8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 25, 2005

DOLLAR TREE STORES, INC.

(Exact name of registrant as specified in its charter)

VIRGINIA

(State or Other Jurisdiction of Incorporation)

0-25464	54-1387365
(Commission File Number)	(I.R.S. Employer Identification No.)

500 Volvo Parkway

Chesapeake, VA 23320

(Address of Principal Executive Offices and Zip Code)

(757) 321-5000

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

Today, May 25, 2005, Dollar Tree Stores, Inc. issued a press release reporting its fiscal first quarter earnings results and announcing that it will hold a publicly available telephone conference call to discuss these results. A copy of the press release is attached to this Form 8-K as Exhibit 99.1 and is incorporated herein by this reference.

The information contained in this item is being furnished to the Securities and Exchange Commission. Such information shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934 or otherwise subject to the liabilities of that Section. The information shall not be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, except as expressly set forth by specific reference in such filing.

Item 7.01. Regulation FD Disclosure.

The information (including disclaimer) presented under Item 2.02 is incorporated by reference into this Item 7.01.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

99.1 Press release dated May 25, 2005 issued by Dollar Tree Stores, Inc.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

DATE: May 25, 2005

DOLLAR TREE STORES, INC.
By:	/s/ Kent A. Kleeberger
	Kent A. Kleeberger
	Chief Financial Officer

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EXHIBITS

Exhibit 99.1- Press release dated May 25, 2005 issued by Dollar Tree Stores, Inc.

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EX-99.1

EXHIBIT 99.1

PRESS RELEASE

DOLLAR TREE STORES, INC.

REPORTS FIRST QUARTER NET EARNINGS PER DILUTED SHARE OF $0.26

CHESAPEAKE, Va. – May 25, 2005 – Dollar Tree Stores, Inc. (NASDAQ: DLTR), the nation’s leading operator of single-price point dollar stores, reported net earnings per diluted share of $0.26, for the fiscal first quarter ended April 30, 2005. Sales for the quarter were $749.1 million, a 5.5% increase compared to $710.3 million, for the same period, one year ago. Comparable store sales declined 3.7% for the quarter.

“The impact of reduced sales resulting from adverse weather conditions during the shorter pre-Easter selling period were more than could be overcome and is reflected in our earnings,” said President and CEO Bob Sasser. “Our customers have experienced and continue to feel the impact of higher fuel costs, and while our guidance anticipates this to continue, we are optimistic that initiatives which were implemented early in the year, including increased marketing and expansion of our tender types, will provide future momentum.”

For the first quarter, gross margin was 33.9%, compared to the 35.6% in last year’s first quarter. The decrease in rate is predominantly attributable to reduced leverage on occupancy costs as the result of lower than planned sales. Additionally, freight costs increased due to higher fuel prices and markdowns were higher than plan due to lower than planned sell through of Easter product.

Selling, general and administrative expenses, as a percentage of sales, were 27.5% in the first quarter of 2005, compared to 27.4% in the same quarter last year. The slight increase in rate, despite a 3.7% decline in comparable store sales, reflects a continual focus on expense control as well as initial payback on efforts to reduce operating costs.

Operating margin in this year’s first quarter was 6.4%, versus 8.3% for the same period, one year ago.

During the first quarter of 2005, the Company bought 4.7 million shares of its common stock, for approximately $128.3 million. On March 18, 2005, the Company’s Board of Directors authorized a $300 million share repurchase program. Of the aforementioned shares repurchased, 2.8 million shares were bought under the new authorization, at a total cost of $73.0 million, with the balance repurchased under the former plan.

The Company estimates sales for the second quarter of 2005 to be in the range of $755 -$770 million. Based upon this sales forecast, diluted earnings per share is estimated to be in the range of $0.25 to $0.27.

For the full year, the Company expects sales will range from $3.340 to $3.415 billion. Based on this sales forecast, the Company anticipates diluted earnings per share to be in the range of $1.61 to $1.72. This guidance considers modest improvement in sales trends in the second half of 2005 since many of the initiatives to improve the top line were starting to be implemented in late April and early May.

On Wednesday, May 25, 2005, 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 703-639-1319. A recorded version of the call will be available until midnight Saturday, June 4, and may be accessed by dialing 703-925-2533, and the access code is 701625. A webcast of the call is accessible through Dollar Tree’s website, www.DollarTree.com, as well as at Vcall’s website, www.Vcall.com, and will remain on-line until midnight Saturday, June 4. Any financial and statistical information related to the call can be accessed through the “Investor Relations / SEC Filings / Non-GAAP Measures” section of Dollar Tree’s website.

The Company’s regular, pre-recorded business update will be available Thursday, July 7, 2005, by 5:00 p.m. EDT, and will remain on-line through Monday, July 11, 2005. Interested parties can access the Company’s update by dialing (757) 321-5TRE.

