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Family Dollar numbers up 12 percent

With sales climbing at a strong double-digit pace, lifted by continued rapid expansion, second-fiscal quarter profits at Family Dollar Stores Inc. climbed by 12 percent, to $81.4 million from $72.7 million last year.

Sales at the value-pricing, neighborhood small-store retailer climbed 11.7 percent, to $1.4 billion from $1.3 billion last year. Same-store sales improved by 2.2 percent, with a 3.2 percent increase in hardlines partly offset by a 1.2 percent drop in softlines.

Average gross margin improved by 60 basis points, or six-tenths of a percentage point, to 33.8 percent from 33.2 percent the year before. Margins were helped by improved initial margins through better sourcing of goods and lower levels of markdowns. The reduction in markdowns came as a result of purchasing seasonal goods on a conservative basis and better allocation of those goods to the stores, said Howard Levine, chairman and CEO.

Costs kept pace, rising by 50 basis points, or one half of a percentage point, to 24.6 percent of sales from 24.1 percent, hurt by continued increases in workers' compensation costs and lower than expected sales.

Levine said earnings rose during the second fiscal quarter even though same-store sales in December rose only 0.7 percent. "When customers began to focus again on basic consumable merchandise in January and February, as opposed to the focus on seasonal goods in December, sales in existing stores increased 3 percent in the January reporting period and 4.3 percent in the February reporting period."

Family Dollar Stores Inc.

Qtr. 2/28 (x000) 2003 2002 % chg
Sales $1,402,798 $1,256,183 11.7
Oper. income (EBIT) 128,254 114,511 12.0
Net income 81,441 72,715 12.0
Per share (diluted) 0.47 0.42 11.9
Average gross margin 33.8% 33.2%
SG&A expenses 24.6% 24.1%
Six months 2003 2002 % chg
Sales 2,647,481 2,364,820 12.0
Oper. income (EBIT) 229,753 205,028 12.1
Net income 145,893 130,193 12.1
Per share (diluted) 0.84 0.75 12.0
Average gross margin 34.2% 33.8%
SG&A expenses 25.5% 25.1%


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