Discount retailer Dollar Tree Stores Inc 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 they achieved sales within 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. They remain focused on our sales initiatives as company manage all aspects of the business."

For the second quarter, gross margin was 34.0%, compared to 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 improvement 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.

Nation''s leading operator of single-price point dollar stores, Dollar Tree Stores Inc stores are bright, clean, fun, and well organized. They''re stocked with a wide array of gift bags, party supplies, housewares, seasonal decor, candy and food, toys, health and beauty care, gifts, stationery, books, and a variety of consumer items.

And everything is priced at $1! 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.
 
Dollar Tree Stores Inc