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): February 22, 2006

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:

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

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

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

oPre-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, February 22, 2006, Dollar Tree Stores, Inc. issued a press release reporting its fiscal 2005 fourth 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.

Today, February 22, 2006, Dollar Tree Stores, Inc. issued a press release announcing its intent to acquire 138 Deal$ stores. A copy of the press release is attached to this Form 8-K as Exhibit 99.2 and is incorporated herein by this reference.

The information presented under Item 2.02 is incorporated by reference into this Item 7.01.

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 9.01. Financial Statements and Exhibits.

(c) Exhibits.

99.1	Press release dated February 22, 2006 issued by Dollar Tree Stores, Inc. reporting its fiscal 2005 fourth quarter earnings results.
99.2	Press release dated February 22, 2006 issued by Dollar Tree Stores, Inc. announcing its intent to acquire 138 Deal$ stores.

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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.

	DOLLAR TREE STORES, INC.
Date:  February 22, 2006	By:	/s/ Kent A. Kleeberger
		Kent A. Kleeberger
		Chief Financial Officer

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EXHIBITS

Exhibit 99.1- Press release dated February 22, 2006 issued by Dollar Tree Stores, Inc. reporting its fiscal 2005 fourth quarter earnings results.

Exhibit 99.2- Press release dated February 22, 2006 issued by Dollar Tree Stores, Inc. announcing its intent to acquire 138 Deal$ stores.

EX-99.1 CHARTER

Exhibit 99.1

PRESS RELEASE

DOLLAR TREE STORES, INC. REPORTS FOURTH QUARTER EARNINGS PER SHARE OF $0.81

CHESAPEAKE, Va. - February 22, 2006 - Dollar Tree Stores, Inc. (NASDAQ: DLTR), the nation's leading operator of single price point dollar stores, reported earnings per share of $0.81, for the fiscal fourth quarter ended January 28, 2006, an increase of 9.5% from $0.74 per share for the fiscal fourth quarter ended January 29, 2005. As previously reported, sales for the quarter were $1.079 billion, a 9.3% increase compared to $987.5 million, for the same period, one year ago.

Fourth Quarter 2005 Commentary

“We made progress on key initiatives throughout the year that resulted in improved fourth quarter performance,” said President and CEO Bob Sasser. “Our merchandise value was outstanding, the flow of inventory was much better this season and our stores were ready for the holidays. The expansion of payment type was executed seamlessly and we now accept debit cards in over 70% of the chain. Our Real Estate initiatives combined with the effective execution by our store teams resulted in opening more stores earlier in the year and increased productivity in our new stores.”

“We also continued to strengthen our balance sheet, as we reduced inventory levels and increased cash and investments while repurchasing $180 million of shares during the year.”

For the fourth quarter, gross margin was 35.3%, down from 35.5% last year. The decrease primarily reflects the impact of a slight shift to consumables in the merchandise mix and higher freight expense, slightly offset by a lower rate for distribution and occupancy costs.

Selling, general and administrative expenses, as a percentage of sales, were 22.6% in the fourth quarter of 2005, compared to 22.1% in the same quarter last year. The increase in rate reflects an increase in compensation and benefit expense, property taxes, and utilities.

Operating margin in this year’s fourth quarter was 12.6%, versus 13.4% for the same period, one year ago.

For the year, sales totaled $3.394 billion, an 8.6% increase year-over-year, on a comparable store sales decline of 0.8%. Operating margin was 8.3%, versus 9.4% one year ago. Diluted earnings per share were $1.60.

Deal$ Stores Acquisition

In a press release issued earlier today, the Company announced the pending acquisition of 138 stores and related assets of the Deal$-Nothing Over a Dollar chain, which is owned by SUPERVALU  INC. (NYSE:SVU).

“I am excited about the opportunity that this acquisition provides to expand our presence in the Midwest and Southeast regions,” said Bob Sasser, President and CEO. “We have existing logistics capacity to service all of these stores efficiently with no additional capital expenditure. Furthermore, the Deals acquisition includes a number of “combo” stores that offer an expanded assortment of merchandise including items selling for more than $1. All Deal$ stores will continue to operate under the Deal$ banner and they will provide an opportunity to leverage the Dollar Tree infrastructure in the development of a multi priced business without disrupting the single price point model in Dollar Tree Stores."

