(Source: Business Wire)
Family Dollar Stores, Inc. (NYSE: FDO) today reported that net income per diluted share for the third quarter of fiscal 2009 ended May 30, 2009, increased 34.8% to $0.62 per diluted share compared with $0.46 per diluted share in the third quarter of fiscal 2008 ended May 31, 2008. Net income for the third quarter of fiscal 2009 increased 35.5% to $87.7 million compared with net income of $64.7 million for the third quarter of fiscal 2008.
"In today's environment, Family Dollar's commitment to value has great appeal. Customers are shopping us more frequently and relying on us to meet more of their basic needs. As a result, we continue to gain market share," said Howard R. Levine, Chairman and Chief Executive Officer.
"For fifty years, our strategy of providing customers with value and convenience has enabled us to weather past recessionary cycles well. But, we also have experienced strong growth during recovery periods as customers have increased their discretionary spend," continued Levine. "While we can't predict when the current environment will improve, the investments we are making to be more relevant to our customers and to improve the in-store experience position us well to meet our customers' evolving needs."
As previously reported, net sales for the third quarter of fiscal 2009 were $1.843 billion, or 8.3% above sales of $1.702 billion for the third quarter of fiscal 2008. Sales in comparable stores increased 6.2%. The increase in comparable store sales was a result of increased customer traffic, as measured by the number of register transactions, and an increase in the value of the average customer transaction. Sales in the third quarter of fiscal 2009 were strongest in the Consumables category.
Gross profit, as a percentage of sales, was 36.2% in the third quarter of fiscal 2009 compared to 34.6% in the third quarter of fiscal 2008. The improvement in gross profit, as a percentage of sales, was a result of lower freight expense, lower inventory shrinkage and higher purchase mark-ups which more than offset stronger sales of lower-margin consumable merchandise.
Selling, general and administrative ("SG&A") expenses increased 8.3% to $528.2 million in the third quarter of fiscal 2009 compared to $487.8 million in the third quarter of fiscal 2008. As a percentage of sales, SG&A expenses were flat in the third quarter of fiscal 2009 compared with the third quarter of fiscal 2008. Most expenses, including occupancy and payroll costs, were leveraged during the quarter as a result of a strong comparable store sales increase and continued expense management. These improvements were offset by higher incentive compensation and higher insurance expense.
The Company's inventories at May 30, 2009, were $1.035 billion, or 3.0% more than inventories of $1.005 billion at May 31, 2008. Inventory per store increased 1.3%. Reflecting increased customer demand, inventory of consumable merchandise was higher, offsetting lower inventory in more discretionary categories.
During the third quarter of fiscal 2009, the Company repurchased approximately 1.2 million shares of its common stock for a total cost of $38.5 million. As of May 30, 2009, the Company had authorization to purchase up to an additional $94.6 million of its common stock.
Outlook
"While we continue to believe that the underlying sales trends remain strong, we expect that the sales increase for the quarter will be affected by the cycling of last year's stimulus checks," said Mr. Levine. "The quarter is off to a good start, with sales in comparable stores increasing an estimated 2% in June."
"At Family Dollar, we have consistently reinvested in our business to drive stronger shareholder returns. Reflecting this strategy, we are investing aggressively in a chain-wide store technology refresh which supports the acceptance of credit cards and food stamps. In addition, this quarter we are initiating efforts to re-align space in our stores to accommodate strong customer demand and improve the in-store shopping experience. These investments will add incremental expense pressure in the fourth quarter but will position us to drive sustainable growth beyond the current quarter," concluded Mr. Levine.
For the fourth quarter of fiscal 2009 ending August 29, 2009, the Company expects that net sales will increase between 4% and 6% and expects comparable store sales will increase 2% to 4%. Reflecting the anticipated impact from lower freight expense, lower inventory shrinkage and investments the Company is making to enhance the shopping experience, the Company expects that earnings per diluted share will be between $0.39 and $0.43 in the fourth quarter of fiscal 2009 as compared with $0.38 in the fourth quarter of fiscal 2008.
For the fiscal year ending August 29, 2009, the Company expects that earnings per diluted share will be between $2.03 and $2.07 in fiscal 2009 as compared with $1.66 in fiscal 2008.
Cautionary Statements
Certain statements contained in this press release are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements address certain plans, activities or events which the Company expects will or may occur in the future and relate to, among other things, the state of the economy, the Company's investment plans, net sales, comparable store sales, cost of sales, SG&A expenses, and earnings per diluted share. Various risks, uncertainties and other factors could cause actual results to differ materially from those expressed in any forward-looking statement. Consequently, all of the forward-looking statements made by the Company in this and in other documents or statements are qualified by factors, risks and uncertainties, including, but not limited to those set forth under the headings titled "Cautionary Statement Regarding Forward-Looking Statements" and "Risk Factors" in the Company's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission up to the date of this release.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company does not undertake to publicly update or revise these forward-looking statements even if experience or future changes make it clear that projected results expressed or implied in such statements will not be realized, except as may be required by law.
