|Family Dollar Reports Record Second Quarter Earnings|
MATTHEWS, N.C., Apr 07, 2010 (BUSINESS WIRE) --Family Dollar Stores, Inc. (NYSE: FDO) today reported that net income per diluted share for the second quarter of fiscal 2010 ended February 27, 2010, increased 35.0% to $0.81 compared with $0.60 for the second quarter of fiscal 2009 ended February 28, 2009. Net income for the quarter increased 33.4% to $112.2 million compared with net income of $84.1 million for the second quarter of fiscal 2009.
"These strong results reflect our efforts to provide our customers with more value, more convenience and a better shopping experience," said Howard R. Levine, Chairman and Chief Executive Officer. "We have invested significantly to improve processes, build merchandising capabilities and stabilize our workforce, and these investments are clearly delivering results. As we increase our focus on accelerating revenue growth, I am confident that our continued efforts to broaden the appeal of our assortment, strengthen our customer communications and improve the in-store shopping experience will result in expanded market share and strong financial returns."
As previously reported, sales for the second quarter of fiscal 2010 were approximately $2.09billion, or 4.9% above sales of approximately $1.99 billion for the second quarter of fiscal 2009. Comparable store sales increased 3.6%. 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 were strong in the Seasonal and Electronics, Home Products and Consumables categories. Sales of Apparel and Accessories were approximately flat.
The gross profit margin, as a percentage of sales, was 35.4% in the second quarter of fiscal 2010 compared to 33.7% in the second quarter of fiscal 2009. The improvement in gross profit, as a percentage of sales, was a result of higher purchase mark-ups and reductions in markdown expenses, freight expenses and inventory shrinkage.
Selling, general and administrative (SG&A) expenses, as a percentage of sales, were 26.8% in the second quarter of fiscal 2010 compared with 27.0% in the second quarter of fiscal 2009. The decrease in SG&A expenses, as a percentage of sales, was primarily a result of lower utility costs and lower insurance expense which more than offset higher expenses related to expanded store operating hours and certain store maintenance and repair costs.
The Company's inventories at February 27, 2010, were $935.3 million, or 9.6% less than inventories of $1,035.2 million at February 28, 2009.
In the first half of fiscal 2010, capital expenditures were $82.9 million compared with $61.8 million in the first half of fiscal 2009. During the first half of fiscal 2010, the Company opened 86 new stores and closed 52 stores.
During the first half of fiscal 2010, the Company repurchased approximately 4.1 million shares of its common stock. As of February 27, 2010, the Company had authorization to purchase up to an additional $296.0 million of its common stock.
"I am pleased to report that the sales momentum we saw in the second quarter has continued through March," said Levine. "Reflecting favorable weather trends and the impact of the Easter shift, comparable store sales for the March reporting period increased approximately 11%."
For the third quarter, the Company expects that comparable sales for the quarter will increase 6% to 8% and that earnings per share will be between $0.71 and $0.76 compared with $0.62 in the third quarter of fiscal 2009.
For the full year, the Company expects that earnings per share will be between $2.48 and $2.58 compared with $2.07 in fiscal 2009.
Certain statements contained in this press release are "forward-looking statements" that are subject 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 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.
Second Quarter Earnings Conference Call Information
The Company plans to host a conference call with investors today, April 7, 2010, at 10:00 A.M. ET 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:
A replay of the webcast will be available at the same address noted above after 2:00 P.M. ET, April 7, 2010.
About Family Dollar
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.
SOURCE: Family Dollar Stores, Inc.
Family Dollar Stores, Inc.