Good day, and welcome to the Dollar Tree, Inc. first quarter earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Vice President, Investor Relations, Mr. Tim Reid. Please go ahead.

Good morning, and thank you, Levi, and welcome to the Dollar Tree conference call for the first quarter of fiscal 2014. My name is Tim Reid, I'm Vice President of Investor Relations for Dollar Tree. Our call today will be led by Bob Sasser, our Chief Executive Officer, who will provide insights on our performance in the quarter and recent developments in our business. Kevin Wampler, our Chief Financial Officer, will provide a more detailed review of our first quarter financial performance and provide our guidance for the remainder of 2014. 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. At the end of our planned remarks, we will open the call to your questions. [Operator Instructions] And now I'd like to turn the call over to Bob Sasser, CEO of Dollar Tree. Bob?

Thanks, Tim, and good morning, everyone. This morning, we announced our results for the first quarter 2014. Comp store sales on a constant currency basis increased 2% in the quarter, driven primarily by increased traffic with a small increase in average ticket. Adjusted for the impact of Canadian currency fluctuations, the comp store sales increase was 1.9%. This was on top of a 2.1% comp in the first quarter of last year and a 5.6% comp the year before. Total sales grew 7.2%, to $2 billion. Operating income increased by $15.4 million or 7.1%. Operating margin was 11.6%, matching last year's all-time high first quarter operating margin. Net income increased 3.6% to $138.3 million. And earnings per share increased 13.6% to $0.67 compared with first quarter 2013 earnings of $0.59 per share. We believe that our model is right for all times. We offer the customer a balanced mix of consumable merchandise they need every day, alongside assortments of high-value, seasonal and basic discretionary products and all at $1. Our sales growth in the first quarter was the result of increased sales in both consumable and discretionary products with our seasonal and discretionary product growing at a slightly faster rate as planned. Top-performing categories included candy, checkout and trend products, stationery, Valentine's and Easter seasonal merchandise and frozen and refrigerated products. As was the case in the fourth quarter, we were not immune to the impacts of the unusually long and harsh winter. Weather impeded customer traffic well into March, created snarls in our merchandise flow and resulted in higher-than-planned freight, logistics and utility costs. It's not surprising then that, in terms of geography, performance in the first quarter was strongest in the southern zones led by the Southwest and the Southeast followed closely by the Midwest. Our performance was…

Thank you, Bob. As Bob mentioned, our diluted earnings per share increased 13.6% in the first quarter to $0.67 per share. This reflects our sales growth, expense control and the impact of share deliveries in the first quarter as part of our $1 billion accelerated share repurchase program. Starting with gross profit. Our gross profit margin was 34.8% during the first quarter compared with 35.2% in the first quarter last year, a change of about 35 basis points. The decrease resulted from higher freight and distribution expenses. Freight expense increased by 30 basis points reflecting higher trucking rates, driver shortages and weather-related disruptions on inbound trucking, impacting deliveries to our DCs and reducing the opportunities for back hauls. Excluding the freight impact, merchandise margin was slightly higher than the first quarter last year. Distribution expenses increased 25 basis points, primarily driven by the expense associated with our new DC in Windsor, Connecticut. This facility opened in June of last year. We should annualize the year-on-year expense impact of this additional facility in the second half. These 2 items were partially offset by reduced shrink expense, leverage on occupancy costs and continued improvements in initial markup. SG&A expenses were 23.2% of sales for the quarter compared with 23.6% in the first quarter last year. Payroll-related expenses declined by approximately 50 basis points reflecting lower expenses for incentive compensation, medical benefits, retirement plan contributions and workers' compensation. We also had lower expenses for legal fees, as well as leverage associated with the comparable store sales increase. These reductions were partially offset by increased utility costs related to the colder weather, which affected both usage and rate. Operating income increased $15.4 million compared to the first quarter last year, and operating margin remained at 11.6% compared with the 11.6% operating margin in the…