Third Quarter Earnings Conference Call Information
The Company plans to host a conference call with investors today, July 8, 2009, at 10:00 A.M. EDT to discuss the results. If you wish to participate, please call (800) 857-5160 for domestic US calls and (312) 470-7174 for international calls at least 10 minutes before the call is scheduled to begin. The passcode for the conference call is FAMILY DOLLAR.
There will also be a live webcast of the conference call that can be accessed at the following link:
http://www.familydollar.com/investors.aspx?p=irhome.
A replay of the webcast will be available at the same address noted above after 2:00 P.M. EDT, July 8, 2009.
About Family Dollar
Operating small store locations, Family Dollar is one of the fastest-growing discount retail chains in the United States. Family Dollar offers a core assortment of name-brand and quality consumable merchandise supplemented by fashion and seasonal merchandise at everyday low prices.
Beginning with one store in 1959 in Charlotte, North Carolina, the Company currently operates more than 6,600 stores in 44 states. Family Dollar Stores, Inc., a Fortune 500 company, is based in Matthews, North Carolina, just outside of Charlotte and is a publicly held company with common stock traded on the New York Stock Exchange under the symbol FDO. For more information, please visit www.familydollar.com.
FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) For the Third Quarter Ended (in thousands, except per share amounts) May 30, 2009 % of Net Sales May 31, 2008 % of Net Sales Net sales $ 1,843,089 100.0 % $ 1,702,197 100.0 % Cost of sales 1,175,897 63.8 % 1,112,755 65.4 % Gross profit 667,192 36.2 % 589,442 34.6 % Selling, general and administrative expenses 528,158 28.7 % 487,835 28.7 % Operating profit 139,034 7.5 % 101,607 5.9 % Interest income 879 0.0 % 2,973 0.2 % Interest expense 3,216 0.2 % 3,361 0.2 % Income before income taxes 136,697 7.3 % 101,219 5.9 % Income taxes 48,976 2.7 % 36,546 2.1 % Net income $ 87,721 4.6 % $ 64,673 3.8 % Net income per common share - basic $ 0.63 $ 0.46 Weighted average shares - basic 140,319 139,696 Net income per common share - diluted $ 0.62 $ 0.46 Weighted average shares - diluted 141,195 139,920 Dividends declared per common share $ 0.135 $ 0.125 -------------------------------------------------------------------------------
FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) For the Three Quarters Ended (in thousands, except per share amounts) May 30, 2009 % of Net Sales May 31, 2008 % of Net Sales Net sales $ 5,589,182 100.0 % $ 5,217,851 100.0 % Cost of sales 3,636,233 65.1 % 3,453,301 66.2 % Gross profit 1,952,949 34.9 % 1,764,550 33.8 % Selling, general and administrative expenses 1,587,425 28.4 % 1,481,340 28.4 % Operating profit 365,524 6.5 % 283,210 5.4 % Interest income 6,042 0.1 % 8,402 0.2 % Interest expense 9,778 0.2 % 11,327 0.2 % Income before income taxes 361,788 6.4 % 280,285 5.4 % Income taxes 130,638 2.3 % 100,363 1.9 % Net income $ 231,150 4.1 % $ 179,922 3.5 % Net income per common share - basic $ 1.65 $ 1.28 Weighted average shares - basic 140,044 140,357 Net income per common share - diluted $ 1.64 $ 1.28 Weighted average shares - diluted 140,629 140,620 Dividends declared per common share $ 0.395 $ 0.365 -------------------------------------------------------------------------------
Exception caught in main.
Exception caught in main.
FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES Selected Additional Information NET SALES BY CATEGORY: For the Third Quarter Ended (in thousands) May 30, 2009 May 31, 2008 % Change Consumables $ 1,201,033 $ 1,066,649 12.6 % Home products 237,384 229,528 3.4 % Apparel and accessories 219,193 230,784 -5.0 % Seasonal and electronics 185,479 175,236 5.8 % TOTAL $ 1,843,089 $ 1,702,197 8.3 % For the Three Quarters Ended (in thousands) May 30, 2009 May 31, 2008 % Change Consumables $ 3,565,542 $ 3,139,544 13.6 % Home products 771,577 774,518 -0.4 % Apparel and accessories 620,175 686,341 -9.6 % Seasonal and electronics 631,888 617,448 2.3 % TOTAL $ 5,589,182 $ 5,217,851 7.1 % STORES IN OPERATION: For the Three Quarters Ended May 30, 2009 May 31, 2008 Beginning Store Count 6,571 6,430 New Store Openings 148 165 Store Closings (65 ) (50 ) Ending Store Count 6,654 6,545 Total Square Footage (000s) 56,527 55,575 Total Selling Square Footage (000s) 47,060 46,194 -------------------------------------------------------------------------------
A service of YellowBrix, Inc.
