Family Dollar finds 1Q profits up
December 23, 2002-- Home Textiles Today,
Building sales, widening margins and appealing to cost-conscious consumers, Family Dollar Stores Inc. pushed first quarter profits up by 14.5 percent, to $57.5 million from $50.2 million last year.
Sales at the neighborhood retailer rose by 13.5 percent, to $1.1 billion from $977.1 million a year ago. Same-store sales rose by 3.0 percent.
Fueling the bottom line improvement, in addition to the stronger sales, Family Dollar expanded its margins modestly, by 20 basis points, to 34.4 percent from 34.2 percent. But acting as a partial offset, costs climbed slightly higher as well, rising by 10 basis points, to 26.2 percent from 26.1 percent.
Operating margin — operating profits measured as a percentage of sales — rose to 8.2 percent from 8.1 percent the preceding year.
Breaking out some of its sales results, the chain said hardlines sales increased by 3.1 percent, outpacing a 2.8 percent gain in softlines. Hardlines represented about 77 percent of sales.
Reflecting the nature of the low-cost retailer, the average transaction increased about 2.6 percent, to $8.70, and the customer count, measured by the number of register transactions, held relatively steady, increasing by 0.2 percent.
Sales gains, the retailer said, "were achieved even though the comparison in the last two weeks of November was difficult due to Thanksgiving falling later this year, leaving fewer shopping days after Thanksgiving in November this year. The elimination of an advertising circular that was distributed last year at the end of November and the beginning of December also adversely affected sales at the end of November this year."
Family Dollar Stores Inc.
|Qtr. 11/30 (x000)||2002||2001||% change|
|Oper. income (EBIT)||90,517||79,066||14.5|
|Per share (diluted)||0.33||0.29||13.8|
|Average gross margin||34.4%||34.2%||—|
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