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Family Dollar Stores
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ShareCompany Description
Family Dollar is a discount retail chain operator in the United States. The company offers a core assortment of name-brand and quality consumable merchandise supplemented by fashion and seasonal merchandise. A Fortune 500 company that is based in Matthews, North Carolina, FDO operates more than 6,500 stores in 44 states.
Shares Spiked on Record Results
Family Dollar recently reported record results for the fiscal third quarter. Earnings per share 62 cents came in 5% ahead of the consensus estimate and surged past the previous year’s 46 cents. Net sales were up 8% year-over-year.
“In today’s environment, Family Dollar’s commitment to value has great appeal. Customers are shopping us more frequently and relying on us to meet more of their basic needs. As a result, we continue to gain market share,” said Howard R. Levine, Chairman and Chief Executive Officer.
The company’s shares soared in response to the strong quarter and have maintained the higher level fairly well.
During the past year, FDO has outperformed the market by more than 40%.
Bullish Forecasts
The company issued a guidance for the fiscal year ending August 2009, forecasting earnings of $2.03 to $2.07 per share.
A total of 16 out of 17 covering brokerage analysts lifted their fiscal year estimates over the past month to $2.06 per share from $2.00. For the year ending August 2010, 14 out of 17 analysts boosted earnings forecasts to $2.28 per share from $2.18 over the past month.
Favorable Industry Comparisons
Family Dollar’s earnings are expected to grow 12.5% over the next 3 – 5 years, which is in line with the industry average. The company’s return on equity (ROE) of 22% tops the industry average of 16%. This Growth and Income pick also offers an industry-leading dividend yield of 2%.
Read the full analyst report on FDO
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