As of April 30, 2005, Dollar Tree operated 2,791 stores in 48 states. During the first quarter, Dollar Tree opened 65 stores, closed 9 stores, and expanded or relocated 30 stores. The Company’s retail selling square footage totaled approximately 21.3 million at April 30, 2005, an 18% increase compared to a year ago.

A WARNING ABOUT FORWARD-LOOKING STATEMENTS: This 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 sales and earnings per share, full year sales and earnings per share, as well as on-going initiatives to improve sales. 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 April 14, 2005. Also, carefully review “Risk Factors” in our most recent prospectuses filed November 15, 2000 and August 3, 2000. In light of these risks and uncertainties, the future events, developments or results described by our forward looking statements in this document could turn out to be materially and adversely different from those we discuss or imply. 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.

CONTACT:	Dollar Tree Stores, Inc., Chesapeake
	Kent Kleeberger, 757-321-5000
	www.DollarTree.com

DOLLAR TREE STORES, INC.

Condensed Consolidated Income Statements

(Dollars in thousands, except per share data)

	Quarter Ended
	April 30, 2005			May 1, 2004
Net sales	$	749,093		$	710,330
Cost of sales		494,849			457,294
Gross profit		254,244			253,036
		33.9	%		35.6	%
Selling, general & administrative expenses		206,170			194,377
		27.5	%		27.4	%
Operating income		48,074			58,659
		6.4	%		8.3	%
Interest expense, net		(1,536	)		(2,078	)
Other income		255			610
Income before income taxes		46,793			57,191
		6.2	%		8.1	%
Income tax expense		17,781			22,041
Net income		29,012			35,150
		3.9	%		4.9	%
Net earnings per share:
Basic	$	0.26		$	0.31
Weighted average number of shares		111,258			113,814
Diluted	$	0.26		$	0.31
Weighted average number of shares		111,802			114,667

DOLLAR TREE STORES, INC.

Condensed Consolidated Balance Sheets

(Dollars in thousands)

	April 30, 2005		Jan. 29, 2005		May 1, 2004
Cash and cash equivalents	$	65,535	$	106,532	$	101,380
Short-term investments		104,695		211,275		142,810
Merchandise inventories		644,322		615,483		565,219
Other current assets		39,414		36,597		29,094
Total current assets		853,966		969,887		838,503
Property and equipment, net		686,303		685,386		658,850
Intangibles, net		131,291		129,032		123,596
Other assets, net		23,023		8,367		21,646
Total assets	$	1,694,583	$	1,792,672	$	1,642,595
Current portion of long-term debt		19,000		19,000		19,000
Accounts payable		137,823		124,195		139,059
Other current liabilities		102,370		117,491		92,596
Income taxes payable		31,430		33,669		30,085
Total current liabilities		290,623		294,355		280,740
Long-term debt, excluding current portion		250,000		250,000		250,000
Other liabilities		85,265		84,105		77,066
Total liabilities		625,888		628,460		607,806
Shareholders’ equity		1,068,695		1,164,212		1,034,789
Total liabilities and shareholders’ equity	$	1,694,583	$	1,792,672	$	1,642,595
STORE DATA:
Number of stores open at end of period		2,791		2,735		2,579
Total selling square footage (in thousands)		21,304		20,444		18,070

DOLLAR TREE STORES, INC.

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)

	Quarter Ended
	April 30, 2005			May 1, 2004
Cash flows from operating activities:
Net income	$	29,012		$	35,150
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		32,532			30,428
Other non-cash adjustments		(4,886	)		3,936
Changes in working capital		(25,448	)		(21,688	)
Total adjustments		2,198			12,676
Net cash provided by operating activities		31,210			47,826
Cash flows from investing activities:
Capital expenditures		(33,858	)		(55,188	)
Purchase of short-term investments		(106,120	)		(102,500	)
Proceeds from maturities of short-term investments		212,700			44,185
Acquisition of favorable lease rights		(2,890	)		(251	)
Proceeds from sale of property and equipment		—			—
Net cash provided by (used in) investing activities		69,832			(113,754	)
Cash flows from financing activities:
Proceeds from long-term debt, net of facility fees of $0 and $1,094		—			248,906
Repayment of long-term debt		—			(148,568	)
Restricted cash		(15,147	)		—
Principal payments under capital lease obligations		(1,739	)		(1,140	)
Proceeds from stock issued pursuant to stock-based compensation plans		3,181			4,828
Payments for share repurchases		(128,334	)		(20,908	)
Net cash provided by (used in) financing activities		(142,039	)		83,118
Net increase (decrease) in cash and cash equivalents		(40,997	)		17,190
Cash and cash equivalents at beginning of period		106,532			84,190
Cash and cash equivalents at end of period	$	65,535		$	101,380