Family Dollar net hit by consumables focus, stock down
January 4, 2013 12:42 AM EST
Family Dollar Stores Inc
Its shares fell 8.6 percent premarket as the company also lowered its forecast for the year and said that December sales, which came in after the quarter ended, were hurt as shoppers cut back on discretionary spending.
The discount chain added cigarettes and other tobacco products, Pepsi drinks, gift cards, magazines and some other goods to its assortment in recent months to better compete against chains such as Dollar General Corp
While that change has helped bring in more traffic, those items tend to carry lower profit margins. Gross profit margin fell to 34.1 percent in the quarter from 35.3 percent a year earlier, the company said.
Its profit was $80.3 million, or 69 cents a share, in the fiscal first-quarter that ended November 24, compared with a profit of $80.4 percent, or 68 cents, a year earlier.
Analysts on average forecast 75 cents a share, according to Thomson Reuters I/B/E/S.
Sales rose 12.7 percent to $2.42 billion. Analysts on average forecast $2.38 billion.
Sales at stores open at least a year rose 6.6 percent. The company had forecast an increase of 4 percent to 6 percent.
But in December, same-store sales rose only 2.5 percent
Sales of "consumables" such as food and beauty products - by far the chain's largest category - rose 18.5 percent in the first quarter, the company said.
For the year, Family Dollar said it expects earnings of $3.95 to $4.20, below its prior forecast of $4.10 to $4.40. Analysts on average forecast $4.24 a share.
(Reporting by Jessica Wohl and Brad Dorfman in Chicago; Editing by Maureen Bavdek)
Most Popular Slideshows
- Angelina Jolie & Brad Pitt Heads to Malta For New Movie After A Whirlwind French Wedding [PHOTOS]
- Prince William & Kate Middleton Caught Flirting In A Countryside Dinner Date [PHOTOS]
- Chris Martin Getting Serious With Jennifer Lawrence, Actress Joining Coldplay Tour [PHOTOS]
- 2014 US Open Update (Day 4 - Men's Singles): Murray, Djokovic, Raonic and Isner Advance to 3rd Round [PHOTOS]
Join the Conversation
- Apple iPhone 6 Actual Release Date after September 9 Confirmed 128GB Variant with New Resolution
- Pricey iPhone 6 on Release Date Likely but with 3X Retina Resolution & Mobile Payment Service – Reports
- Google Nexus 8 Confirmed as HTC T1 aka Volantis/Flounder with Freshly-Leaked Specs & Features – Reports
- Moto G2 Release Roundup: Specs, Pricing, and Release Date Details
- PlayStation 4 Killing Xbox One Costing Microsoft Millions But It's Fine
- Nexus 6 on Release Date Confirmed with Phablet-Size Display as FCC Filing Hints of 5.9-Inch Screen
- Europe, US Next on ISIS’ Hit List, Says Saudi King; Seized ISIS Laptop Reveals Terrifying Bio-Warfare Plans