Family Dollar’s full-year results reaffirm the group’s “significant secular growth opportunity” in gaining share from traditional supermarkets thanks to new store opening and increased footfall, according to analysts.
The retailer yesterday (3 October) booked a net profit in the 12 months ended 25 August of to US$422.2m, an 8.7% increase on the prior year. Operating profit grew 7.8% to $688.1m, while net sales climbed 9.2% in the period to $9.33bn.
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The figure was boosted by increased customer traffic and an increase in the average customer transaction value. Family Dollar made 475 new store openings during the year, compared to 300 last year.
William Blair & Co analyst Mark Miller said the group’s results “reaffirmed the company’s significant secular growth opportunity to gain share from conventional supermarkets, which are challenged on all fronts”.
“We remain encouraged with management’s initiatives to expand the consumables assortment and upgrade the store experience,” he said, adding that “swing factors” for fiscal 2013 will include management’s ability to reduce inventory levels and sustain traffic growth in “an increasingly competitive environment”.
The growth in dollar stores in the US has increased significantly of late as retailers experience rising demand for value from consumers who have seen their finances squeezed. While dollar stores have been around for some time, the industry has seen an increase in the opening of big name dollar stores since the recession.
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By GlobalDataFamily Dollar is targeting fiscal 2013 full-year EPS of between $4.10 and $4.40, compared with $3.58 in fiscal 2012.
