(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 (X)

No (  )

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

Yes (  )

No (X)

 

		Page
Item 1.	Financial Statements:
	Unaudited Condensed Consolidated Income Statements for the 13 and 39 weeks Ended October 30, 2010 and October 31, 2009	3
	Unaudited Condensed Consolidated Balance Sheets as of October 30, 2010, January 30, 2010 and October 31, 2009	4
	Unaudited Condensed Consolidated Statements of Cash Flows for the 39 Weeks Ended October 30, 2010 and October 31, 2009	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	17

Item 1.	Legal Proceedings	17
Item 1A.	Risk Factors	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Removed and Reserved	18
Item 5.	Other Information	18
Item 6.	Exhibits	18
	Signatures	20

 

		13 Weeks Ended								39 Weeks Ended
		October 30,				October 31,				October 30,				October 31,
(In millions, except per share data)		2010				2009				2010				2009
Net sales		$	1,426.6			$	1,248.7			$	4,157.1			$	3,672.6
Cost of sales, excluding non-cash
beginning inventory adjustment			920.6				807.5				2,691.1				2,394.2
Non-cash beginning inventory adjustment			-				-				26.3				-
Gross profit			506.0				441.2				1,439.7				1,278.4
Selling, general and administrative
expenses			365.1				333.6				1,068.4				984.0
Operating income			140.9				107.6				371.3				294.4
Interest expense, net			1.6				1.6				4.6				3.9
Other income, net			(5.4	)			-				(5.1	)			(0.2	)
Income before income taxes			144.7				106.0				371.8				290.7
Provision for income taxes			51.5				37.8				137.0				105.2
Net income		$	93.2			$	68.2			$	234.8			$	185.5
Net income per share:
Basic		$	0.73			$	0.51			$	1.84			$	1.38
Diluted		$	0.73			$	0.51			$	1.82			$	1.37

 

		October 30,				January 30,				October 31,
(In millions)		2010				2010				2009
ASSETS
Current assets:
Cash and cash equivalents		$	309.5			$	571.6			$	342.1
Short-term investments			82.5				27.8				-
Merchandise inventories			934.9				679.8				846.2
Other current assets			39.5				26.4				32.4
Total current assets			1,366.4				1,305.6				1,220.7
Property, plant and equipment, net			741.4				714.3				705.1
Goodwill			133.3				133.3				133.3
Deferred tax assets			40.0				35.0				34.4
Other assets, net			81.0				101.5				87.0
Total Assets		$	2,362.1			$	2,289.7			$	2,180.5
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt		$	16.5			$	17.5			$	17.5
Accounts payable			303.2				219.9				261.4
Other current liabilities			227.3				189.9				178.2
Income taxes payable			19.5				48.6				11.5
Total current liabilities			566.5				475.9				468.6
Long-term debt, exluding current portion			250.0				250.0				250.0
Income taxes payable, excluding current portion			14.8				14.4				15.4
Other liabilities			118.6				120.2				121.6
Total liabilities			949.9				860.5				855.6
Commitments and contingencies
Shareholders' equity			1,412.2				1,429.2				1,324.9
Total Liabilities and Shareholders' Equity		$	2,362.1			$	2,289.7			$	2,180.5
Common shares outstanding			125.6				131.3				132.4

 

		39 Weeks Ended
		October 30,				October 31,
(In millions)		2010				2009
Cash flows from operating activities:
Net income		$	234.8			$	185.5
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization			117.6				116.5
Other non-cash adjustments to net income			40.5				19.2
Changes in operating assets and liabilities			(218.1	)			(98.6	)
Net cash provided by operating activities			174.8				222.6
Cash flows from investing activities:
Capital expenditures			(146.7	)			(113.8	)
Purchase of short-term investments			(60.8	)			-
Proceeds from sales of short-term investments			6.1				-
Purchase of restricted investments			(36.4	)			(10.5	)
Proceeds from sales of restricted investments			52.0				6.4
Other			(0.2	)			-
Net cash used in investing activities			(186.0	)			(117.9	)
Cash flows from financing actvities:
Payments for share repurchases			(275.9	)			(154.6	)
Proceeds from stock issued pursuant to stock-based
compensation plan			18.3				24.1
Tax benefit of stock-based compensation			7.8				3.8
Other			(1.1	)			(0.3	)
Net cash used in financing activities			(250.9	)			(127.0	)
Net decrease in cash and cash equivalents			(262.1	)			(22.3	)
Cash and cash equivalents at beginning of period			571.6				364.4
Cash and cash equivalents at end of period		$	309.5			$	342.1
Supplemental disclosure of cash flow information:
Cash paid for:
Interest		$	4.9			$	5.5
Income taxes		$	164.9			$	139.4

 

 

 

 