Thanks, Kevin. In summary, during the first quarter 2014, comp store sales grew 2%. Customers are visiting our stores more often, and we're attracting new customers every day. Both traffic and average sale were positive with the results being driven primarily by increased customer traffic. Our sales strengthened throughout the quarter with the highest comp sales in April. Sales momentum has continued into May. Total sales grew 7.2% to a first quarter record $2 billion. We achieved 11.6% operating margin, tying our first quarter record set last year. And earnings per share increased 13.6% to $0.67. We opened 94 new stores, expanded and relocated 28 stores and ended the quarter with 5,080 stores and square footage growth of 6.8%. We expanded frozen and refrigerated product to 112 additional stores for a total of 3,269 stores across the U.S. Our inventory is balanced and increasingly productive. Our turns increased in the first quarter and we entered the second quarter well prepared for new store growth and customer demand. And we continue to manage our capital for the benefit of long-term shareholders. We invested more than $1 billion for share repurchase over the past 4 quarters and have another $1 billion authorization remaining. Now in our 28th year, Dollar Tree has built an exemplary record of consistent, profitable growth. This performance has been the result of the collaborative efforts of tens of thousands of Dollar Tree associates working together to deliver value to every customer at every store, every day. As I look into the future, I see even more exciting opportunity. Our balance sheet is strong. The Dollar Tree business model is powerful, flexible and more relevant than ever, providing extreme value to customers while recording record levels of earnings. It has been tested by time and validated by history. We have multiple platforms for growth. The Dollar Tree brand is a benchmark of value for our customers, and there's great opportunity to grow and expand the Dollar Tree brand in the U.S. through more stores and more productive stores. The Deal$ brand is serving customers with increased value on even more categories. Dollar Tree Direct continues to broaden its reach to customers throughout North America. And we're working to build, expand and improve the Dollar Tree Canada brand. We remain committed to a concept that customers love, and we're positioned to continue growing profitably for many years ahead. We have a vision of where we want to go and the ability to execute with the infrastructure, capital, and most importantly, a talented management team that has a long history of retail success. It's a great time to be Dollar Tree. As we enter the second quarter, our inventories are clean and fresh, the shelves are full of terrific merchandise, our stockrooms are in great shape and our values have never been higher. We will now address your questions. [Operator Instructions] Levi?

[Operator Instructions] And we'll go to our first question from Scot Ciccarelli with RBC Capital Markets.

A little bit more -- I was wondering if you could give us a little bit more, Bob, on the cadence of the quarter. First of all, how large was the volatility, kind of when you look through the quarter. And then number two, any idea kind of how to size any kind of weather impact and your general thoughts on how much weather may have impacted the sales trends?

Yes, Scot. Well, basically, as I said earlier, the sales strengthened throughout the quarter. April was the strongest. There was the shift of Easter, as you know, which helped April, as well as the weather continued to improve a little bit as we got into April. The quarter was terrifically impacted by named storms. Just as a little reminder, we had 26 named storms across the season last year. 11 of those were in first quarter. And as we moved into February, there were 6 in February; there were 4 in March, almost 1 a week; and then 1 in April, the very first week of April. So as we moved through the quarter, as weather improved and as we got closer to the Easter holiday, our sales strengthened and that momentum has continued into May. Both consumables and our discretionary categories grew. Both were comp positive with the discretionary business only slightly growing at a faster rate. In terms of geography, as you might guess, the southern zones did better. Our sales were led in the Southwest followed by the Southeast and then the Midwest and, of course, the Northeast, which was the most impacted by the negative weather that was -- lagged along. Top-performing categories, we already talked about, were our candy and our checkout and our trend. Our stationery business was very strong. Valentine and Easter, seasonal, even Valentine, even with the horrible weather the week of Valentine's Day, we had acceptable Valentine's Day season. So we're pleased to have come out of that as we did. And of course, we continue to grow our frozen and refrigerated as well as our snacks and beverages.

But Bob, was the Northeast negative in the quarter?

I think we don't -- I'm not going to break it out, but I would characterize it as it was lagging, I guess.

But that, specifically, the Northeast, recovered as we got through kind of April and into May?

Absolutely. It was weather. The Northeast, as you know, was the most impacted by weather. Valentine's Day, we had storms. We had all the bad stuff that went on there. So I'm not trying to give you a weather report, just trying to share with you the cadence of the sales. Our sales strengthened because of weather improving and because of getting closer to Easter. As you went through the quarter, our sales strengthened. February into March and then into April, with April being the strongest.

And we'll go to our next question from Matthew Boss with JPMorgan.

