Earnings Preview: Family Dollar Stores, Inc

| About: Family Dollar (FDO)

Company Profile

Family Dollar Stores, Inc. operates a chain of self-service retail discount stores primarily for low and middle income consumers in the United States.

Family Dollar Stores (NYSE:FDO) is scheduled to report its third quarter earnings results on June 28, 2012, before market open.

Technical Overview

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Family Dollar has a market cap of $8.22 billion and it is currently trading around $70.43 with a 52 week range of $44.42 to $74.73. The stock has risen 22.15% year to date. The following table provides the key financial ratios for Family Dollar:

Key Ratio Value
Current Ratio 1.52
PEG 1.43
P/E 21.31
Forward P/E 17.09
Profit Margin 4.58%
Return On Assets (ROA) 13.39%
Return On Equity (ROE) 33.82%

Recent News

  • On June 4, 2012, Family Dollar Stores announced that it has entered into a multi-year agreement with Coinstar, Inc.'s (NASDAQ:CSTR) Redbox, America's destination for entertainment, to provide Redbox® kiosks at Family Dollar locations across the U.S.
  • On May 10, 2012, Family Dollar Stores announced that the Company's Board of Directors has declared a regular quarterly cash dividend on the Company's common stock of $0.21 per share, payable Friday, July 13, 2012, to shareholders of record at the close of business on Friday, June 15, 2012.
  • On May 10, 2012, In continuing to execute its retail expansion plans, NetSpend Holdings, Inc. (NASDAQ:NTSP) announced that it has entered into a distribution agreement to sell the NetSpend Visa (NYSE:V) Prepaid Debit Card at Family Dollar Stores locations nationwide.
  • On May 04, 2012, Family Dollar Stores announced that it has entered into a strategic partnership with McLane, the nation's leading provider of grocery and food service supply chain solutions. Beginning in September, this partnership will enable Family Dollar to offer customers a broader selection of merchandise, including refrigerated and frozen food, across the retailer's more than 7,200 locations in 45 states.
  • On April 23, 2012, Family Dollar Stores announced Dorlisa K. Flur, Vice Chair - Strategy and Chief Administrative Officer, intends to leave the Company to pursue other interests, effective May 2, 2012.
  • On April 10, 2012, Family Dollar Stores announced that it has named Mary A. Winston to the position of Executive Vice President and Chief Financial Officer. Ms. Winston will report to Howard R. Levine, Chairman and CEO, and will have executive responsibility for Family Dollar's financial operations, including accounting, treasury, tax, financial planning, investor relations, and internal audit.
  • On April 9, 2012, Family Dollar Stores announced that it has named Jon Broz to the position of Vice President and Assistant General Counsel, Litigation. Mr. Broz will report to James C. Snyder, Jr., Senior Vice President - General Counsel and Secretary.

Analyst Guidance and Earnings History

The third quarter revenues are expected to be $2.37 billion when compared to $2.15 billion for the same quarter last year. Earnings per share for the third quarter are expected to be $1.07 a share, up from a 91 cents a share in the year-ago period.

The average price target from analyst for Family Dollar is $66.10 with average rating is OVERWEIGHT

Out of the last 4 quarters, Family Dollar has met or exceeded the EPS estimates 3 times. The following chart shows the Analyst estimates history and the actual EPS results:

The following chart shows the annual summary of Sales and Net income for Family Dollar:


Dollar General Corp (NYSE:DG) and Dollar Tree Inc (NASDAQ:DLTR) are considered as major competitors for Family Dollar Stores and the table below provides the key metrics for these companies:

Name Family Dollar Stores Inc. Dollar General Corp Dollar Tree Inc
52 Week Price $72.45 $52.20 $113.49
Year-To-Date Price 32.66% 53.49% 73.20%
Market Capitalization $8.5B $17.2B $13.1B
Earnings per Share 3.4 2.4 4.24
Total Revenue $8.9B $15.3B $6.8B
Employees (Full-Time) 31000 90000 14170

Sources: Some of the data is taken from Google Finance, Yahoo Finance, Nasdaq, Finviz and investor sites.

Disclaimer: I am not a registered investment advisor and do not provide specific investment advice. The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. It is up to investors to make the correct decision after necessary research.

Additional Disclosure: I change my positions very frequently and may initiate either long or short positions in the above mentioned stocks at any time.

Disclosure: I am long V.

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Tagged: , Discount, Variety Stores, Earnings
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