Family Dollar Falls after Missing Forecasts

Family Dollar Stores, Inc. (NYSE: FDO) shares fell over 7% in morning trade after the company’s sales and profits came in below estimates. The company reported that net sales for the first quarter of fiscal 2012 ended November 26, 2011, increased 7.6% to $2.148 billion compared to $1.997 billion in the first quarter of fiscal 2011.

Net income for the quarter increased 8.1% to $80.4 million compared with net income of $74.3 million for the first quarter of fiscal 2011. Net income per diluted share for the quarter increased 17.2% to $0.68 compared with $0.58 for the first quarter of fiscal 2011. Revenue came in below analyst estimates of $2.17 billion.

“Today, we reported another quarter of record earnings. We opened 101 stores, nearly 20% more than in the first quarter last year, and we entered an important new market, California. We delivered a 4.1% comparable store sales increase on top of a 6.9% increase last year, and we expanded first quarter operating margin to the highest rate since 2004,” said Howard Levine, Chairman and CEO.

“The environment continues to be challenging for our customers, and our experienced team remains focused on executing our long-term strategy. We have tremendous opportunity to expand our market share further and improve our store productivity, and I am confident that our investments to better meet the needs of our customers will continue to position us to deliver strong financial returns for our shareholders.”

Despite the mediocre performance, December comparable store sales were up about 4% due to higher traffic and customer transaction value, and management reaffirmed its earnings guidance for fiscal 2012, expecting earnings between $3.50 and $3.75 a share, in line with analyst estimates of $3.65 per share.

“Comparable stores sales for December increased approximately 4% driven primarily by increased customer traffic,” said CEO Mr. Levine. “Consumables delivered another month of double-digit sales growth, and we expect that this momentum will continue through January and February, when customers are even more focused on basic needs.”

More Posts by this author

• 
  Exxon Mobil Reaches Deal on Disputed Gulf Leases (XOM)
• 
  Gold Prices Ease in Friday’s Trading Session
• 
  Stocks End on a Mixed Note as Stronger than Expected Jobs Report Fails to Lift Sentiments
• 
  Vail Resorts Skier Visits Fall (MTN)
• 
  Coca-Cola, Nestle Narrow Partnership (KO)
• 
  Stocks Headed for a Mixed Finish
• 
  Gold and Silver Prices in Red in Mid-Day Trading

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.