Guys, on the gross margin front, can you speak to underlying drivers of the core merchandise margin being positive here, opportunities going forward and what you're seeing on the sourcing front today?

Yes. The -- as I've always said, we're in control of our merchandise margin and we -- our merchants have managed that just terrifically over the years. Our basic purchase markup, I guess, on our margin was solid and slightly better. The shrink also improved as a component of our gross margin. The -- sort of the drag was the transportation cost component of our gross margin.

Yes, I think just to give maybe a little color on the transportation costs. If you look at it, the weather definitely impacted us. Definitely, where we saw the biggest impact was in the Port of New York, which got backed up significantly, a big disruption there. First, the weather did -- backed it up and then there was a lack of equipment because truck chassis were not being returned and put back into use within the business. So that was a big problem. And as well as the fact that in Vancouver, we had some disruption from the truckers' strike for a period of about a week to 2 weeks, roughly. So those are definitely things that were not expected. To move freight, we had to pay some higher rates to make sure we could keep things moving, so there are some onetime costs there. I would tell you in general, though, as we go forward, we are seeing and it's built within our guidance, is the idea of the fact that there are some pressures on freight costs within our business. There is a somewhat shortage of truckers out there. In some regards, they changed the rules of operations for truckers last summer, so the amount of hours they can spend on the road and so forth, and it does have a direct impact on the industry at the end of the day. But that is built into our model and into our guidance, but we could see some continued pressure there as we go forward.

Great. And then one quick follow-up. On capital allocation, you guys had talked to comfort operating with more leverage on the books, the ASR is now complete. Can you just talk about priorities on the capital front?

Sure. I mean, I think, as you've heard me say before, as we look at it, obviously, the best use of $1 is building another Dollar Tree store. We have plans to open 375 new stores this year and 75 relocations, so 450 projects there. So that's always our first and foremost. We're going to continue to work on our infrastructure from the standpoint of we're expanding DC3 for us, which is in Joliet. We're looking at DC11, trying to put that on the board and plan that out accordingly. So those are going to be uses of capital as we continue to go forward. After that, as we've always talked about, there's acquisitions, which, historically, the last one we did was Canada. So it's not -- nothing going on there. Then you get into dividends and the Board of Directors, basically, has looked at that in the past and we've talked about that, and we really feel like we want to put our money towards growing the company. And then returning to shareholders through our share repurchase program, which is where we've been, a good way for us to return the value to our shareholders at the end of the day. So I don't think our overall thought processes have changed any -- in any regards in that way. And again, the ASR has been complete and we'll go from there.

And we'll go to our next question from Joan Storms with Wedbush Securities.

So I had a question on your merchandising and your -- the non -- I mean, the discretionary categories have jump pretty well. I know for competitive reasons you don't want to disclose a lot about that, but can you hint anything about what is going on there going forward. And also on the comp scene, tell us what you think about the consumer these days? And the multiple has been hit a little bit for a low single-digit comp versus a mid-single-digit comp. And what does it take to get sort of back to that?

Okay, Joan, I'll give it a shot here. We always talk about our merchandise assortment. It's a balanced mix of things people need and things people want. So basically, the things you need every day is faster-turning merchandise. It creates traffic in our stores. It's a reason to shop Dollar Tree. You go there for all the great values on paper goods and HBC and household supplies and all the things that you need that you consume on a frequent basis. And that adds shopping trips to our stores. It also serves our customer needs very well. Alongside that, we always strive to sell a balanced mix, which is also the discretionary merchandise. We're very proud of our party business, where our seasonal business is. We had talked about it as changing like the leaves on the trees and what that means is the fronts of our stores are always changing. We place great -- we place a lot of importance to our shopping experience at Dollar Tree. People -- customers shop Dollar Tree because we have great values on things they need and it's a fun experience. They always find something that they didn't expect. They find things for the party. They'd find things for the season. They'd find toys for the kids. And as we say, everybody leaves happy because at Dollar Tree you can still afford to splurge even in tough times and buy those things for your kids. So we always plan to sell and we manage our business appropriately, mixing out that balance between products needed and products that are discretionary. It's about a 49 to 51 discretionary to needs and sometimes it goes 50-50 and it's plus or minus in that range. And that's the way we plan our business. It's not by accident.…

And we'll go to our next question from Paul Trussell with Deutsche Bank.

