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): August 24, 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, August 24, 2005, Dollar Tree Stores, Inc. issued a press release reporting its fiscal second 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 August 24, 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: August 24, 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 August 24, 2005 issued by Dollar Tree Stores, Inc.

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EX-99.1

Exhibit 99.1

PRESS RELEASE

DOLLAR TREE STORES, INC.

REPORTS SECOND QUARTER NET EARNINGS PER DILUTED SHARE OF $0.25

CHESAPEAKE, Va. – August 24, 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 $0.25, for the fiscal second quarter ended July 30, 2005. Sales for the quarter were $769.0 million, a 9.2% increase compared to $704.2 million, for the same period, one year ago. Comparable store sales declined 1.5% for the quarter.

“An increase in our average ticket was more than offset by reduced store traffic,” said President and CEO Bob Sasser. “While we achieved sales within our most recent guidance, it is evident that our customers continue to feel the strain of rising fuel costs, and they are responding with fewer shopping trips. We remain focused on our sales initiatives as we manage all aspects of our business.”

For the second quarter, gross margin was 34.0%, compared to the 35.6% in last year’s second quarter. Loss of leverage on occupancy costs, coupled with higher merchandise costs resulting from mix and higher freight costs attributed to most of the decline. The 2004 second quarter results also included a favorable shrink true-up which accounted for the balance of the rate decline in the year-on-year comparison.

Selling, general and administrative expenses, as a percentage of sales, were 27.9% in the second quarter of 2005, compared to 28.6% in the same quarter last year. The reduction in rate reflects the Company’s continual dedication to expense control as well as meaningful savings in health care costs and workers compensation expenses.

It is also noteworthy that depreciation expense, as a percent of sales, was flat for the quarter, when compared to last year.

Operating margin in this year’s second quarter was 6.1%, versus 7.0% for the same period, one year ago.

The Company estimates sales for the third quarter of 2005 to be in the range of $775 -$800 million. Based upon this sales forecast, diluted earnings per share is estimated to be in the range of $0.28 to $0.31.

Full year sales are now forecasted to be in the range of $3.33 billion - $3.38 billion. Full year diluted earnings per share are expected to be in the range of $1.57 - $1.66.

On Wednesday, August 24, 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 703-639-1163. A recorded version of the call will be available until midnight Tuesday, August 30, and may be accessed by dialing 703-925-2533, and the access code is 750327. 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 Tuesday, August 30. 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, October 6, 2005, by 5:00 p.m. EDT, and will remain on-line through Monday, October 10, 2005. Interested parties can access the Company’s update by dialing (757) 321-5873.

As of July 30, 2005, Dollar Tree operated 2,856 stores in 48 states. During the second quarter, Dollar Tree opened 74 stores, closed 9 stores, and expanded or relocated 27 stores. The Company’s retail selling square footage totaled approximately 22.2 million at July 30, 2005, an 18.7% 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 our expectations for sales initiatives, third-quarter sales and earnings per share, as well as full year sales and earnings per share. 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 and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Quarterly Report on Form 10-Q filed June 9, 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)

	Second Quarter ended						Year-to-Date
	July 30, 2005			July 31, 2004			July 30, 2005			July 31, 2004
Net sales	$	769,027		$	704,234		$	1,518,120		$	1,414,564
Cost of sales		507,541			453,861			1,002,390			911,155
Gross profit		261,486			250,373			515,730			503,409
		34.0	%		35.6	%		34.0	%		35.6	%
Selling, general & administrative expenses		214,902			201,289			421,072			395,666
		27.9	%		28.6	%		27.7	%		28.0	%
Operating income		46,584			49,084			94,658			107,743
		6.1	%		7.0	%		6.2	%		7.6	%
Interest expense, net		(3,071	)		(1,235	)		(4,607	)		(3,313	)
Other income		216			301			471			911
Income before income taxes		43,729			48,150			90,522			105,341
		5.7	%		6.8	%		6.0	%		7.4	%
Income tax expense		16,419			18,558			34,200			40,599
Net income		27,310			29,592			56,322			64,742
		3.6	%		4.2	%		3.7	%		4.6	%
Net earnings per share:
Basic	$	0.25		$	0.26		$	0.51		$	0.57
Weighted average number of shares		108,386			113,527			109,823			113,671
Diluted	$	0.25		$	0.26		$	0.51		$	0.57
Weighted average number of shares		108,823			114,149			110,310			114,442

DOLLAR TREE STORES, INC.

Condensed Consolidated Balance Sheets

(Dollars in thousands)

	July 30, 2005		Jan. 29, 2005		July 31, 2004
Cash and cash equivalents	$	14,533	$	106,532	$	59,513
Short-term investments		151,015		211,275		122,305
Merchandise inventories		629,833		615,483		648,680
Other current assets		33,821		36,597		32,136
Total current assets		829,202		969,887		862,634
Property and equipment, net		691,628		685,386		664,320
Intangibles, net		130,935		129,032		123,265
Other assets, net		28,047		8,367		21,763
Total assets	$	1,679,812	$	1,792,672	$	1,671,982
Current portion of long-term debt	$	19,000		19,000	$	19,000
Accounts payable		120,374		124,195		158,065
Other current liabilities		103,123		117,491		97,495
Income taxes payable		5,308		33,669		5,450
Total current liabilities		247,805		294,355		280,010
Long-term debt, excluding current portion		250,000		250,000		250,000
Other liabilities		84,812		84,105		83,440
Total liabilities		582,617		628,460		613,450
Shareholders’ equity		1,097,195		1,164,212		1,058,532
Total liabilities and shareholders’ equity	$	1,679,812	$	1,792,672	$	1,671,982
STORE DATA:
Number of stores open at end of period		2,856		2,735		2,612
Total selling square footage (in thousands)		22,160		20,444		18,665

DOLLAR TREE STORES, INC.

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)

	Year-to-Date
	July 31, 2005			July 31, 2004
Cash flows from operating activities:
Net income	$	56,322		$	64,742
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization		68,105			62,818
Other non-cash adjustments		(8,411	)		11,774
Changes in merchandise inventories		(14,349	)		(123,037	)
Other changes in working capital		(32,629	)		13,450
Total adjustments		12,716			(34,995	)
Net cash provided by operating activities		69,038			29,747
Cash flows from investing activities:
Capital expenditures		(74,477	)		(93,243	)
Purchase of short-term investments		(497,745	)		(112,500	)
Proceeds from maturities of short-term investments		558,005			74,690
Restricted investments		(15,147	)		—
Acquisition of favorable lease rights		(3,331	)		(251	)
Net cash used in investing activities		(32,695	)		(131,304	)
Cash flows from financing activities:
Proceeds from long-term debt, net of facility fees of $1,094		—			248,906
Repayment of long-term debt and facility fees		—			(148,568	)
Principal payments under capital lease obligations		(3,521	)		(2,313	)
Proceeds from stock issued pursuant to stock-based compensation plans		5,549			9,184
Payments for share repurchases		(130,370	)		(30,329	)
Net cash provided by (used in) financing activities		(128,342	)		76,880
Net decrease in cash and cash equivalents		(91,999	)		(24,677	)
Cash and cash equivalents at beginning of period		106,532			84,190
Cash and cash equivalents at end of period	$	14,533		$	59,513