Thank you for standing by. Good day, and welcome to the Dollar Tree, Inc.'s Fourth Quarter Earnings Conference Call. As a reminder, today's call is being recorded. And at this time, I'd like to turn the call over to Mr. Tim Reid, Vice President of Investor Relations. Please go ahead, sir.

Thank you, Mike. Good morning, and welcome to the Dollar Tree Conference Call for the Fourth Quarter 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 the business. Kevin Wampler, our Chief Financial Officer, will provide a more detailed review of our fourth quarter financial performance and provide our guidance for 2013. 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. [Operator Instructions] Now I'd like to turn the call over to Bob Sasser, our President and CEO. Bob?

Thanks, Tim. Good morning, everyone. Welcome to the call, and thank you for your continued interest in Dollar Tree. This morning, we announced our sales and earnings for the fourth quarter of 2012. I'm pleased to report that fourth quarter comparable store sales increased 2.4%. This was on top of a 7.3% increase in the fourth quarter last year. This increase was split somewhat evenly between traffic and average ticket with a 1% gain in traffic and a 1.4% increase in average basket size. Total sales increased 15.4% to $2.25 billion. Anecdotally, this was the first $2 billion quarter in the history of the company, and it was, as always, achieved largely $1 at a time. In terms of geography, performance in the fourth quarter was relatively consistent across the country as all zones achieved positive comp store sales. The highest comps came from New England and the Midwest. This was followed closely by the Southwest, the Southeast, Far West and the mid-Atlantic. Sales growth in the fourth quarter came from a mix of both basic and discretionary products. Our top performing categories include housewares and home products, stationery, health care products, party supplies, food and beverages. Comps were positive every month, with our strongest performance in December. Earnings for the fourth quarter were $1.01 per share. This represents a 26.3% increase over last year's $0.80 per share. Operating margin for the fourth quarter 2012 was 16.2%, an increase of 70 basis points over the fourth quarter last year. And net income rose by $40.7 million or 21.7% to $228.6 million. These results include the impact of the 53rd week, which contributed approximately $125 million of sales and $0.08 earnings per share. For the full year fiscal 2012, comp store sales increased 3.4%. That's on top of a 6% comp…

Thanks, Bob. As Bob mentioned, our diluted earnings per share increased 26.3% in the fourth quarter to $1.01. The increase resulted from our sales growth, a 15 basis point improvement in gross profit margin and a 55 basis point reduction in total SG&A expense compared to the fourth quarter last year. Sales and earnings for the quarter were also favorably impacted by the addition of the extra 14th week, consistent with the 53-week retail calendar, which contributed $125 million of sales and $0.08 to earnings per share. Our gross profit margin grew to 37.9% during the fourth quarter compared to 37.8% in the fourth quarter last year. We achieved strong leverage in occupancy and distribution expenses, reflecting the impact of the 53rd week and the increase in comparable store sales. We also achieved reductions in both shrink and markdown expense as a percent of sales. The shrink improvement came primarily from our Canadian operation, reflecting the full implementation of our SKU-based inventory system for both periods. The improvements were partially offset by increased freight cost, due to our higher trucking rates and the impacts of the continuing shifts in product mix, as basic consumable products increased by about 60 basis point as a percentage of sales in the fourth quarter. SG&A expenses were 21.7% of sales for the quarter, compared with 22.2% reported in the fourth quarter last year. Payroll-related expenses declined by approximately 25 basis points, due to lower incentive compensation expense compared with last year, partially offset by an increase in store payroll as a percent to sales. Depreciation declined by 15 basis points, helped in large part by the extra week. And operating expenses declined by approximately 10 basis points, due to reduction in insurance and utility expense as a percent of sales. Operating income increased $61.5…

