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Family Dollar Stores Shares Rise Sharply after Earnings Beat (FDO)

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Shares of Family Dollar Stores Inc. (NYSE: FDO), operator of a chain of over 7,400 general merchandise retail discount stores in 45 states, have risen sharply in trading today after the company reported better than expected third-quarter earnings even its gross margin narrowed.

For the third quarter ended June 1, 2013, Family Dollar Stores reported a 9% increase in its net sales to $2.57 billion. The company’s net income for the quarter stood at $120.9 million, or $1.05 per share, compared to $124.5 million, or $01.06 per share reported for the same period in the previous year. However, the company’s earnings for the beat consensus forecast.

The company’s gross margin for the quarter stood at 34.7%, down from 35.8% reported for the same period in the previous year.

FDO’s comparable store sales, a key figure for retailers, rose 2.9% in the third quarter. The increase in comparable store sales was mainly driven by an increase in the average customer transaction value and higher customer traffic. The company registered strongest sales in Consumables category.

Howard R. Levine, Chairman and CEO of Family Dollar Stores, said that the company’s consumables sales remained strong as it continued to gain market share. Levine, however, said that the company’s discretionary sales remained challenged as customers have been forced to make spending choices between basic needs and wants.

FDO shares rose to an intra-day high of $67.48 earlier today as investors digested the company’s quarterly results. At last check, the stock was trading 5.47% higher at $67.45 on above average volume of 4.77 million.








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edliston
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.

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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.

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