Want to just ask about new store productivity. It was a little bit lighter than we had modeled in kind of your historical average, but you also opened up a few more stores than we modeled for 1Q. So just wanted to ask about maybe the timing of the openings, if that had any impact. And just what you think about new store productivity moving forward.

Well, I'm not concerned about it. It's a little lower than you might have expected. We have changed our cadence a little bit. The weather had an impact on that. We opened up in the first quarter fewer of our urban stores, which are typically the higher-margin, the higher-sales-per-square foot stores. We've got still got those coming, but we didn't open any in the first quarter. Weather had an impact. It delayed some of our openings in the first quarter, as well as impacting customer traffic. So having said that, I mean, it's all annualized number. So we've got very few weeks and days, in some cases, to use in our annualization, but it's not concerning. We still believe in the concept and our customers, when they can get out, they're shopping in our stores and I believe we're going to see the productivity rise as we go through the year.

That's helpful. And just, Bob, we've had pretty mixed results across a lot of retailers year-to-date. I just wanted to get your thoughts on the health of the consumer today. Obviously, Dollar Tree is positioned well regardless of where we're heading from an economic standpoint, but what are you sensing as you hear from customers and walk stores? Do you believe that the environment is improving a bit? Or is it still a very challenging marketplace for your core consumer?

I believe it's still challenging, Paul. The lowest demographic -- income demographic consumers have especially -- the low-middle and the lowest have especially been pressured with less in their food stamps and less in their entitlements. And then the talks about it. There's still the unemployment issues that remain high. There's always concern about how long the benefits are going to last until I get a job. So it's a worried and concerned consumer. I believe that we're well positioned as you can be. Again, we strive to offer that balanced mix. Everything is $1 at Dollar Tree. So you can come to Dollar Tree and you can buy the things you need every day and for only a little bit of money. So that's -- I don't think that has changed. It feels to me like things are improving, but it doesn't feel like the consumer has actually bought into that and they may never buy into that, Paul. I mean, I think we've gone through a time where people have been forever touched by, in some way, either through high unemployment or just the ability to run their families or run their businesses and all that goes with the down economy, I think they've been forever changed in their habits. We continue to see new customers. Our traffic continues to grow. Some of it is more frequent shopping by existing customers. Some of it are still those people that come in and say, how much is this, which is a clue that they haven't been there before because, obviously, the answer is $1.

And we'll go to our next question from Charles Grom with Sterne Agee.

Great quarter here. So, Bob, when you take a look back at the improvement in your sales per square foot over the past 6, 7 years, it's pretty impressive, I think we'd all agree on that. But since the third quarter of '12, comps have been in the 2% range, traffic is positive, but certainly, not what you were doing 5, 6 years ago. And I guess my question is when you look out over the next 5 to 10 years and you look at the opportunities within the 4 walls of the store to improve productivity, where do you think it can go? And I guess what's the pace of that and, I guess, how do you get there?

It's a -- those 5- and 10-year questions today are really tough to answer. I can tell you what we're doing. I can tell you how we think about running our business and I can tell you how we're going to continue to improve our sales per square foot. We're always about running better stores. We're always focused in our stores with initiatives that speak to increasing average ticket, increasing customer engagement, being the friendly, fun place to shop. We're always -- again, we continue to expand assortments in our store based on customer needs and you can see it in our sales as we've gone through the areas that we've expanded. Assortment-expanded SKUs, you can see are coming up at the top end of our sales. So you can't have -- there are ebbs and flows to any business, stacking comps on top of comps on top of comps. I think if you look at our 3-year stacks, you feel a lot better about it and I believe that comps can continue to improve. But there are, obviously, going to have to be a review of the overview of the last 3 years, the last 5 years and what the next year's comp to that. So we're going to keep driving our business. Our customers love what we're doing. We're in a market that value is of the utmost importance and we're clearly the people that have the value, that we've built the business based on value. Everything's $1. You just can't beat that for value. As we've gone through time, we've continued to expand what you can buy for $1 and we'll continue to do that, adding even more value as we go forward. So over the next 5 years, we're going to continue to grow. We've got a lot of more new Dollar Trees that we can open in the U.S. We have our Deal$ stores that we're using largely in our urban, high-density markets because we think that by lifting the restrictions of price point, we can have even higher sales productivity and serve those customers in those urban markets better. We have Dollar Tree Canada, which is coming along. We're expanding that business. We're up at, I think, 189 stores, somewhere around there from the 86 that we bought. So we continue to grow Canada. There's just a terrific amount of space that we can build new stores, whether it be geography or Deal$, new type store or our Dollar Tree Direct business alongside of our Dollar Tree business. So more stores, continuing to focus on sales per square foot, better stores. And over the next 5 years, our growth trajectory is still going to be amongst the highest in retail, I believe.