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Guidance for 2006

The Company estimates sales for the first quarter of 2006 to be in the range of $845 - $870 million. Comparable store sales performance is expected to be positive low single digit. Based upon this sales forecast, diluted earnings per share are estimated to be in the range of $0.29 to $0.31.

For the full year, the Company estimates sales will range from $3.845-$3.940 billion. This estimate is predicated on a square footage growth of 12-14%, which includes 138 Deal$ stores, or about 5% of the annual increase. Comparable store sales performance is projected to be nearly flat to positive low single digits.

Fiscal year 2006 diluted earnings per share are forecast to be in the range of $1.68 to $1.80. These estimates exclude any impact of share repurchase in 2006. The Company has $173 million available to repurchase shares under the original $300 million authorization.

Conference Call

On Wednesday, February 22, 2006, the Company will host a conference call to discuss its earnings results at 9:00 a.m. EST. The telephone number for the call is 703-639-1375. A recorded version of the call will be available until midnight Friday, March 3, and may be accessed by dialing 703-925-2533, and the access code is 844398. 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 Friday, March 3.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, April 6, 2006, by 5:00 p.m. EDT, and will remain on-line through Monday, April 10, 2006. Interested parties can access the Company’s update by dialing  757-321-5873.

As of January 28, 2006, Dollar Tree operated 2,914 stores in 48 states. For the year, Dollar Tree opened 232 stores, closed 53 stores, and expanded or relocated 93 stores. The Company’s retail selling square footage totaled approximately 23.0 million at January 28, 2006, a 12.7% increase compared to a year ago. The Company also operates a coast-to-coast logistics network of nine distribution centers.

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, will, anticipate, expect, intend, plan, forecast, or estimate. For example, our forward looking statements include statements regarding our plans for the proposed Deals acquisition, total and comparable-store sales and earnings for future periods, as well as our plans for square footage growth and share repurchase. 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 our Quarterly Report on Form 10-Q filed December 8, 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
	Timothy J. Reid
	757-321-5284
	www.DollarTree.com

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DOLLAR TREE STORES, INC.
Condensed Consolidated Income Statements
(Dollars in thousands, except per share data)
	Fourth Quarter ended						Year ended
	Jan. 28,			Jan. 29,			Jan. 28,			Jan. 29,
	2006			2005			2006			2005
Net sales	$	1,079,017		$	987,478		$	3,393,924		$	3,126,009
Cost of sales		698,648			636,747			2,221,561			2,013,470
Gross profit		380,369			350,731			1,172,363			1,112,539
		35.3	%		35.5	%		34.5	%		35.6	%
Selling, general & administrative expenses		243,907			218,512			889,124			818,988
		22.6	%		22.1	%		26.2	%		26.2	%
Operating income		136,462			132,219			283,239			293,551
		12.6	%		13.4	%		8.3	%		9.4	%
Interest expense, net		(1,789	)		(1,217	)		(8,021	)		(5,381	)
Income before income taxes		134,673			131,002			275,218			288,170
		12.5	%		13.3	%		8.1	%		9.2	%
Income tax expense		48,174			47,348			101,300			107,920
Net income		86,499			83,654			173,918			180,250
		8.0	%		8.5	%		5.1	%		5.8	%
Net earnings per share:
Basic	$	0.81		$	0.74		$	1.61		$	1.59
Weighted average number of shares		106,420			112,951			108,335			113,295
Diluted	$	0.81		$	0.74		$	1.60		$	1.58
Weighted average number of shares		106,831			113,656			108,759			113,986

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DOLLAR TREE STORES, INC.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
	Jan. 28,		Jan. 29,
	2006		2005
Cash and cash equivalents	$	65,834	$	106,532
Short-term investments		273,950		211,275
Merchandise inventories		576,545		615,483
Other current assets		27,347		36,597
Total current assets		943,676		969,887
Property and equipment, net		681,801		685,386
Intangibles, net		129,348		129,032
Other assets, net		43,575		8,367
Total assets	$	1,798,400	$	1,792,672
Current portion of long-term debt		19,000		19,000
Accounts payable		135,555		124,195
Other current liabilities		99,203		117,491
Income taxes payable		41,698		33,669
Total current liabilities		295,456		294,355
Long-term debt, excluding current portion		250,000		250,000
Other liabilities		80,669		84,105
Total liabilities		626,125		628,460
Shareholders' equity		1,172,275		1,164,212
Total liabilities and shareholders' equity	$	1,798,400	$	1,792,672
STORE DATA:
Number of stores open at end of period		2,914		2,735
Total selling square footage (in thousands)		23,022		20,444