Thanks, Kevin. Once again, I'm very pleased with our company's performance in the fourth quarter and for the year of 2012. In summary, our comp store sales increased 3.4% and total sales grew 11.5% to a record $7.4 billion. Operating margin increased by 60 basis points to 12.4%. That's the best in the past 12 years, and earnings per share increased by 21.4%, excluding the positive impact of the 53rd week and the gain from the sale of Ollie's. We opened 345 new stores in 2012. We expanded and relocated 87 stores and we ended the year with 4,671 stores and square footage growth of 7.7%. Last year, our new stores achieved the highest sales per square foot in 12 years since 2001 when our average store size was much smaller. We expanded frozen and refrigerated product to 329 stores for a total of 2,549 stores across the U.S. At Deal$, new customers are pleased to find surprising values on consumer basics, and you can see it in the results. Comp sales at Deal$ benefited from both increased traffic and increased average ticket. Customers are shopping more frequently and buying more on each trip. We opened 41 new stores in Canada, representing a 40% increase in our Canadian store base, and we're beginning to translate our investments in systems and to better merchandise assortments for our Canadian customers. Significant enhancements to Dollar Tree Direct, such as expanding bright pack, enhancing our mobile capability and increasing our social media presence are attracting more customers. In order to efficiently support our continued growth, we broke ground on a new 1 million square foot DC in Windsor, Connecticut, and we've announced plans for the expansion of our Marietta, Oklahoma DC. As always, we continue to manage capital for the benefit of long-term shareholders. Last year, we repurchased $340.2 million of our stock. We sold our interest in Ollie's in the third quarter with a gain of $60 million and a contribution of $38 million to net income, and we executed a 2-for-1 stock split in June. 2012 was another great year of great accomplishment, and I will tell you that we're singularly positioned to do even better in the future. We have a vision of where we want to go and the infrastructure and capital to make it happen. We're opening new Dollar Tree stores, and there's plenty of room to grow. We're growing the productivity of our stores in both new stores and in comp stores. We're growing through new formats, like Deal$ and Dollar Tree Direct, and we're growing through expanded geography. Canada provides a great opportunity for substantial growth. We will now address your questions. [Operator Instructions]

[Operator Instructions] We'll take our first question from Dan Wewer with Raymond James. Daniel R. Wewer - Raymond James & Associates, Inc., Research Division: Can you talk about what changed from the third quarter when same-store sales were struggling to be slightly positive to a 2.4% gain in the fourth quarter? In particular the comparison actually became more difficult during the fourth quarter. And also curious as to why you're not expecting same-store sales to accelerate in the second half of 2013 given the comparisons become quite a bit easier.

Well, Dan, in reflecting back over the last year, the third quarter, we were up against a big comp in third quarter, too, as I remember. We were especially up against that big comp in our consumer products. It was probably the highest, you didn't know that, but the highest consumer products comps that we were up against for the year. So there's a little difference and when you're looking at third quarter versus fourth quarter about what we're selling and the mix of what we're selling. Of course, in fourth quarter, we had a couple -- we had the holidays. And at Dollar Tree, we're always -- we come in to our own at the holidays. And I think that's what you saw. We were up against in fourth quarter the largest comp of the year and the largest quarter of the year, and it came out with a 2.4% comp. And I think it was just really great execution. We invested into stores, standards and quality, and we've got great execution. We had great merchandise in the fourth quarter, great values. And by that, we overcame the 7-plus percent comp from the year before. As to your second question, I believe about this year in the second half, we're really excited about the second half of this year. We're giving guidance to you based on what we know and from internal and what we see from external. We can -- we've given first quarter guidance and then guidance for the year. In uncertain times, our guidance -- our visibility of first quarter is a lot better than it is of fourth quarter. So we're factoring in some of the uncertainty in the business that we're looking forward. I do expect the second half of the year to be particularly strong. So that's how we got to the guidance, though. We know what we know, less visibility the further you get out. Daniel R. Wewer - Raymond James & Associates, Inc., Research Division: Let's just -- if you're right, let's say that the same-store sales are in fact low single digit for all of fiscal year '13, historically, if you look at the inflation pressure at the store level, it runs about 2% to 3% a year. Do you see any opportunities to ratchet down the rate of expense growth so that you have a chance to get expense leverage with only 1.5% or a 2% comp?

