Family Dollar Soars on Q3 Earnings

MATTHEWS, N.C. — Stock in Family Dollar Stores was up more than 12% Wednesday after the retailer said its annual earnings would exceed initial forecasts after a strong third quarter.

Net earnings for the fiscal third quarter ended May 30 increased 35.5% to $87.7 million on strong sales, particularly of food and consumables, as well as gross profit increases stemming from lower freight expenses, reduced shrinkage and higher purchase mark-ups. The chain previously reported a quarterly sales increase of 8.2% to $1.8 billion, and comparable sales of 6.2%.

In a conference call discussing results, Howard Levine, chairman and chief executive officer, said the chain would look to increase shelf space devoted to food and consumables at 40% of its stores during the current quarter, or more than 2,600 locations. He said annual per-share earnings would come in at around $2.03 to $2.07, up from previous estimates of $1.93-$2.

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