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Family Dollar Q4 profit meets Street view, sales rise

Published: 22:42 03 Oct 2012 AEST

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Discount chain Family Dollar's (NYSE:FDO) stock rallied in pre-market trade after saying fourth-quarter earnings grew amid higher revenue as more people frequented its stores and spent more.  

Net income grew to $80.9 million or 69 cents per share, in the fourth quarter, compared to a $79.8 million profit, or 66 cents per share, seen in the same period last year.

Removing one-time items such as a litigation charge, the company actually earned 75 cents a share. 

Sales jumped to $2.36 billion from $2.13 billion a year earlier. 

Analysts polled by Bloomberg expected a per share profit of 75 cents, on sales of $2.4 billion during the quarter that ended August 25.

Shares, in Wednesday pre-market trade, rose 3.02 per cent touching $67.99 each on the New York Stock Exchange.

Comparable store sales increased 5.4 per cent, as more people visited the company's stores and spent more.

Same store sales are a key metric to gauge a retailer's financial health as they exclude results from shops that have recently opened or closed during the year. 

Gross margin narrowed to 33.8 per cent from 33.9 per cent, as cost of sales and input costs rose.

Family Dollar's board declared a quarterly dividend of 21 cents a share. Shareholders will get the payout on October 15.

The company, which sells everything from food to laundry detergent and home decor, said it opened 475 new stores in fiscal 2012, including 41 stores in California. 

Looking ahead, it expects comparable store sales to increase between four to six per cent in the first quarter of 2013.

It also expects to see per-share earnings of around 69 to 78 cents per share. Analysts expect 79 cents a share in first quarter. 

For fiscal year 2013, the company projects a per-share profit of $4.10 to $4.40, compared to the $4.24 estimated by analysts.

It plans to open 500 new locations, and close between 70 and 90 stores.

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