Dan, we've proven we can get leverage on 1.5% or 2% comp. Third quarter, we've got leverage on our expenses. This year, 1.6% comp. Fourth quarter, 2.4% comp. We've got leverage on expenses. So yes, there's continued opportunity to leverage our expenses on those low single-digit comps as we go forward. And we intend to, by the way.

We will go next to Matt Nemer with Wells Fargo Securities.

Could you talk to any impact that you've seen from the payroll tax or the delayed tax refunds and if trends in January and February are any different than what you saw during the full quarter?

Look, the consumer is under pressure. Burdened and concerned is the way we sort of characterize the consumer right now. They're facing not only higher payroll taxes but rising gas prices. And with the tax refunds being delayed, they really are under pressure. Overall, less money to spend and you add to that job concerns and uncertainty that everybody sees out there right now. But at Dollar Tree, we think of ourselves as part of the solution. We're seeing the effect on the consumer. But we think we're part of the solution and a destination for a cash-strapped customer that's trying to balance their budget. We have all the things that you need. Over half of what we sell now, 50.1%, are products that are needed most often and must-haves in everyday life, high value and they're only $1. And we're -- when our customers are in the store, they can still splurge at Dollar Tree. On the discretionary products, yes, you can afford it at Dollar Tree. It maybe discretionary, but it's only $1 also. So we believe as we've said for years, we are right for all time. We believe we're more relevant today with the consumer under pressure than we've ever been. And we think that's going to continue for a few years, several years.

Okay, great. And then secondly, can you talk to the cadence of the cooler, freezer expansion this year? And then are there any other significant SKU additions or deletions planned for this year?

No. The cadence is going to be throughout the first half, especially and then -- and maybe into third quarter. The -- we take a little break around Easter. We don't want to do anything to disrupt our customer shopping experience around that important time of the year. But we're rolling out the 475 pretty regularly throughout the year, especially in the first half. What was the second question?

Any SKU significant category expansions or SKU additions this year?

Yes. We're looking at across the business. We're looking at where we think we have opportunities to increase our market share, to drive sales, to drive margins. You're going to see expansions in our stores through the course of the year in our household products area, in our Candy, snacks and beverage area. In our stationery business. We're very excited about our stationery business. And also in our party business. So as we look at our -- in addition to 475 more stores with frozen and refrigerated product, we're expanding a lot of variety categories in the business. We're also -- we have and continue to reengineer the front ends, 40% more SKUs on the front ends, permanent homes for our drive items, more and better customer engagement at the front of the store. We really want our customers to be challenged by great value and to purchase great product from the time they enter the store until the time they leave the store. So you check out, assortments are there, more SKUs, better variety, a lot the value, ever-changing mix on the front end of the stores, the front tables, the items of the week and especially in the seasonal department.

[Operator Instructions] We'll go next to Aram Rubinson with Nomura.

Can you tell us about your customer a little bit? Specifically I'm curious how they index to tobacco and to alcohol. I guess, what I'm trying to drive at is whether or not that push by Family Dollar and Dollar General to those categories even though they're different formats may have any impact on your own business or customer.

Well, I guess, our customer probably indexes the same as their customer does to tobacco. We have no plans to add tobacco in Dollar Tree stores. It's bad for you, but it's also bad for our margins at Dollar Tree. So there are no plans for tobacco. We are going to continue driving sales through, again as I said, to the earlier question, we're really excited about the frozen, refrigerated business rolling out another 475 stores and expanding a lot of our variety categories, as well as expanding our wow items through the year. In times where consumers are in need of value, we've always been able to step it up and offer even more value for the dollar. We're looking to do that throughout the year this year with what we call our wow items, bigger sizes, bigger savings, still just $1. And by the way, operational excellence, we put great value on running great stores and a shopping experience that our customers find pleasurable.

