99 Cents Only Stores Earnings Cheat Sheet: Profit Increases Again
99 Cents Only Stores (NYSE:NDN) reported its results for the fourth quarter. The Company’s main business is the sale of various consumer products through its retail stores at price points of mainly 99.99cent or less.
99 Cents Only Stores Earnings Cheat Sheet for the Fourth Quarter
Results: Net income for 99 Cents Only Stores rose to $17.9 million (25 cents/share) vs. $16.9 million (24 cents/share) in the same quarter a year earlier. A rise of 6.2% from the year earlier quarter.
Revenue: Rose 11.6% to $378.5 million YoY.
Actual vs. Wall St. Expectations: NDN fell short of the mean analyst estimate of 26 cents/share. Estimates ranged from 23 cents per share to 30 cents per share. Analysts were expecting revenue of $373.4 million.
Quoting Management: Eric Schiffer, CEO of 99¢ Only Stores, stated, “We are pleased with the continued progress of our long-term operational improvement programs. Continuous improvement in all areas of our cost structure has enabled us to achieve a pre-tax profit margin of 7.4% for the fourth quarter of fiscal 2011 versus 7.3% for the same quarter in the prior year, and 8.3% for the full fiscal year versus 6.9% for the prior year. Despite continued improvement in our pre-tax profit margin, our net income as a percentage of sales declined for the fourth quarter to 4.7% versus 5.0% last year. This percentage decline was primarily due to an increase in the effective tax rate from 31.9% of pre-tax income to 36.3% of pre-tax income, primarily due to one-time tax benefits in the fourth quarter of fiscal 2010.”
The company has now seen net income rise in three-straight quarters. In the third quarter, net income rose 8.8% and in the second quarter, the figure rose 34.8%.
Gross margin shrunk 1.2 percentage points to 39.9%. The contraction appeared to be driven by rising costs as the figure rose 13.9% from the year earlier quarter while revenue rose 11.6%.
Revenue has risen the past four quarters. Revenue increased 1.7% to $365.4 million in third quarter. The figure rose 2.7% in second quarter from the year earlier and climbed 4.3% in first quarter from the year-ago quarter.
The company fell short of estimates last quarter after being in line with expecations the quarter before with net income of 38 cents per share.
Competitors to Watch: Dollar General Corp. (NYSE:DG), Family Dollar Stores, Inc. (NYSE:FDO), Dollar Tree, Inc. (NASDAQ:DLTR), Big Lots, Inc. (NYSE:BIG), Target Corporation (NYSE:TGT), Fred’s, Inc. (NASDAQ:FRED), Costco Wholesale Corp. (NASDAQ:COST), Wal-Mart Stores, Inc. (NYSE:WMT), Gordmans Stores, Inc. (NASDAQ:GMAN), and Amazing Savings, Inc (ODDJ).
Stock Performance: Shares of NDN are up 0.84% from the previous close.
(Sources: YahooFinance, Xignite Financials)