(X)	Quarterly report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

( )	Transition report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

 

Virginia		26-2018846
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

Yes (X)

No (  )

Yes ( )

No ( )

Large accelerated filer (X)	Accelerated filer (  )
Non accelerated filer (  )	Smaller reporting company (  )

Yes (  )

No (X)

 

		Page
Item 1.	Financial Statements:
	Condensed Consolidated Income Statements for the 13 and 39 Weeks Ended October 31, 2009 and November 1, 2008	3
	Condensed Consolidated Balance Sheets as of October 31, 2009, January 31, 2009 and November 1, 2008	4
	Condensed Consolidated Statements of Cash Flows for the 39 Weeks Ended October 31, 2009 and November 1, 2008	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15
Item 4.	Controls and Procedures	15

Item 1.	Legal Proceedings	15
Item 1A.	Risk Factors	16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3.	Defaults Upon Senior Securities	16
Item 4.	Submission of Matters to a Vote of Security Holders	16
Item 5.	Other Information	16
Item 6.	Exhibits	17
	Signatures	18

 

 

		13 Weeks Ended								39 Weeks Ended
		October 31,				November 1,				October 31,				November 1,
(In millions, except per share data)		2009				2008				2009				2008
Net sales		$	1,248.7			$	1,114.0			$	3,672.6			$	3,258.4
Cost of sales			807.5				734.6				2,394.2				2,159.4
Gross profit			441.2				379.4				1,278.4				1,099.0
Selling, general and administrative
expenses			333.6				310.1				984.0				898.4
Operating income			107.6				69.3				294.4				200.6
Interest expense, net			1.6				2.3				3.7				5.8
Income before income taxes			106.0				67.0				290.7				194.8
Provision for income taxes			37.8				23.9				105.2				70.5
Net income		$	68.2			$	43.1			$	185.5			$	124.3
Net income per share:
Basic		$	0.76			$	0.48			$	2.07			$	1.38
Diluted		$	0.76			$	0.47			$	2.05			$	1.37

 

 

 

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		39 Weeks Ended
			October 31,				November 1,
(In millions)			2009				2008
Cash flows from operating activities:
Net income		$	185.5			$	124.3
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization			116.5				119.8
Other non-cash adjustments to net income			19.2				47.6
Changes in operating assets and liabilities			(98.6	)			(205.2	)
Net cash provided by operating activities			222.6				86.5
Cash flows from investing activities:
Capital expenditures			(113.8	)			(104.2	)
Purchase of short-term investments			-				(34.7	)
Proceeds from sales of short-term investments			-				75.2
Purchase of restricted investments			(10.5	)			(16.2	)
Proceeds from sales of restricted investments			6.4				15.5
Other			-				(0.4	)
Net cash used in investing activities			(117.9	)			(64.8	)
Cash flows from financing activities:
Payments for share repurchases			(154.6)				-
Proceeds from stock issued pursuant to stock-based
compensation plans			24.1				16.0
Tax benefit of stock-based compensation			3.8				1.5
Other			(0.3)				(1.2	)
Net cash provided by (used in) financing activities			(127.0	)			16.3
Net increase (decrease) in cash and cash equivalents			(22.3	)			38.0
Cash and cash equivalents at beginning of period			364.4				40.6
Cash and cash equivalents at end of period		$	342.1			$	78.6
Supplemental disclosure of cash flow information:
Cash paid for:
Interest		$	5.5			$	7.8
Income taxes		$	139.4			$	114.8

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		13 Weeks Ended								39 Weeks Ended
		October 31,				November 1,				October 31,				November 1,
(In millions, except per share data)		2009				2008				2009				2008
Basic net income per share:
Net income		$	68.2			$	43.1			$	185.5			$	124.3
Weighted average number of
shares outstanding			89.3				90.5				89.8				90.2
Basic net income per share		$	0.76			$	0.48			$	2.07			$	1.38
Diluted net income per share:
Net income		$	68.2			$	43.1			$	185.5			$	124.3
Weighted average number of
shares outstanding			89.3				90.5				89.8				90.2
Dilutive effect of stock options and
restricted stock units (as determined
by applying the treasury stock method)			0.6				0.5				0.6				0.4
Weighted average number of shares and
dilutive potential shares outstanding			89.9				91.0				90.4				90.6
Diluted net income per share		$	0.76			$	0.47			$	2.05			$	1.37

		13 Weeks Ended								39 Weeks Ended
		October 31,				November 1,				October 31,				November 1,
(In millions)		2009				2008				2009				2008
Net income		$	68.2			$	43.1			$	185.5			$	124.3
Fair value adjustment-derivative
cash flow hedging instrument			-				(2.5	)			(0.1	)			0.1
Income tax expense			-				1.0				-				-
Fair value adjustment, net of tax			-				(1.5	)			(0.1	)			0.1
Total comprehensive income		$	68.2			$	41.6			$	185.4			$	124.4

·	our anticipated sales, including comparable store net sales, net sales growth, earnings growth and new store growth;

·	costs of pending and possible future legal claims;

·	the average size of our stores and their performance compared with other store sizes;

·	the effect of the continued shift in merchandise mix to include more consumables and the continued roll-out of frozen and refrigerated merchandise on gross profit margin and sales;

·	the possible effect of the current economic downturn, inflation and other economic changes on our costs and profitability, including future changes in minimum wage rates, shipping rates, domestic and foreign freight costs, fuel costs and wage and benefit costs;

·	our cash needs, including our ability to fund our future capital expenditures and working capital requirements; and,

·	the future reliability of, and cost associated with, our sources of supply, particularly imported goods such as those sourced from China and Hong Kong.

