Family Dollar Posts Record Q4 Profits

Charlotte, NC (AHN) - Family Dollar Stores Inc. reported Friday a 46 percent earnings increase for the fiscal fourth quarter as cash strapped consumers turned to their stores for discount products.

The discount chain posted fourth quarter earnings of $53.2 million or 38 cents a share, compared to $37.8 million or 26 cents a share in the same period a year earlier.

Revenue increased 8.2 percent to $1.76 billion, from $1.63 billion last year. Same-store sales rose 5.6 percent.

"After a challenging first half, these results reflect how quickly our team has adapted to the changing macro environment," said Howard R. Levine, Chief Executive Officer, according to Business Wire. "Strong sales of consumables and effective management of inventory risk, combined with disciplined expense control resulted in robust earnings growth," he added.

Gross profit margin was slightly lower at 32.9 percent compared to 33.1 percent in the fourth quarter last year.

For fiscal year 2008, earnings totaled $233.1 million or $1.66 a share, up 2.5 percent from $242.9 million or $1.62 in 2007.

Looking forward, Family Dollar expects net sales in fiscal year 2009 to grow by 3 to 5 percent with same-store sales increasing roughly 1 to 3 percent.

For the first quarter, the company expects to earn between 38 cents to 42 cents a share with sales growth of 4 to 6 percent.

"We will continue to increase our relevancy to the customer. In an environment of rising unemployment, strong inflationary pressures and volatile energy prices, value and convenience are more important than ever to our customers," said Levine.