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Dollar Tree, Inc. Reports Record First Quarter Earnings

Guidance

The Company estimates sales for the second quarter of 2012 to be in the range of $1.66 billion to $1.70 billion, based on low –to- mid single digit positive comparable store sales. Diluted earnings per share are estimated to be in the range of $0.87 to $0.93.

Full year sales are now estimated to be in the range of $7.33 billion to $7.46 billion. This estimate is based on a range of low –to- mid single digit positive comparable store sales. Fiscal year 2012 diluted earnings per share are expected to be $4.74 to $4.94. These estimates assume no impact from potential additional share repurchase activity in 2012. In addition, 2012 will include a 53rd week that will be recorded in the fourth quarter 2012. The extra week is expected to add $120 million to $130 million to sales in the fourth quarter 2012 and $0.13 to $0.15 earnings per diluted share, both of which are included in our guidance.

On Thursday, May 17, 2012, the Company will host a conference call to discuss its earnings results at 9:00 a.m. EDT. The telephone number for the call is 888-224-1075. A recorded version of the call will be available until midnight Thursday, May 24, and may be accessed by dialing 888-203-1112, and the access code is 3204362. A webcast of the call is accessible through Dollar Tree's website, www.dollartreeinfo.com/investors/news/events and will remain online until midnight Thursday, May 24.

Dollar Tree, a Fortune 500 Company, operated 4,451 stores in 48 states and 5 Canadian Provinces as of April 28, 2012, with total retail selling square footage of 38.6 million. To learn more about the Company, visit www.DollarTree.com.

A WARNING ABOUT FORWARD-LOOKING STATEMENTS: Our press release contains "forward-looking statements" as that term is used in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address future events, developments or results and typically use words such as believe, anticipate, expect, intend, plan, forecast, or estimate. For example, our forward-looking statements include statements regarding second quarter and full year sales, second quarter and full year diluted earnings per share, second quarter comparable store sales and the impact of the 53 rd week of 2012. For a discussion of the risks, uncertainties and assumptions that could affect our future events, developments or results, you should carefully review the “Risk Factors,” "Business," and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in our Annual Report on Form 10 - K filed March 15, 2012. We are not obligated to release publicly any revisions to any forward-looking statements contained in this press release to reflect events or circumstances occurring after the date of this report and you should not expect us to do so.

DOLLAR TREE, INC.
Condensed Consolidated Income Statements
(Dollars in millions, except per share data)
   
 
First Quarter Ended
April 28, April 30,
2012 2011
(unaudited) (unaudited)
Net sales $ 1,723.6 $ 1,545.9
 
Cost of sales 1,120.9 1,005.1
 
 
Gross profit 602.7 540.8
35.0% 35.0%
 
Selling, general & administrative expenses 414.7 379.1
24.1% 24.5%
 
Operating income 188.0 161.7
10.9% 10.5%
 
Interest expense, net 0.5 0.9
Other income, net (1.1) (0.7)
 
Income before income taxes 188.6 161.5
10.9% 10.4%
 
Income tax expense 72.5 60.5
Income tax rate 38.4% 37.5%
 
Net income $ 116.1 $ 101.0
6.7% 6.5%
 
Net earnings per share:
Basic $ 1.00 $ 0.82
Weighted average number of shares 115.8 122.6
 
Diluted $ 1.00 $ 0.82
Weighted average number of shares 116.4 123.5
 
DOLLAR TREE, INC.
Condensed Consolidated Balance Sheets
(Dollars in millions)
(Unaudited)
     
April 28, January 28, April 30,
2012 2012 2011
 
Cash and cash equivalents $ 382.3 $ 288.3 $ 371.3
Short-term investments - - 139.0
Merchandise inventories 875.0 867.4 771.2
Other current assets   47.1   53.7   44.0
Total current assets 1,304.4 1,209.4 1,325.5
 
Property and equipment, net 848.8 825.3 760.2
Goodwill 174.0 173.1 175.0
Deferred tax assets 19.2 16.8 25.1
Other assets, net   104.7   104.0   95.5
 
Total assets $ 2,451.1 $ 2,328.6 $ 2,381.3
 
 
Current portion of long-term debt $ 265.5 $ 15.5 $ 16.5
Accounts payable 319.1 286.7 276.0
Other current liabilities 187.0 215.5 170.6
Income taxes payable, current   44.4   63.3   41.6
Total current liabilities 816.0 581.0 504.7
 
Long-term debt, excluding current portion - 250.0 250.0
Income taxes payable, long-term 15.7 15.5 15.4
Other liabilities   138.8   137.5   124.5
 
Total liabilities   970.5   984.0   894.6
 
Shareholders' equity   1,480.6   1,344.6   1,486.7
 
Total liabilities and shareholders' equity $ 2,451.1 $ 2,328.6 $ 2,381.3
 
STORE DATA:
Number of stores open at end of period 4,451 4,351 4,177
Total selling square footage (in millions) 38.6 37.6 36.0
 
DOLLAR TREE, INC.
Condensed Consolidated Statements of Cash Flows
(Dollars in millions)
(Unaudited)
  Three Months Ended
April 28,   April 30,
  2012     2011  
 
Cash flows from operating activities:
Net income $ 116.1   $ 101.0  

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 41.8 39.2
Other non-cash adjustments 20.9 23.8
Changes in working capital   (44.3 )   (7.7 )
Total adjustments   18.4     55.3  
Net cash provided by operating activities   134.5     156.3  
 
Cash flows from investing activities:
Capital expenditures (65.4 ) (58.3 )
Purchase of short-term investments - (6.0 )
Proceeds from maturities of short-term investments - 41.8
Other   -     0.4  
Net cash used in investing activities   (65.4 )   (22.1 )
 
Cash flows from financing activities:
Payments for share repurchases (4.5 ) (88.6 )

Proceeds from stock issued pursuant to stock-based compensation plans

5.9 3.9
Tax benefit of stock-based compensation 23.8 9.8
Other   (0.2 )   (0.1 )
Net cash provided by (used in) financing activities   25.0     (75.0 )
Effect of exchange rate changes on cash and cash equivalents   (0.1 )   0.9  
Net increase in cash and cash equivalents 94.0 60.1
Cash and cash equivalents at beginning of period   288.3     311.2  
Cash and cash equivalents at end of period $ 382.3   $ 371.3  
 




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