Dollar Tree 2014 Annual Report Download - page 24

8
policy for all associates. Our distribution centers are operated based on objective measures of performance and virtually
everyone in our store support center is available to assist associates in the stores and distribution centers.
Our disclosure committee meets at least quarterly and monitors our internal controls over financial reporting to ensure that
our public filings contain discussions about the risks our business faces. We believe that we have the controls in place to be
able to certify our financial statements. Additionally, we have complied with the listing requirements for the Nasdaq Stock
Market.
Seasonality. For information on the impact of seasonality, see Item 1A. "Risk Factors" beginning on page 10 of this Form
10-K and Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" beginning on
page 25 of this Form 10-K.
Growth Strategy
Store Openings and Square Footage Growth. The primary factors contributing to our net sales growth have been new store
openings, an active store expansion and remodel program, and selective mergers and acquisitions. In the last five years, net
sales increased at a compound annual growth rate of 10.0%. We expect that the majority of our future sales growth will come
primarily from new store openings and from our store expansion and relocation program.
The following table shows the average selling square footage of our stores and the selling square footage per new store
opened over the last five years. Our growth and productivity statistics are reported based on selling square footage because our
management believes the use of selling square footage yields a more accurate measure of store productivity.
Year Number of Stores
Average Selling Square
Footage Per Store
Average Selling Square
Footage Per New Store
Opened
2010 4,101 8,570 8,400
2011 4,351 8,640 8,360
2012 4,671 8,660 8,060
2013 4,992 8,660 8,020
2014 5,367 8,660 8,060
We expect to increase the selling square footage in our Dollar Tree stores in the future by opening new stores in
underserved markets and strategically increasing our presence in our existing markets via new store openings and store
expansions (expansions include store relocations). In fiscal 2015 and beyond, we plan to predominantly open Dollar Tree
stores that are approximately 8,000 - 10,000 selling square feet and we believe this size allows us to achieve our objectives in
the markets in which we plan to expand. At January 31, 2015, approximately 2,974 of our stores, totaling 65% of our selling
square footage, were 8,000 selling square feet or larger.
Our Deals stores, which offer an expanded assortment of merchandise including items that sell for more than $1.00,
provide us an opportunity to leverage our Dollar Tree infrastructure in different merchandise concepts, including higher price
points, without disrupting the single-price point model in our Dollar Tree stores. We operated 219 Deals stores as of
January 31, 2015.
In addition to new store openings, we plan to continue our store expansion program to increase our net sales per store and
take advantage of market opportunities. We target stores for expansion based on the current sales per selling square foot and
changes in market opportunities. Stores targeted for expansion are generally less than 6,000 selling square feet in size. Store
expansions generally increase the existing store size by approximately 2,750 selling square feet.
Since 1995, we have added a total of 695 stores through several mergers and acquisitions. Our acquisition strategy has
been to target companies that have a similar single-price point concept that have shown success in operations or companies that
provide a strategic advantage. We evaluate potential acquisition opportunities as they become available. On July 27, 2014, we
executed an Agreement and Plan of Merger to acquire Family Dollar Stores, Inc. For more information regarding the pending
acquisition, see "Family Dollar Acquisition" below and Item 8. "Financial Statements and Supplementary Data, Note 11 -
Pending Acquisition and Related Debt" beginning on page 61 of this Form 10-K.
From time to time, we also acquire the rights to store leases through bankruptcy or other proceedings. We will continue to
take advantage of these opportunities as they arise depending upon several factors including their fit within our location and
selling square footage size parameters.