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Dollar Tree Stores Inc DLTR
Q3 2012 Earnings Call Transcript

Transcript Call Date 11/15/2012

Operator: Good day and welcome to the Dollar Tree, Inc.'s Third Quarter Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Mr. Tim Reid, Vice President of Investor Relations. Please go ahead, sir.

Timothy J. Reid - VP IR: Thank you, Roxanne. Good morning and welcome to the Dollar Tree conference call for the third quarter of fiscal 2012.

Our call today will be led by Bob Sasser, our President and Chief Executive Officer, who will provide insights on our performance in the quarter and recent developments in our business. Kevin Wampler, our Chief Financial Officer, will provide a more detailed review of our third quarter financial performance and provide our guidance for the remainder of the year.

Before we begin, I would like to remind everyone that various remarks that we will make about future expectations, plans and prospects for the Company constitute forward-looking statements for the purposes of the Safe Harbor Provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors included in our most recent press release, most recent current report on Form 8-K, quarterly report on Form 10-Q and Annual Report on Form 10-K, all of which are on file with the SEC. We have no obligation to update our forward-looking statements and you should not expect us to do so.

One other note, as a reminder on September 28, 2012 Dollar Tree sold its ownership interest in Ollie's Holdings, which further will be referred to as Ollie's. The Company originally acquired it's Ollie's ownership interest in 2003. The sale had a favorable impact on our third quarter earnings with an increase to net income of $0.17 per diluted share. Unless otherwise noted, all net income and earnings data presented today will exclude the impact of the Ollie's transaction.

At the end of our planned remarks we will open the call to questions which we asked that you limit to one question or one follow-up question if necessary.

Now, I'd like to turn the call over to Bob Sasser, our President and CEO. Bob?

Bob Sasser - President and CEO: Thanks, Tim. Good morning, everyone. This morning we announced our sales and earnings for the third quarter of 2012. Total sales increased 7.8% to $1.72 billion, driven principally by increases in traffic. Our comparable store sales increased 1.6% compared with a 4.8% increase last year, and an 8.7% comp the previous year.

Earnings for the third quarter were $0.68 per diluted share. This includes $0.17 from the sale of our interest in Ollie's. Excluding the sale of Ollie's, our earnings for the third quarter were $0.51 per share. This represents an 18.6% increase over last year's $0.43 per share and was at the high end of our $0.47 to $0.51 range of guidance.

Operating margin for the third quarter 2012 was 10.7%, an increase of 40 basis points over the third quarter last year. Net income rose 48.6% to $155.4 million versus $104.5 million last year. Excluding the income derived from the sale of Ollie's, net income rose 12.2% to $117.3 million. Year-to-date through three quarters of 2012, total sales were $5.15 billion, an increase of 9.9% and comp store sales increased 3.9%.

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