Okay. And just my follow-up is going to dovetail on your comments there and also the comment follow-up on Matt's question earlier about capital allocation, just want to attack it from a little bit of a different angle. In that -- of the 3 major dollar stores, you guys have historically been the most acquisitive. You did Deal$ several years ago, you went into Canada a couple years ago. Is there anything on the horizon that you guys are looking at to plug in, to enhance that growth in addition to the success you guys have had with the Deal$ stores? And you have a lot of cash on the balance sheet, you're arguably a little bit underlevered. Is there anything you would look to do to accelerate that growth?

We're always looking for good companies, and we're looking for opportunities to enter new businesses. I don't see anything right now, but we are very focused on -- our last acquisition was in Canada and we're really standing that up and getting that going in the right direction and we've got a lot of energy and focus towards that, as well as our Deal$ business. But we're always looking, we're always open to good opportunities.

And we'll go straight next question from Anthony Chukumba with BB&T Capital Markets.

So I just had a question about sourcing. I'm just wondering if there's anything that you're seeing different from a positive perspective, negative perspective, particularly given the slowdown in the Chinese economy.

We just keep driving our business and about 40% of our product comes from somewhere other than the U.S., mostly from China. I did not make the last trip, but the results of it, the April trip, were -- continue to be strong. We've hit our margin targets again. The market really is open to our kind of business and as much as we go and we actually place orders and lay down orders and we stand by our commitments, we've been -- we spent years building relationships with our Chinese, as well as all of our vendors, to continue to grow. As we've gotten larger in placing larger orders, we've involved more factories and developed more relationships. So that is -- I would characterized our foreign sourcing as being really unchanged and really a strategic advantage that we have over many, especially since we aspire to continue to thrill our customers with the types of products that are -- that we can find offshore, the things like our toy business and our party business and our seasonal business and all our stationery business. There's a lot of that product that comes from somewhere else. Domestically, we continue to drive those businesses, too. We're very proud of our relationships and, obviously, more of our business comes from the U.S. than comes from anywhere else, 60%. So continue to drive those businesses. We enjoy a terrific relationship with many of the large consumer product companies across the country. And I believe that as we continue to grow and the consumer continues to seek value, that part of our business is going to continue to improve and excel.

And we'll go to our next question from Dan Wewer with Raymond James & Associates.

Just want to ask you when you benchmark your performance in Canada against Dollarama, what would be the puts and takes? I know you won't give any specifics on comps or margins. But how much of a differential, I mean, in kind of qualitative terms, you'd be willing to give us?

As we benchmark against Dollarama -- that's a terrific company, by the way, and we're the new guy on the block, so to speak. We're the largest in the U.S. at what we do. But as we go into Canada, we're very humble and we realize that we aren't the largest there. So the first thing is they have the size, they are the large company that's been there a long time. So the growth, I think, is important for us in Canada, more stores. The brand -- building the brand in Canada, many Canadians know Dollar Tree in the U.S., but that's just -- that's not good enough. I mean, you have to be in Canada and you have to be their store of choice, so we're building the brand in Canada. We're growing, we're building size in Canada and all the while we're building store teams and people and the ability to run the Canadian business. There are desires in Canada. There are consumer needs. We're paying very close attention to that. There are things that we don't know still that we're very -- again, that we're very humble and we're willing and eager to continue to evolve to serve that Canadian customer. It's not a Dollar Tree from the U.S. in Canada, it's a Dollar Tree Canada, so building that assortment. But as we benchmark there, we're the smallest guy. We're growing. We have a big idea. And again, we're the only single -- the largest single price point operator in Canada and that's the message that we're trying to get to our consumer.

