CHESAPEAKE, Va. — A focus on cost control and efficiency led to higher quarterly gross margins for Dollar Tree Stores, helping the discounter here improve profits despite a slow holiday sales season and reduced store traffic. Gross margins as a percentage of sales increased 10 basis points in the 13-week quarter, which ended Feb. 2, to 35.8%, officials said. Net profit of $94.7 million was down from the 14-week fourth quarter of 2007, but when adjusted for the extra week it improved by 17%, officials said. Sales of $1.3 billion slipped slightly overall, but improved 5% when adjusted for the extra week in fiscal 2007. Bob Sasser, president and chief executive officer of Dollar Tree, in a conference call noted that expense controls and more efficient buying helped offset fuel cost increases and improve margins. For the fiscal year, sales improved 6.9% to $4.2 billion and net earnings were up 4.2% to $210.3 million. Dollar Tree stock was up by more than 10% yesterday.

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