Family Dollar to accelerate store growth

MATTHEWS, N.C. — Following the release of record sales and profits on Wednesday morning, Family Dollar said it would open 500 new stores next year.

Sales for the company's fourth quarter ended Aug. 25, increased 10.8% to about $2.4 billion and same-store sales increased 5.4%. Profits per share increased 4.5% to 69 cents and included a six cent per share charge related to a preliminary settlement of a legal matter involving the state of New York. Excluding the litigation charge, earnings per share would have increased 13.6% to 75 cents. For the year, sales increased 9.2% to $9.33 billion and net income per share increased 14.7% to $3.58, or 16.7% to $3.64 if the litigation charge is excluded.

"Fiscal 2012 was a year of great progress for Family Dollar," company chairman and CEO Howard Levine said. "We expanded our merchandise assortment to increase our relevancy to our customers, we continued to improve the shoppability of our stores and we repositioned our leadership team to better support our growth."

Among the accomplishments the company highlighted were the opening of 475 new stores, including 41 stores in California, and the renovation, relocation and expansion of 854 stores. The company expanded assortments in key consumable categories of food and health and beauty aids and introduced new categories, such as tobacco, magazines and gift cards. To support its growth, Family Dollar opened its 10th distribution center and began construction of an 11th facility.

"These accomplishments position us well for continued growth in fiscal 2013 and beyond," Levine said. "This year, as we work to drive further benefit from the investments we made in fiscal 2012, we will focus on enhancing the shopping experience in our stores, increasing inventory productivity, improving store-level processes, and driving greater profitability."

Looking ahead, Family Dollar indicated it plans to accelerate the breakneck pace of growth it has experienced in recent years. In addition to opening 500 new stores, Family Dollar expects 2013 will see the company generate same store sale in the range of 4% to 6% and full year earnings per share will range from $4.10 to $4.40.

"Our financial goals over the next three to five years are to consistently deliver five to seven percent net new store growth, mid-single-digit comp sales growth, operating margin expansion and double-digit earnings per share growth," Levine said. "Our plans for fiscal 2013 align nicely with these long-term goals."