And if you don't mind a follow-up about inventory management. Your inventory management has been fantastic for many years. So my question is a little counterintuitive. But I'm wondering whether or not you might be able to sell more if you stock more inventory, again I know it's counterintuitive. But can you and have you tested whether plugging inventory can drive enough incremental sales from here to justify the investment?

Yes. Just speaking anecdotally to that and not to figures, but the -- more inventory doesn't always equate into more sales. And what we want to have is a right amount of inventory in our stores for our customers when they want to buy it. So our opportunity continues to be the supply chain and delivering the right amount of inventory at the right times. We can still increase our turnover. We can still lower our average inventory levels and still satisfy our customers even better, with less inventory in some cases. So I do appreciate the counterintuitive question. It's the one that our merchants ask me all the time. But at the end of the day, the proof is in the pudding, and high inventories do not equal high sales. It's all about the right merchandise in the stores and then the productivity of that.

We'll go next to Matt Boss of JPMorgan. Matthew R. Boss - JP Morgan Chase & Co, Research Division: From a competition standpoint, have you seen any impact on your traffic from a competitive standpoint, any recent actions worth noting from your peers? And are you feeling any incremental pressure on any categories from a pricing perspective as a result of anything you've seen out there recently?

We're looking at competition all the time. We watch them closely. I have great admiration for what they do. But you've heard me say this before, we're just different. And we're small and we're convenient and we're well located, where middle America either lives or shops or both. At Dollar Tree, everything is $1. So the idea of staying focused on what we do the best is what we're about. The -- in a Dollar Tree store, 10,000 square feet, everything is $1. It's an honest proposition. It is disarming to the customer, and that's our goal is to continue to exceed their expectations for what they can buy at a Dollar Tree. We do watch the competition. I do watch what they do. We respond really more to the customer than we do what the competition is doing, and that has worked well for us. Matthew R. Boss - JP Morgan Chase & Co, Research Division: Okay. And then on more home discretionary. Have you seen -- can you talk about any trends in the quarter on the non-consumable side? Any bright spots in home or seasonal? And any in-store initiatives to drive the basket going forward? And then finally, tax refunds are beginning to trickle back in. Have you seen any improvement over the last couple weeks?

I would tell you, in the last couple of weeks, the first -- and we're in the year, what, 3 weeks now. And it's a story -- 2 stories on this year. 3 weeks at end of the year, I'll share with you what I think the story so far is and what the changes could be. But first of all, we had a terrific Valentine's Day. We don't break all that stuff out. It's too early to report. But I do want to tell you that Valentine's Day occurred and it's probably the best sell-through we've had in years and years. I was extremely pleased with our Valentine's business. On the flip side of that coin, we've had the worst weather. We've had through the center of the country and then up the East Coast, seems like there's a storm a week. And so that had been sort of a drag on our business. Overall, it's 3 weeks in, and we're -- everything -- we're still -- we just gave you our guidance. So all of that is baked into that. But that has been more of what we've seen. It's really hard to see when those storms are sweeping through and dumping all that snow and closing stores, and people are losing electricity and can't drive. It's really difficult to see what the core power of the business is in these past 3 weeks with all the disruptions from storms and then of course the Valentine's holiday that we had. My feel is, though, that as the refund checks get out that people will be out shopping. Those people that get them will be spending them as they have in the past. That's a good thing. My feeling is that as the economic environment, throughout the year, becomes more transparent, and it will, and there'll be more visibility. And I feel that things are going to improve over what they are now for the consumer that we'll see the impact of that. We prefer more people working. We prefer more certainty, less uncertainty. And I'm hopeful that we can see that. And in the meantime, we are absolutely zeroed in on the customer that is under pressure from high gas prices, from the tax refunds being later and from the higher taxes. So if you're under pressure, by gosh, we want to have it. When you come to our store, we want to have the things you need. We want to have them in stock. We want to exceed your expectations with more value on the things that you need. And we want you to have a fun shopping experience, so that's where we are.

[Operator Instructions] We'll go to Stephen Grambling with Goldman Sachs.

