Family Dollar Stores' fiscal Q4 earnings rose 8% to US$79.8M as revenue grew 9% to US$2.13B; company says it plans to open 450-500 new stores in fiscal 2012, a more than 50% jump from fiscal 2011

Cindy Allen

MATTHEWS, North Carolina , September 28, 2011 (Associated Press) – Family Dollar Stores Inc.'s fiscal fourth-quarter net income climbed 8 percent. Shoppers looking for bargain spent more as they stocked up on frequently used items.

The discounter said Wednesday that it plans to open 450 to 500 new stores in fiscal 2012, which would be a more than 50 percent jump compared to the number of openings in fiscal 2011.

The Matthews, N.C. company is looking to expand at a time when shoppers are looking to stretch their money further and are wary of economic uncertainty and high unemployment. A move by dollar stores to add more grocery items has also helped them steal business away from grocers and big-box stores like Target Corp. and Wal-Mart Stores Inc.

Family Dollar, which rejected a $7 billion takeover bid by Nelson Peltz's Trian Fund Management LP in March, earned $79.8 million, or 66 cents per share, for the period ended Aug. 27.

This beat the 63 cents per share that analysts polled by FactSet predicted, on average. In the year-ago quarter, Family Dollar earned $74 million, or 56 cents per share.

Revenue rose 9 percent to $2.13 billion from $1.96 billion, helped by sales of consumables, seasonal items and electronics. Consumables are goods that shoppers use frequently and then go out and buy more, such as food, paper towels and cleaning products.

Wall Street expected revenue of $2.12 billion.

Revenue at stores open at least a year increased 5.6 percent on better traffic and a higher average receipt. This figure is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.

For the year, Family Dollar earned $388.4 million, or $3.12 per share. That compares with earnings of $358.1 million, or $2.62 per share, in the previous year.

Annual revenue increased 9 percent to $8.55 billion from $7.87 billion, benefiting from strong sales of consumables.

Revenue at stores open at least a year climbed 5.5 percent.

Looking ahead, Family Dollar said that it anticipates fiscal 2012 earnings of $3.50 to $3.75 per share, with revenue up 8 percent to 10 percent. That implies revenue of about $8.98 billion to $9.41 billion. Revenue at stores open at least a year is expected to rise 4 percent to 6 percent.

The retailer predicts first-quarter earnings of 65 cents to 73 cents per share, with revenue at stores open at least a year up 4 percent to 6 percent.

Analysts expect full-year earnings of $3.59 per share on revenue of $9.21 billion. First-quarter earnings are estimated at 66 cents per share.

Family Dollar has more than 7,000 stores in 44 states.

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