MATTHEWS, N.C. — Responding to consumer demand for affordable basic needs, Family Dollar Stores here said that it would expand the space allotted for food and consumable products at its stores beginning in May.
“Right now our customers are focused on needs, and so that’s why we’re focused on driving consumables,” Kenneth Smith, chief financial officer, said Wednesday in a conference call discussing second-quarter results. “That’s where the action is today.” The discounter said a 13% increase in sales of consumables — including food, household products, HBC and pet food — drove revenues up by 8.7% to $1.99 billion. As a percent of total sales, consumables increased to 61%.
Improvements in shrink, lower freight costs and fewer product markdowns in the meantime drove gross margins up by 1% to 33.7% of sales, officials added. Net earnings improved 32.9% to $84.1 million, or 60 cents per share.
Shares of Family Dollar were up by more than 6% Wednesday.
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