Just to change gears a little bit, maybe if you can talk to just your thoughts on the buyback and maybe the willingness or ability to take on leverage at all to even increase the buyback going forward.

Sure. I mean, obviously, as we look at our capital allocation every year and we put a lot of thought into it. And obviously, our first priority is to fund the business and its growth. And as we've always said, the best use of any dollar is to build another Dollar Tree store, which we're doing plenty of that. And as Bob said, we have a lot of room for growth out there, so that's going to continue. And as -- we spent more the last year or 2 on infrastructure from the standpoint of expanding our distribution network as well. So new [ph] 10 up in Windsor, Connecticut, the total price on that is about $97 million on an overall basis and another $25 million for Marietta. So obviously, we are continuing to fund the business through that manner. From a share repurchase standpoint, obviously, it has been an important part of what we've done and we do believe it's very important as a way to return to our shareholders. And $340 million this past year, $645 million in 2011 and $414 million in 2010. So it obviously has been a big piece of it, and we still have $860 million outstanding in our authorization. That's one piece. Obviously, as we always look at acquisition. If there's something out there that makes sense, we're open to that. We haven't done anything since Canada, which we purchased in the fall of 2010. But obviously, we always keep that consideration out there. And the board and the company looks -- talks about dividends from time to time. We do believe we're in a point where we want to do that. So as we look at share repurchase, we're looking at it as a great way of returning value to our shareholders.…

Great. Then one quick follow-up, if I may. This one maybe for Bob. You had referenced that you're still below your prior peak sales per square foot. I'm wondering is that a target that you think that you can reach longer term even with a bigger store. Is that kind of the appropriate way to think about it?

Yes. We think about it as year-over-year growth, incrementally improving our productivity of our stores, our new stores, our existing stores. Those small stores years ago were 5,000 square feet and they pretty much peaked out in year 1 and the comps then became stubborn, if you remember that. The new larger stores, when we started opening them, sales per square foot went down, but it gave us a longer runway by which we could serve more customers for a longer period of time without reinvesting in the store and expanding the store. So we've been building it back over the years. We continue to build it. And yes, there's still plenty of opportunity to drive sales per square foot in all of our stores.

We'll go next to John Zolidis with Buckingham Research.

A question, if we look back over the course of the year and Bob, I noticed your tone today is considerably more upbeat than at the Analyst Day when there were some difficult months in there. What gives you the confidence given the volatility we saw last year that in 2013 we won't see similar volatility in comp trend? How do you feel about the business, the consumer? Maybe with more distance looking back, what happened in the October quarter? And how do we, as investors, feel good that the trends can be more consistent as we go forward?

Yes. John, just backing up and looking at the past year, it was a terrific year. Even at our Investor Conference, I was upbeat about the business, the longer-term view of the business. And if you look back at third quarter, I think we had record operating margin and higher inventory turns. And we didn't like the comp, 1.6% comp. We always want more. But the P&L was just really spectacular, frankly. So we have every reason to be proud of third quarter. We came at -- it was a big quarter to be up against. We came in the fourth quarter, another big quarter. At the Investors Conference, if you remember last year, I was saying, "We're giving you the information on how we looked at third quarter. And oh, by the way, fourth quarter was going to be a big hurdle for us." And I didn't look at that as not being upbeat, I looked at it as just being transparent and reminding you of what we were facing and how we were going to go about it. So that's what we did. And at the end of the day, I'm really proud of third quarter. I'm really proud of fourth quarter and the year. I always want more comps. I always want higher operating margin. I especially want high returns. So those are the things that we're focused on. I think maybe what gives me confidence going forward -- it is tough calendar. We know that and we planned for it. Easter is early. Easter is not good for the top line growth typically, but we planned for that. It's a tough fourth quarter. It's 6 less days -- selling days between Thanksgiving and Christmas. We planned for that. We have exciting plans for third quarter of…

[Operator Instructions] We'll go next to Scot Ciccarelli with RBC Capital Markets.

Bob, can you talk about what you guys are seeing on merchandise margins? And then the second question is going to be what are your expectations for the Canadian operation from a profitability standpoint for '13?