·	A continued downturn in economic conditions could adversely affect our sales.

·	Our profitability is especially vulnerable to cost increases.

·	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 receiving and distributing merchandise.

·	Sales below our expectations during peak seasons may cause our operating results to suffer materially.

·	Our sales and profits rely on directly and indirectly imported merchandise which may increase in cost or become unavailable.

·	We may be unable to expand our square footage as timely and profitably as planned.

·	Our profitability is affected by the mix of products we sell.

·	Pressure from competitors, including competition for merchandise, may reduce our sales and profits.

·	Certain provisions in our articles of incorporation and bylaws could delay or discourage a takeover attempt.

 

·

Merchandise costs, including inbound freight, decreased 90 basis points due primarily to lower fuel costs and lower ocean freight rates compared to the prior year quarter.  Improved initial mark-up in many categories during the quarter was offset by an increase in the mix of higher cost consumer product merchandise during the quarter as compared to the prior year quarter.

·	Occupancy and distribution costs decreased 30 basis points in the quarter resulting from the leveraging of the comparable store net sales increase.

·	Store operating costs decreased 40 basis points primarily due to lower utility costs, as a percentage of sales, in the current quarter, resulting from lower rates compared to the prior year quarter and the leveraging associated the increase in comparable store net sales.

·	Depreciation decreased 30 basis points primarily due to the leveraging associated with the increase in comparable store net sales in the current quarter.

·

Payroll-related expenses decreased 25 basis points resulting from lower field payroll costs as a percentage of sales, due to the leveraging of the comparable store sales increase, partially offset by increased incentive compensation due to favorable sales and earnings results in relation to their targets in the current quarter and year.

·

Merchandise costs, including inbound freight, decreased 50 basis points due primarily to lower fuel costs and lower ocean freight rates compared to the prior year period.  Improved initial mark-up in many categories during the year was partially offset by an increase in the mix of higher cost consumer product merchandise during the 39 weeks ended October 31, 2009 as compared to the 39 weeks ended November 1, 2008.

·	Outbound freight costs decreased 30 basis points in the current year due primarily to decreased fuel costs.

·	Occupancy and distribution costs decreased 30 basis points in the current year resulting from the leveraging of the comparable store net sales increase.

·	Depreciation decreased 50 basis points primarily due to the leveraging associated with the increase in comparable store net sales in the current year.

·	Store operating costs decreased 30 basis points primarily due to lower utility costs, as a percentage of sales, in the current year compared to the prior year resulting from lower rates in the current year and the leveraging associated with the increase in comparable store net sales.

 

 

		39 Weeks ended
		October 31,				November 1,
(In millions)		2009				2008
Net cash provided by (used in):
Operating activities		$	222.6			$	86.5
Investing activities			(117.9	)			(64.8	)
Financing activities			(127.0	)			16.3

 

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·	employment-related matters;
·	infringement of intellectual property rights;
·	product safety matters, which may include product recalls in cooperation with the Consumer Products Safety Commission or other jurisdictions;
·	personal injury/wrongful death claims; and
·	real estate matters related to store leases.

								Approximate
						Total number		dollar value of
						of shares		shares that may
						purchased as		yet be purchased
		Total number		Average		part of publicly		under the plans
		of shares		price paid		announced plans		or programs
Period		purchased		per share		or programs		(in millions)
August 2, 2009 to August 29, 2009		-		$          -		-		$       368.4
August 30, 2009 to October 3, 2009		-		-		-		368.4
October 4, 2009 to October 31, 2009		1,416,256		48.93		1,416,256		299.1
Total		1,416,256		$  48.93		1,416,256		$       299.1

3.

Articles and Bylaws

3.1

Articles of Incorporation of Dollar Tree, Inc. (as amended, effective June 23, 2008) (Exhibit 3.1 to the Company’s June 19, 2008 Current Report on Form 8-K, incorporated herein by this reference)

3.2

Bylaws of Dollar Tree, Inc. (the Company), as amended (Exhibit 3.1 to the Company’s June 18, 2009 Report on Form 8-K, incorporated herein by this reference)

4.

Instruments Defining the Rights of Security Holders

4.1

Form of Common Stock Certificate (Exhibit 4.1 to the Company’s March 13, 2008 Current Report on Form 8-K, incorporated herein by this reference)

31.

Certifications required under Section 302 of the Sarbanes-Oxley Act

31.1

Certification required under Section 302 of the Sarbanes-Oxley Act of Chief Executive Officer

31.2

Certification required under Section 302 of the Sarbanes-Oxley Act of Chief Financial Officer

32.1

Certification required under Section 906 of the Sarbanes-Oxley Act of Chief Executive Officer

32.2

Certification required under Section 906 of the Sarbanes-Oxley Act of Chief Financial Officer

	DOLLAR TREE, INC.
Date:  November 24, 2009	By:	/s/ Kevin S. Wampler
		Kevin S. Wampler
		Chief Financial Officer (principal financial and accounting officer)