Okay. And, Kevin, when you look at your expenses per square foot, that's actually declined now -- declined 2 consecutive years. Typically, you talk about meeting a 1% or 2% comp to maintain a flat expense rate, but you're obviously doing a lot better than that, but it's not -- it doesn't appear to be sustainable in the long run, but I want to get your thoughts on the sustainability of this 1%, 2% drop in expenses per foot.

Sure. I mean, as I've said before, I know that's a metric that many of you folks use out there. We tend not to use that so much. We always at, as I've said, the line item by line item. And I think, part of it, as we've continued to grow over the last 4 or 5 years, part of it is scale, part of it is technology, part of it is initiatives surrounding certain expenses and how we can do it better. And again, when everything's $1, the pennies count and everybody realizes that it's part of our culture. It's built in from day 1. Everybody realizing that the expense side of the ledger has to be a strict focus as well. So again, I think, as I've said -- as we have said, a 1%, 2% comp typically would help us -- get us flat on our SG&A, but we're always working to try to leverage things. We've got some benefit in Q1 from -- on our medical benefits. Last year, we had huge claims. We had more large claims than ever. It was a really unusual year. Those things tend to be cyclical for some reason and so maybe this year is going to be a better year. You can't always say. But -- so that's something I can't rely on at the end of the day. But as we look at things, we always believe there's room for improvement. We always talk about continuous improvement, continuous ways to improve our business as well as the processes around them. I mean, that's really the way we go about it day in and day out. And as I said, more on a line item basis or detailed line item basis as opposed to looking at it on a per-square-foot basis.

But you had called out incentive comp. Given that the second quarter same-store sales are starting stronger than that low single-digit guidance, if that were to continue, would it be probable that your incentive comp would increase year-over-year in the second quarter?

Well, first, I would say your first statement relating to business going forward being stronger than our low single-digit comp, I don't know that I would agree with that. So let's start there at the end of the day. Let's make sure we have that right. We're just saying that...

But I thought you said it was -- April was better than 2% and then May momentum...

We said basically, that the strongest period was April, but obviously, part of that is the fact that Easter shifted later, into April. But I think what we're talking about in general is as it relates to our guidance that we've given. So let's start there. And then I think, as we think -- things like incentive comp depend upon -- we have high expectations that we will improve our business. A part of that is at the store level and another big part of it is here in the store support centers. So as we look at those things, if business improves, yes, those expenses may go up. But the hope would be because we're beating sales guidance and you actually leverage them in the long run. So I think it's kind of 2 components that go into it over time is kind of the way I would look at that.

We'll go to our next question from Dan Sinder (sic) [Binder] with Jefferies.

It's Dan Binder. I had a couple of questions, just -- first on a point of clarification around the whole Easter shift and April business. When you adjust for the Easter shift, did you still see sequential improvement, April versus March? And then my second question was around the pricing environment. You heard from Target that they're getting more promotional. They already have. Walmart has been pretty competitive since last fall. Just curious, your thoughts on the pricing environment, if you need to react at all.

Dan, since I'm the one that said -- what I said about the sales building throughout the quarter, let me just say again, sales strengthened throughout the quarter, first quarter, and momentum continued into May. All of that's in our guidance, though. We're not giving you new guidance with that comment. We did consider all that in the guidance that we gave for second quarter. As far as the competition, we see all that. I think our values are up, too. Our price is still $1, but the way we, as you know, Dan, we run our business is we offer the most value that we can at the $1 at the margins we're willing to accept overall. And I think if you shopped our stores right now, you'd find some terrific values for $1. It's still $1, but we add more to the product from time-to-time. We have our wow items out there, more wow items than ever. I believe that we're very, very competitive. And having said that, we're just different than the other guys anyway. Our price is $1 yesterday, it'll be $1 tomorrow, it's $1 dollar today and it's all about offering the most value for that $1. And as long as we can do that, then we'll be successful. We feel pretty good about our position.

One of the things that I've noticed in retail over the last several months, and just generally speaking, is retailers have experienced softer sales. You can see it in sort of the way they're staffing the stores, as labor's come out, and then you'll get these inflection points when weather improves and they seem a bit unprepared for the volume, just in terms of longer lines or out of stocks or whatever. I'm just curious if you could give us a little color on how you've been managing labor in your stores.

