Family Dollar Stores Inc. Earnings: Third Consecutive Quarter of Profit Growth

S&P 500 (NYSE:SPY) component Family Dollar Stores Inc. (NYSE:FDO) reported its results for the first 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 Earnings Cheat Sheet for the First Quarter

Results: Net income for Family Dollar Stores Inc. rose to $80.4 million (68 cents per share) vs. $74.3 million (58 cents per share) in the same quarter a year earlier. This marks a rise of 8.1% from the year earlier quarter.

Revenue: Rose 7.6% to $2.15 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: FDO beat the mean analyst estimate of 67 cents per share. Analysts were expecting revenue of $2.17 billion.

Quoting Management: “Today, we reported another quarter of record earnings. We opened 101 stores, nearly 20% more than in the first quarter last year, and we entered an important new market, California. We delivered a 4.1% comparable store sales increase on top of a 6.9% increase last year, and we expanded first quarter operating margin to the highest rate since 2004,” said Howard Levine, Chairman and CEO. “The environment continues to be challenging for our customers, and our experienced team remains focused on executing our long-term strategy. We have tremendous opportunity to expand our market share further and improve our store productivity, and I am confident that our investments to better meet the needs of our customers will continue to position us to deliver strong financial returns for our shareholders.”

Key Stats:

The company has now seen net income rise in three straight quarters. In the fourth quarter of the last fiscal year, net income rose 8% and in the third quarter of the last fiscal year, the figure rose 6.5%.

Gross margin shrank 0.8 percentage point to 35.3%. The contraction appeared to be driven by increased costs, which rose 8.9% from the year earlier quarter while revenue rose 7.6%.

Revenue has risen the past four quarters. Revenue increased 9.1% to $2.13 billion in the fourth quarter of the last fiscal year. The figure rose 7.8% in the third quarter of the last fiscal year from the year earlier and climbed 8.3% in the second quarter of the last fiscal year from the year-ago quarter.

The company has now beaten estimates the last two quarters. In the fourth quarter of the last fiscal year, it topped expectations with net income of 66 cents versus a mean estimate of net income of 64 cents per share.

Looking Forward: The average estimate for the second quarter remains unchanged at $1.14 a share. For the fiscal year, the average estimate has moved up from $3.64 a share to $3.65 over the last ninety days.

Competitors to Watch: Dollar General Corp. (NYSE:DG), 99 Cents Only Stores (NYSE:NDN), Dollar Tree, Inc. (NASDAQ:DLTR), Big Lots, Inc. (NYSE:BIG), Wal-Mart Stores, Inc. (NYSE:WMT), Target Corporation (NYSE:TGT), Fred’s, Inc. (NASDAQ:FRED), Costco Wholesale Corp. (NASDAQ:COST), Walgreen (NYSE:WAG), CVS (NYSE:CVS) and Gordmans Stores, Inc. (NASDAQ:GMAN).

Stock Performance: Shares of FDO were up 1.4% from the previous close.

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

 

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com