Well, let me start with the second one first. The -- Canada, we're really excited about. We're still in investment mode. The -- it was about a $0.02 to $0.03 pressure on this year's earnings. For next year, we have plans. We think that we're going to improve over that. But we still have some investments to be made. And I think for Canada, the opportunity we're seeing growth in the top line next year. We're excited about that. We're getting our stores re-branded. And with the re-branding, remix, re-merchandise and bringing to bear all of the information [ph] that we put in. Only a year ago now, we're just starting to see the numbers from that. So I think there's going to be a payback from that. So there could be still some pressure in 2013 on the bottom line for Canada. But less than this year. And this year was only $0.02 to $0.03. We're investing in our future in Canada. As I said, we think we can open around 1,000 stores there. And in order to do that, we want to get it right in the beginning, and that's what we're doing. The margin, overall, there's -- I've said this before and I'll say it again, we're in control of our margin. We don't planogram items. There's nothing that we have to have. Our buyers, our merchants are encouraged to offer the highest value for $1 price point at a margin that we are willing to accept. And the one we're willing to accept is the one we planned. So we're just about always going to hit our margin on items and on departments and on categories and subcategories. If you look at any of the -- most of the margin, gross margin changes which we've been…

And our final question will come from Peter Keith with Piper Jaffray.

I was hoping you could just give us the stats around your credit and debit card penetration and perhaps provide some commentary just on how the MasterCard acceptance to 75% of the stores has been received initially in the fourth quarter.

Sure, Peter, I'd be glad to do that. So in general, between debit and credit, it's basically -- for the year, it was roughly about 38%, 39% of sales. So it continues to increase a little bit. We've seen basically -- in the fourth quarter, we did see strong growth in the credit card business. It was up about 180 basis points. So -- and again, that we rolled -- as you said, we rolled MasterCard out to additional 3,500 stores, roughly, leading into the fourth quarter. So it was obviously well received. Anecdotally, we heard from a lot of stores where customers were very happy to see that we're now accepting it chain-wide. So we do feel that it has been successful. And so overall, the expectation is as the industry continues to grow, we expect our shift to debit and credit to continue, although it's obviously not near what it was a few years ago when we had initially put it in place.

Okay. That's all very good to hear. And I guess just to follow up on that, the 180 basis points shift in credit would be pretty sizable from what you guys have had during recent years, and MasterCard is a pretty widely held card. So is that -- as sort of awareness is building, are you seeing that credit shift actually accelerate as the months go by? And then kind of coupled with that, your ticket growth was one of the best you've had in, I guess, about a year. Is the ticket growth being impacted by that MasterCard acceptance as well?

I would say in general, the 180 basis point increase, as we look at it, I really believe is, as we've analyzed it, it's where it came from. Part of that conversion is people -- half of that conversion is people are paying cash previously that are now paying with a credit card and the other half is somebody who changed from a card they were using maybe to MasterCard. So you might have seen some people leave debit and go to credit, in some instances even. So I think in general from a ticket perspective, it's obviously beneficial to have our average ticket for a credit/debit transaction is significantly higher than a cash transaction. So it's not a bad thing to get that conversion. I think it's a small piece of the pie as far as the growth in ticket. I actually believe that a bigger piece of it always relates back to the merchandise in the stores and the store operators setting up great displays. And we've done work around our front ends, impulse items and things like that, which I think are important as we continue to go forward and is a big initiative for us on an overall basis. So I think that's probably more important to the overall ticket.

At this time, I'd like to turn the call back to Mr. Reid for any additional or closing comments.

Thank you, Mike, and thanks to all of you for your participation in the call today, particularly for your interest and most importantly for your investment in Dollar Tree. Our next scheduled conference call will be on May 23, 2013, when we announce the results from our first quarter. Thank you again.

And again that does conclude the Dollar Tree Inc.'s Fourth Quarter Earnings Conference Call. We do appreciate your participation. Have a good day.