Family Dollar 2Q profit up, cuts full-year outlook PDF  | Print |  E-mail
Written by Associated Press   
Wednesday, 10 April 2013 08:24

MATTHEWS, N.C. (AP) — Family Dollar Stores Inc. said Wednesday that its fiscal second-quarter net income rose 3 percent, as more customers came in to its stores and spent more. An extra week in the period also helped.

Dollar stores have continued to see an influx of shoppers since the recession as consumers look for bargains on everyday goods and other items.

But Family Dollar lowered its full-year earnings forecast, saying that sales of discretionary items continue to be pressured by shoppers dealing with financial constraints and unseasonably cold spring weather.

Its shares fell almost 4 percent in premarket trading.

For the period ended March 2, the discounter earned $140.1 million, or $1.21 per share. That's up from $136.4 million, or $1.15 per share, a year earlier.

The extra week contributed 7 cents per share to the current quarter's earnings.

Analysts expected earnings of $1.22 per share, according to a FactSet poll.

Revenue for the Matthews, N.C.-based company increased 18 percent to $2.89 billion from $2.46 billion, bolstered by the extra week. This matched Wall Street's average estimate.

Family Dollar said that sales of consumables rose 26.6 percent, mostly from strong sales of tobacco, food and health and beauty products.

Revenue at stores open at least a year climbed 2.9 percent. This figure is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.

Chairman and CEO Howard Levine said in a statement that delayed tax refunds hurt Family Dollar's results at the end of January and beginning of February, but sales trends started to improve toward the quarter's end as consumers began to receive their tax refunds. Family Dollar has more than 7,600 stores in 45 states.

Family Dollar anticipates fiscal 2013 earnings between $3.73 and $3.93 per share. Its prior guidance called for earnings of $3.95 to $4.20 per share. Analysts expect earnings of $3.96 per share.

The retail chain operator predicts third-quarter earnings of 98 cents to $1.08 per share and fourth-quarter earnings of 85 cents to 95 cents per share.

Wall Street forecasts third-quarter earnings of $1.18 per share and fourth-quarter earnings of 88 cents per share.

Its shares dropped $2.79, or 4.7 percent, to $57.01 in trading 90 minutes ahead of the opening bell. Its shares are down from a 52-week high of $74.73 in mid-June 2012. They hit a low of $54.06 in late February.


Copyright 2013 The Associated Press.

 

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