US retailer Family Dollar has indicated that it will look to continue the acceleration of its comparable-store sales growth as it looks to build revenues and profits at its discount chain.
The company today (7 April) posted a better-than-expected 33% jump in second-quarter profits on higher sales and margins.
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Total revenue rose 4.9% to US$2.09bn for the three months to 27 February. Identical-store sales were up 3.6% on higher traffic and increased basket spend, Family Dollar revealed.
“We are seeing some nice acceleration in comp-store sales,” chief executive and chairman Howard Levine suggested during a conference call with analysts.
Moreover, the low-priced retail chain has witnessed a continued acceleration of same-store sales in March.
“The trend we are seeing from prior quarters with an acceleration of comps continued into March,” Levine confirmed.
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By GlobalDataThis acceleration reflects the positive impact of this year’s early Easter and good weather but Levine insisted the company believes it will be able to sustain its same-store sales momentum throughout the year.
Family Dollar has predicted that same-store sales will rise by 6-8% in the third quarter and insisted that ID sales would continue to feel the benefit of its moves to accept food stamps and extend opening hours.
“The maturation of both of those initiatives is long… One of the things that we have really worked on is that we are doing a much better job with our in-store signage to communicate with our customers what is new and different,” Levine said.
In addition to the introduction of longer opening hours, Family Dollar has looked to introduce “better presentation of merchandise” and focus on its “strong value message”, he added.
“Price perception – not only during promotional events but every day pricing – is something that we have talked a lot about and it is very important for us to maintain our strong price perception… In a nutshell, the key is to manage and improve your price perception while also increasing profitability, and that is a challenge but it is something we have grown more comfortable with,” he claimed.
In order to continue to drive identical-sales growth in the coming year, management revealed that Family Dollar has begun work on a store remodelling programme that will improve merchandising and layout at existing stores. Further details of the programme, which is yet to be launched, will be revealed at a later date.
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Family Dollar Holdings, Inc.