Well, it's pretty much the way we've managed it for years. We've looked at it on a productivity basis. And of course, we're always looking to employ techniques and labor plans and support our stores in a way that allows us to leverage and improve the productivity of our labor in our stores. We measure it, report on it, our stores have goals that they're trying to meet. As you do more sales, you get more labor, but you are trying to leverage that and that's pretty much the way we've done it for the past 10 to 15 years. I don't think you'll see any longer lines in our stores than you have seen or will see. And frankly, right now, I believe our stores is in a good position from a merchandise standpoint, from -- stockrooms in the best shape they've been in a long time. Our store teams have really done a terrific job of running and improving the standards in our stores, while at the same time, being more productive and driving the sales in the store that can support the labor. So we're going to continue to do that, our stores know how to do that and I'm real proud of whenever they come up with a better labor number because I know it just didn't happen. It's because of plan, it's because of initiative, it's because of focus and trajectorally, they're doing the right things.

And we'll take our final question today from Patrick McKeever with MKM Partners.

I had a question on the impulse initiative and just -- you called it out as checkout as a stronger area of the store during the quarter. So I'm just wondering how much of that ties into what you're doing with impulse merchandise and how that initiative is evolving. I know you had talked about doing more suggestive selling at the register, if you're still doing that. And if you look at that initiative, how would you rank it in order of the various comp drivers for the year, including, let's say, the cooler program?

It's one of the more powerful initiatives that we have, I think, for a couple of reasons: It's the first thing -- when you walk into the store, the front end of the store is the first thing you see and it's the last thing you see. So if you remember a year or so ago, we were talking about cleaning up our front end, lowering their profile, so you could see the cashiers, cashiers could see the customers, lowering their profile, remerchandising that whole front end. And we've remerchandised our check lanes, first of all, with things that you need on the way out. You might not have thought about it, but why not buy a pack of gum or something that you need, a pocket comb. There's hundreds of items up there. But that's the idea, is to offer them one last chance to buy something on that checkout tip. And in that front aisle there, you'll find new products, you'll find seasonal products, you'll find what we call trend merchandise and we're always looking for something that's new, unique. It might be seasonally relevant, it might be trend-relevant, you'll find fun, exciting things on the front end designed to come in and be bought and go away. It adds to our sales and it also adds to the customer experience in the store. So those are 2 big initiatives that we've been working with and will continue to drive comp sales for us as we go forward. And the last thing you asked about is what we call our drive item and that is our cashiers. We have an item of the week -- a drive item each week. And our cashiers across the country, as you check out, are engaging you, hopefully smiling at you, and suggest -- have you seen our new whatever, pen or whatever hand sanitizer or this just came in or would you like to buy another candy bar or things like that. So our cashiers are doing a couple of things, one, we know that our customers like being engaged personally at the front end. So it accomplishes that and it's just that one last chance to get another item in their shopping bag as they go through. So go through, test it. By the way, if they offer it to you, buy it. It helps us enforce the fact that it's really important. We appreciate some help with that.

And for the impact on -- it's obviously more of an impact on average ticket than traffic, right? Did you talk about the average ticket during the quarter? You said it was up a little bit, right?

It was up slightly. Most of our increase was due to traffic. So you've got some puts and takes there. So you're improving your front end. You're improving the impulse sales. At the same time, there are pressures on consumers from time-to-time where they may be buying less more frequently. I think that's happening. We saw some things. For instance, food stamp's not a big number for us, but our traffic on food stamps was about unchanged, but the average sale on food stamps was a little less. I think that's tied directly to the fact that they're getting less food stamps now. That program has been cut back. So you always have some puts and takes, Patrick. Some things, we're always driving our sales and, for instance, in this case, our -- it's right up there towards the top of our comps with our front end and our checkouts and our trend merchandise. But there are always puts and takes in this business. And every plus is not 100% plus. Sometimes it's 1 plus 1 equals 1.5. So that's my answer for that.

And that concludes today's question-and-answer session.

Thank you, Levi. Thanks to all of you for your participation in today's call, for your interest in our company and, as always, most importantly, thank you for your investment in Dollar Tree. Our next conference call is scheduled for August 21, 2014, when we will discuss our results for the second quarter. Thank you.

And this does conclude today's conference call. We appreciate your participation.