor, Connecticut. Dollar Tree Associates can take pride
in all that we accomplished, together, in 2012.
ere are many reasons for Dollar Tree’s continued success, beginning with our focus on the customer. We have a unique
concept that customers love: Everything’s $1.00, or less! We are vigilant about understanding what our customers need
and we do our best to provide it to them. Our goal is to “Wow” the customer every time they visit, with stores that are
convenient, bright, clean, fun and friendly; and filled with great merchandise at surprising values.
Our merchandising model is powerful and flexible, and we use this strategy of ever-changing assortments to our advantage.
Our assortments are planned to offer the greatest value to the customer for $1 and to do so at a cost that delivers our
desired merchandise margin. To the customer, this means there is always something new at Dollar Tree. As customers
strive to balance their budgets, they can find the high value basics they need while enjoying the “rill of the Hunt” on every
visit. Seasonal assortments are fresh, colorful and fun, providing merchandise energy in the stores.
is strategic advantage has been validated by results. History shows that we have increased our relevance throughout
both inflationary and deflationary cycles by leveraging our scale and our flexibility to change the product or the source
while maintaining our focus on achieving margin targets and providing extreme value to our customers for their dollar.
The Future: our plan for Sustainable Growth
Looking forward, we are excited about our potential to grow through increasing our relevance to the customer. We
believe the consumers’ demand for value will intensify over the next several years. As customers strive to balance their
budgets they are finding that Dollar Tree is “right for all times”. We plan to continue expanding our business by providing
even more value to a broader range of customers. We are doing this in many ways.
e first way is by building more New Stores. Dollar Tree has grown every year since our founding in 1986, and we have
plenty of room to grow in the years ahead. In fiscal 2012 we opened 345 new stores and relocated or expanded 87 stores for
a total of 432 projects – including 30 projects in January 2013. In the past, we have chosen not to open stores in January, but
that is changing. In fiscal 2012, due to the efficiency of our store development teams, we accelerated the opening of 25 new
stores and 5 relocations from early fiscal 2013 into January, and we like the results. In addition to generating incremental
sales in fiscal 2012, these stores will now give us a full year of sales in 2013 and improved productivity.
Our plan for fiscal 2013 includes approximately 340 new stores and 75 relocations for a total of 415 projects across the
U.S. and Canada. is is in addition to the projects that we completed in January 2013. Square footage growth is planned
to be 7.3%, on top of the 7.7% square footage growth in 2012.
2 Dollar Tree, Inc.
Bob Sasser
President and Chief Executive Officer