Family Dollar Stores, Inc. Misses Q1 Estimates (FDO)

Family Dollar Stores, Inc. Misses Q1 Estimates (FDO)

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Before the opening bell on Thursday morning, Family Dollar (FDO) reported its first quarter results, posting higher sales and lower earnings than last year’s Q1.

FDO’s Earnings in Brief

  • Family Dollar reported first quarter net sales of $2.56 billion, which is up slightly over last year’s Q1 revenues of $2.5 billion.
  • Net income for the quarter came in at $41.4 million, or 36 cents per share, down from last year’s $78 million, or 68 cents per share.
  • Not including costs associated with FDO’s merger with Dollar Tree, EPS for the quarter came in at 44 cents.
  • The company’s earnings badly missed analysts’ expectations of 62 cents, while revenues were just below the $2.57 billion expectation.
  • FDO reported that comparable store sales for the quarter decreased 0.4%, and December comps were up 1.2%.

CEO Commentary

FDO chairman and CEO Howard R. Levine had the following comments: “As expected, the first quarter of fiscal 2015 was very challenging, as we continued our transition from a very promotional merchandising strategy to a more everyday low price strategy. During the quarter, gross margin continued to be pressured by the impact of our pricing investments, as well as strong growth of lower-margin consumable categories, including food and tobacco. Our team did a good job of controlling expenses; however, ongoing topline challenges and continued margin pressures impacted our net profitability, As we look to the rest of fiscal 2015, we are focused on driving more profitable sales growth, and the second quarter is off to a solid start. Comparable store sales in December increased 1.2%, with fewer in-season promotional markdowns than last year and growth in customer traffic.”

FDO’s Dividend

FDO paid its most recent dividend of 31 cents on October 15. We expect the company to declare its next dividend in the next few weeks.

Stock Performance

FDO stock was down 45 cents, or 0.57%, in pre-market trading.

FDO Dividend Snapshot

As of Market Close on January 7, 2014

FDO dividend yield annual payout payout ratio dividend growth

Click here to see the complete history of FDO dividends.

The Bottom Line

Family Dollar (FDO) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.1 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.