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DOLLAR TREE STORES, INC.
Condensed Consolidated Statements of Cash Flows
(Dollars in thousands)
	Year ended
	January 28,			January 29,
	2006			2005
Cash flows from operating activities:
Net income	$	173,918		$	180,250
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization		140,717			129,291
Other non-cash adjustments		(12,238	)		21,575
Changes in merchandise inventories		38,938			(89,840	)
Other changes in working capital		35,415			35,213
Total adjustments		202,832			96,239
Net cash provided by operating activities		376,750			276,489
Cash flows from investing activities:
Capital expenditures		(139,247	)		(181,782	)
Purchase of short-term investments		(885,480	)		(465,815	)
Proceeds from maturities of short-term investments		822,805			339,035
Purchase of restricted investments		(29,944	)		-
Acquisition of favorable lease rights		(3,646	)		(6,845	)
Net cash used in investing activities		(235,512	)		(315,407	)
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		(12,206	)		(5,572	)
Proceeds from stock issued pursuant to stock-based
compensation plans		10,668			15,105
Payments for share repurchases		(180,398	)		(48,611	)
Net cash provided by (used in) financing activities		(181,936	)		61,260
Net increase (decrease) in cash and cash equivalents		(40,698	)		22,342
Cash and cash equivalents at beginning of period		106,532			84,190
Cash and cash equivalents at end of period	$	65,834		$	106,532

Return to Form 8-K

EX-99.2 BYLAWS

Exhibit 99.2

DOLLAR TREE ANNOUNCES INTENT TO ACQUIRE DEAL$ STORES

CHESAPEAKE, Va. - February 22, 2006 - Dollar Tree Stores, Inc. (NASDAQ: DLTR), the nation’s largest $1.00 discount variety store chain, today announced that it has signed a Letter of Intent to purchase stores and related assets of the Deal$-Nothing Over a Dollar chain, which is owned by SUPERVALU INC. (NYSE:SVU).

Under the terms of the proposed agreement, Dollar Tree would acquire 138 Deal$ stores including store assets, leasehold rights and certain intellectual property for approximately $30.5 million in cash, subject to customary closing conditions. In addition, Dollar Tree will purchase a yet-to-be- determined amount of inventory from Deals. It is anticipated that the transaction will be completed by the end of March.

Based in St. Louis, MO, Deal$ stores offer a wide assortment of quality general merchandise, contemporary seasonal goods and everyday consumables. The stores average 11,000 gross square feet and operate in 16 states: Alabama, Arkansas, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Missouri, Ohio, Oklahoma, Pennsylvania, Tennessee, West Virginia and Wisconsin.

“I am excited about the opportunity that this acquisition provides to expand our presence in the Midwest and Southeast regions,” said Bob Sasser, President and CEO. “We have existing logistics capacity to service all of these stores efficiently with no additional capital expenditure. Furthermore, the Deals acquisition includes a number of “combo” stores that offer an expanded assortment of merchandise including items selling for more than $1. All Deal$ stores will continue to operate under the Deal$ banner and they will provide an opportunity to leverage the Dollar Tree infrastructure in the development of a multi priced business without disrupting the single price point model in Dollar Tree Stores.

The Company will provide further commentary on this transaction, along with a review of fourth quarter 2005 operating results and initial 2006 guidance during the Company’s fourth quarter conference call at 9:00 a.m. EST Wednesday, February 22, 2006. The telephone number for the call is 703-639-1375. A recorded version of the call will be available until midnight Friday, March 3, and may be accessed by dialing 703-925-2533. The access code is 844398. A webcast of the call will be available 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 Friday, March 3.

Dollar Tree Stores, Inc. operates 2,914 stores in 48 states as of January 28, 2006.

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, will, anticipate, expect, intend, plan, forecast, outlook, or estimate. For example, our forward looking statements include statements regarding the completion of the transaction, the related terms of the transaction, and the future of the combined businesses. 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 December 8, 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

Timothy J. Reid

757-321-5284

www.DollarTree.com

Return to Form8-K