Family Dollar Stores Earnings: Profit Rises

S&P 500 (NYSE:SPY) component Family Dollar Stores Inc. (NYSE:FDO) reported its results for the fourth quarter. Family Dollar Stores operates more than 6,600 retail discount stores across the United States, offering consumables, home products, apparel accessories, seasonal and electronics.

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Family Dollar Stores Inc. Earnings Cheat Sheet

Results: Net income for Family Dollar Stores Inc. rose to $80.9 million (69 cents per share) vs. $79.8 million (67 cents per share) in the same quarter a year earlier. This marks a rise of 1.4% from the year-earlier quarter.

Revenue: Rose 10.8% to $2.36 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Family Dollar Stores Inc. reported adjusted net income of 75 cents per share. By that measure, the company fell short of mean estimate of $1.07 per share. Analysts were expecting revenue of $2.37 billion.

Quoting Management: “Fiscal 2012 was a year of great progress for Family Dollar. We expanded our merchandise assortment to increase our relevancy to our customers; we continued to improve the shoppability of our stores; and we repositioned our leadership team to better support our growth,” said Howard R. Levine, Chairman and CEO.

Key Stats:

Last quarter was the fifth in a row that the company saw shrinking gross margins, as they fell 0.2 percentage point from the year-earlier quarter to 33.8%. In that span, margins have contracted an average of 0.6 percentage point per quarter on a year-over-year basis.

The company has now seen net income rise in three straight quarters. In the third quarter, net income rose 12.1% and in the second quarter, the figure rose 10.7%.

Revenue has increased for four consecutive quarters. Revenue increased 9.6% to $2.36 billion in the third quarter. The figure rose 8.6% in the second quarter from the year earlier and climbed 7.6% in the first quarter from the year-ago quarter.

The company fell short of estimates last quarter after beating the mark the quarter before with net income of $1.15 versus a mean estimate of net income of $1.13 per share.

Looking Forward: Expectations for the company’s next-quarter performance are more favorable than they were a month ago. The average estimate for the first quarter of the next fiscal year is now at 76 cents per share, up from 76 cents. Over the past three months, the average estimate for the fiscal year has climbed from $3.65 per to share to $3.67.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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