Expanding base drives Family Dollar
Brent Felgner -- Gifts & Dec, December 22, 2003
With holiday gift-giving pulling sales away from basic consumables, first-quarter sales and profits were both slightly off their earlier strong pace at neighborhood value retailer Family Dollar Stores Inc., but still came in with double-digit gains.
Helped by rising sales, driven by continued expansion, profits climbed 12.1 percent, to $64.5 million from $57.5 million last year.
Sales advanced by 12.3 percent, to $1.2 billion from $1.1 billion, and the acid-test gauge of same-store sales improved by 2.6 percent.
Results were somewhat off their stronger pace during the third fiscal quarter, when earnings improved by 13.8 percent; sales rose by 14.2 percent; and same-store sales advanced by 4.6 percent.
"When consumers begin to focus on basic consumable merchandise in January and February, as opposed to the focus on seasonal goods in November and December," sales should rebound to historical pre-holiday levels, the company said. "Sales to date have been below plan," for the holiday period, and the company said it expects same-store sales in December will be flat to up two percent, weaker than an original forecast of a two to four percent increase for December. During January and February, same-store sales are expected to rise by three to five percent.
If comps for the quarter ended Feb. 28 come in with a two to three percent increase, earnings for the second fiscal quarter should increase by 10 to 12 percent, the retailer said.
Sales of hardlines continued to outpace softlines during the period. Same-store sales of hardlines increased about 3 percent, substantially ahead of the 1.1 percent growth in softlines.
Customer count, as measured by the number of register transactions in existing stores, improved by 2.3 percent during the first fiscal quarter, while the average transaction increased slightly, by 0.2 percent, to $8.72.
Family Dollar Stores Inc.
|Qtr. 11/29 (x000)||2003||2002||% chg|
|Oper. income (EBIT)||101,499||90,517||12.1|
|Per share (diluted)||0.37||0.33||12.1|
|Average gross margin||34.7%||34.4%||—|
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