Family Dollar Stores Inc. (NYSE: FDO) is scheduled to release its fiscal first-quarter earnings before the opening bell on Wednesday, January 5, 2011. Analysts, on average, expect the company to report earnings of 61 cents per share on revenue of $1.98 billion. In the year ago quarter, the company reported earnings of 49 per share on revenue of $1.82 billion.
Family Dollar Stores, Inc. operates a chain of self-service retail discount stores primarily for low and middle income consumers in the United States. The company currently operates more than 6,800 stores in 44 states.
In the preceding fiscal fourth quarter, the Charlotte, North Carolina based company's net income was $74 million, or 56 cents a share, from $60.1 million, or 43 cents a share, in the year-ago quarter. Revenue increased 8% to $1.957 billion from $1.811 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of 51 cents per share on revenue of $1.96 billion.
Early In October, the company said that it expects fiscal 2011 earnings between $3.04 to $3.24 per share and net sales growth between 8% and 10% from last year. The company anticipates an increase in comparable store sales of between 5% and 7% and an increase in the operating margin based on flat gross margin and lower SG&A expenses.
In fiscal 2011, the company plans to open approximately 300 new stores, a 50% increase over 2010 openings. The company also expects to build a pipeline to return to square footage growth of 5% to 7% over the next two to three years. Reaccelerating new store openings is an important component of its plan to drive greater revenues. The company expects to renovate 600 to 800 stores in fiscal 2011 at a projected cost of $100,000 to $130,000 per store
For the first quarter of fiscal 2011, the company expects that comparable store sales will increase between 5% and 7% and that earnings per diluted share will be between $0.56 and $0.61 per share, compared with $0.49 in the first quarter of fiscal 2010.
The discount retailer has benefited from increased traffic and a higher average ticket as consumers continue to be price conscious in the wake of the economic recovery. Moreover, effective price management, cost containment, tighter inventory control, private label offering and expanded operating hours have helped drive sales and margin trends. Also, the company's strategic initiatives to improve merchandising and store operations have helped grow the top and bottom lines. Family Dollar's point-of-sale technology and store realignment initiatives are helping to drive traffic. In order to enhance its market share, Family Dollar intends to focus on both consumable and discretionary categories. In fiscal 2011, the company expects to continue to enhance and develop new private brand programs with increased focus on consumable categories.
During the quarter in review, the company entered into an accelerated share repurchase agreement with Wells Fargo Bank, N.A. under which the Company will repurchase shares of its common stock. The company also declared a regular quarterly cash dividend on the company's common stock of $0.155 per share.
In terms of stock performance, Family Dollar shares have gained nearly 75% since the beginning of the year.
Full Disclosure: None.
