Family Dollar to Ramp up New Store Openings, Launch Store Renovation in 2011

MATTHEWS, N.C. - Closing the doors on fiscal 2010 and at the same time its 10th consecutive quarter of double-digit earnings growth, Family Dollar plans to ride that momentum in the new fiscal year by accelerating its new store growth and launching a renovation effort to revamp existing sites.
     During the earnings webcast of the 6,800-plus unit discount chain, chairman and ceo Howard Levine noted the investments Family Dollar made over fiscal 2010 to enhance in-store operations with expanded operating hours, improved product assortments, and improved merchandise presentations.
    The company will accelerate new store openings with about 300 new units - a 50% increase over 2010 - and renovate 600 to 800 existing sites.
     "We plan to have the first 200 completed well before the holiday season begins," Levine said, adding that several units started undergoing renovations in August, "and, although it is still early, the feedback from our associates and customers is very encouraging."
      As part of the store-revamp initiative, Family Dollar is expanding its growing consumables business and its seasonal category, which has been steadily improving in performance.
     Levine added that the retailer is also turning its focus to its global sourcing and private brand initiatives, lowering overall sourcing costs.
     Sales for the fourth quarter ended Aug. 28 rose 8.0% to $1.957 billion, and same-store sales increased 6.1% - the result of an increase in customer traffic, as measured by the number of register transactions.
    Sales in the quarter were strongest in the consumables category. But sales also improve in certain discretionary categories, such as apparel.
     Quarterly earnings per share rose 30.2% to 56 cents compared with 43 cents last year. Net income increased 23.0% to $74.0 million.
     For the fiscal year, sales for fiscal 2010 climbed 6.3% to $7.867 billion, with comps up 4.8%. Earnings per share increased 26.6% to $2.62. Net income for the year jumped 23.0% to $358.1 million.
     The company's outlook for fiscal 2011 includes: an increase in net sales between 8% and 10%; an increase in comparable store sales between 5% and 7%; and approximately 300 new store openings and 80 to 100 store closings.
     First-quarter comps are expected to rise between 5% and 7% and earnings per share projected to be between 55 cents to 60 cents per share, compared with 49 cents per share the first quarter of 2010.

Home & Textiles Today Staff | News & Commentary

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