US discount retailer Family Dollar Stores has recorded first-quarter earnings that came in at the lower end of its guidance due to gross margin pressure and expense headwinds.
In the three months ended 24 November, earnings amounted to US$80.3m, a drop of 0.1% on last year, the company reported today (3 January). Operating profit slid 2.3% to $127m.
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Chairman and CEO Howard Levine said: “Early results from our sales-driving initiatives exceeded our expectations in the first quarter, resulting in more gross margin pressure than anticipated. This mix pressure, combined with expected headwinds from insurance expense, resulted in earnings that were at the low end of our guidance.”
Net sales in the quarter increased 12.7% to $2.42bn, with comparable store sales up 6.6% due to increased customer traffic and an increase in the average customer transaction value.
The retailer said it expects diluted FY 2013 EPS of between $3.95 and $4.20 compared to $3.58 in fiscal 2012.
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