		13 Weeks Ended								39 Weeks Ended
		October 30,				October 31,				October 30,				October 31,
(In millions, except per share data)		2010				2009				2010				2009
Basic net income per share:
Net income		$	93.2			$	68.2			$	234.8			$	185.5
Weighted average number of
shares outstanding			126.9				133.9				127.8				134.7
Basic net income per share		$	0.73			$	0.51			$	1.84			$	1.38
Diluted net income per share:
Net income		$	93.2			$	68.2			$	234.8			$	185.5
Weighted average number of
shares outstanding			126.9				133.9				127.8				134.7
Dilutive effect of stock options and
restricted stock units (as determined
by applying the treasury stock method)			0.9				0.9				0.9				0.9
Weighted average number of shares and
dilutive potential shares outstanding			127.8				134.8				128.7				135.6
Diluted net income per share		$	0.73			$	0.51			$	1.82			$	1.37

 

 

		13 Weeks Ended								39 Weeks Ended
		October 30,				October 31,				October 30,				October 31,
(In millions)		2010				2009				2010				2009
Net income		$	93.2			$	68.2			$	234.8			$	185.5
Fair value adjustment-derivative
cash flow hedging instrument			1.0				-				2.5				(0.1	)
Income tax expense			(0.4	)			-				(1.0	)			-
Fair value adjustment, net of tax			0.6				-				1.5				(0.1	)
Total comprehensive income		$	93.8			$	68.2			$	236.3			$	185.4

 

 

·	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 effect on quarterly gross profit of using the new retail inventory calculation;

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

·	Our profitability is especially vulnerable to cost increases.

·	Litigation may adversely affect our business, financial condition and results of operations.

·	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.

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

·	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.

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

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

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

·	The price of our common shares as traded on the Nasdaq Global Select Market may be volatile.

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

·	Occupancy and distribution costs decreased 75 basis points in the quarter resulting from the leveraging of the comparable store net sales increase.

·	Markdown and shrink costs decreased 30 basis points in the quarter due to fewer markdowns being taken compared to the prior year quarter and improved shrink results in the current year quarter.

·

Merchandise costs, including freight, increased approximately 85 basis points in the quarter due to higher inbound freight costs compared to the prior year quarter, the sales mix of higher cost consumer product merchandise and the new retail inventory calculation resulting in a change in expense recognition between the third and fourth quarters.

 
 

·	Payroll-related expenses decreased 35 basis points due primarily to the leverage associated with the comparable store sales increase.

·	Depreciation decreased 35 basis points primarily due to the leveraging associated with the increase in comparable store net sales in the current quarter.

·	Store operating costs decreased 20 basis points primarily due to the leveraging associated with the increase in comparable store net sales and a reduction in repairs costs as a percentage of sales.

·	Operating and corporate expenses decreased 20 basis points primarily due to a realized gain related to a legal matter.

 
 

·	Occupancy and distribution costs decreased 50 basis points in the current year resulting from the leveraging of the comparable store net sales increase.

·	Shrink costs decreased 20 basis points in the current year due to favorable adjustments to shrink estimates based on actual inventory results.

·	Merchandise cost, including freight, increased 25 basis points in the current year due to higher inbound freight costs compared to the prior year and sales mix of higher cost consumer product merchandise.

·	Payroll-related expenses decreased 50 basis points due primarily to the leveraging of the comparable store sales increase and a decrease in our workers compensation accruals as a result of favorable development of prior year claims.

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

·	Store operating costs decreased 25 basis points primarily due to the leveraging associated with the increase in comparable store net sales and a reduction in repairs costs as a percentage of sales.

 

		39 Weeks Ended
		October 30,				October 31,
(In millions)		2010				2009
Net cash provided by (used in):
Operating activities		$	174.8			$	222.6
Investing activities			(186.0	)			(117.9	)
Financing activities			(250.9	)			(127.0	)

·	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 1, 2010 to August 28, 2010			-			$	-				-			$	542.2
August 29, 2010 to October 2, 2010			-				-				-				542.2
October 3, 2010 to October 30, 2010			1,421,700				50.92				1,421,700				469.8
Total			1,421,700			$	50.92				1,421,700			$	469.8

3.1

Articles of Incorporation of Dollar Tree, Inc. (as amended, effective June 17, 2010) (Exhibit 3.1 to the Company’s June 17, 2010 Current Report on Form 8-K, incorporated herein by this reference)

3.2

Bylaws of Dollar Tree, Inc., as amended (Exhibit 3.1 to the Company’s June 17, 2010 Current Report on Form 8-K, incorporated herein by this reference)

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)

10.1

Purchase Agreement dated October 10, 2010 (Exhibit 10.1 to the Company’s October 12, 2010 Current Report on Form 8-K, incorporated herein by this reference)

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

 

 

Back to Index

	DOLLAR TREE, INC.
Date:  November 18, 2010	By:	/s/ Kevin S. Wampler
		Kevin S. Wampler
		Chief Financial Officer (principal financial and accounting officer)

 

 20

 

 

Forward to Exhibit 31.1