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Family Dollar posts sales and profit improvement

BY Mike Troy

MATTHEWS, N.C. — Profit grew by nearly 10% to $123.2 million and sales advanced 8.3% to nearly $2.3 billion as Family Dollar remained on a consistent growth trajectory during its second quarter, ended Feb. 27.

Earnings per share for the period increased 21% to 98 cents, compared with 81 cents in the prior-year’s second quarter.

“Over the last several years, we have accelerated capability-building investments and increased our efforts to improve the in-store shopping experience. These investments have provided a solid foundation for the successful launch of our strategic plan to re-accelerate revenue growth, expand operating margins and optimize our capital structure,” said Howard Levine, chairman and CEO of Family Dollar. “Our performance year-to-date illustrates that we are effectively leveraging these enhanced capabilities and executing well against our business plan, and delivering superior value for shareholders.”

The second quarter saw the company again produce solid same-store sales growth of 5.1%, which it said was almost entirely the result of more customers shopping its stores as determined by the number of transactions. A modest increase in the value of the average customer transaction also contributed to the comps gain. Sales during the quarter were strongest in the consumable and seasonal categories, according to the company.

The rate of profitability improved slightly, as Family Dollar’s gross margins for the second quarter were 35.7%, compared with 35.4% the prior year due largely to less shrinkage, which more than offset higher transportation costs. The shrinkage reduction occurred even though average inventories per store increased by 10% as Family Dollar stocked up on consumables. The company’s expense rate essentially was flat with the prior year at 26.82%, compared with 26.77%.

Looking forward to the back half of its fiscal year, Family Dollar is expecting continued growth and improved profits. Third-quarter and full-year comps are projected to be in the range of 5% to 7%, and additional store growth is planned. At the mid point of its fiscal year, Family Dollar has opened 146 new stores, renovated 313 stores and closed 43 others as part of a full-year plan that envisions the addition of 300 new stores and 80 to 100 closings.

The company ended the second quarter with approximately 6,800 units.

With the additional square footage, expectations of same-store sales growth are forecast to result in third-quarter earnings per share of 92 cents to 97 cents, compared with 77 cents last year, and full-year profitability in a range of $3.13 to $3.23 per share, compared with $2.62 last year.

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Study: Sleep, relaxation can aid weight loss

BY Allison Cerra

NEW YORK — The "battle of the bulge" can be won by adding sleep and relaxation to diet and exercise, according to a new study.

Published in the International Journal of Obesity, a study conducted by Kaiser Permanente researchers found that among 472 obese participants with body mass indexes of 30 to 50, weight loss significantly correlated with decreased stress levels.

Sleep time and lower stress at the start of the six-month weight-loss program — which included 22 group counseling sessions over 26 weeks; reduction of dietary intake by 500 calories a day by following a low-fat, low-sugar diet; and an increase in exercise to at least 180 minutes a week — predicted success. What’s more, 60% of participants lost at least 10 lbs. in the first phase of the study and were moved to the second phase, which reviewed weight-loss maintenance. 

Results suggested that clinicians and investigators might consider targeting sleep, depression and stress as part of a behavioral weight-loss intervention, the study authors concluded.

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Heart failure patients skip meds due to cost, study finds

BY Alaric DeArment

ROCHESTER, Minn. — Many patients with heart failure skip pills due to medication costs, according to research by the Mayo Clinic.

The study, published in the journal Mayo Clinic Proceedings, tracked the pharmacy records of 209 patients ages 60 to 86 years in Olmsted County, Minn., who were asked how often they missed doses or didn’t take their drugs at all and why.

Among patients who didn’t follow their medication regimens well, 46% reported they had stopped taking statins or did not fill a prescription because of cost, while 23% said they skipped doses to save money. Younger patients were slightly more likely to skip doses than older patients, and men were more likely than women to not stick to certain drug regimens.

“We found patients weren’t filling their prescriptions because of the expense,” lead study author and Mayo Clinic cardiologist Shannon Dunlay said. Dunlay said patients who have heart failure and are worried about costs should tell their physicians, as lower-cost alternatives may be available.

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