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Family Dollar 3Q profits climb 6%

Third-quarter profits at Family Dollar Stores advanced by 6.9 percent, to $53.5 million from $50.1 million last year, despite sharply higher costs for new store openings, coupled with rising utility and health care expenses.

Sales at the rapidly growing chain advanced by 15.1 percent, to $887.0 million from $770.8 million last year, largely on the strength of new store openings. Same-store sales moved up by 3.6 percent, including an 8.5 percent increase in hardlines sales and a decrease of 10.2 percent in softlines sales.

Average gross margin narrowed slightly, to 35.2 percent from 35.3 percent, while costs climbed higher by 60 basis points, to 25.7 percent from 25.1 percent a year ago. More than half the rise in costs, said Howard Levine, ceo, was due to sharply climbing energy costs. He said the increase in earnings came "despite the fact that utility and health care costs continued to grow at a faster rate than sales" in addition to opening 31 more stores than in the year-ago period.

Family Dollar plans to open about 120 more stores next quarter. Going forward, the chain will open about 525 new stores next year, closing 50.

Family Dollar Stores

Qtr. 6/2/01 (x000) 2001 2000 %CHG
Sales $887,037 $770,776 15.1
Oper. income (EBIT) 84,235 78,996 6.6
Net income 53,489 50,131 6.7
Per share (diluted) 0.31 0.29 6.9
Average gross margin 35.2% 35.3%
SG&A expenses 25.7% 25.1%
Nine months 2001 2000 %CHG
Sales 2,744,552 2,342,797 17.1
Oper. income (EBIT) 244,684 223,160 9.6
Net income 155,405 141,695 9.7
Per share (diluted) 0.90 0.82 9.8
Average gross margin 34.1% 34.3%
SG&A expenses 25.2% 24.8%


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