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Family Dollar Posts Solid 1Q

MATTHEWS, N.C. - Consumables drove the business during Family Dollar Stores Inc.'s first quarter, which ended as the holiday selling season was ready to begin.
     Sales of home products made up a smaller slice of the merchandise mix during the quarter ended Nov. 26, accounting for 11.5% of total sales versus 12.7% in the year-ago quarter. Consumables generated 70.3% of total sales in the quarter.
     Howard Levine, chairman and ceo, said Family Dollar will expand its consumables assortment at the expense of more discretionary categories going forward and will add up to 300 new food items in the second quarter.
First quarter net income rose 8.1% to $80.4 million, or 68 cents per share. Sales increased 7.6% to $2.1 billion, with comps up 4.1%.
     And comparable store sales were up 4.1% - a gain the retailer attributed to a higher average customer transaction value and increased customer traffic, as measured by the number of register transactions.
     The numbers got a boost from Family Dollar's opening of 101 new stores, nearly 20% more than in the first quarter last year, including its market entry into California.
     Levine noted that "the environment continues to be challenging for our customers."
     Looking ahead, the company said it anticipates "that many of the trends that occurred in the first quarter will continue in the second quarter."

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