The hits just keep on coming from the country’s dollar stores. Family Dollar Stores (NYSE: FDO) reported fourth-quarter and full-year earnings this morning that met or exceeded analysts’ expectations, and the company announced a $750 million stock buyback program.
Family Dollar reported fourth-quarter diluted earnings of 56 cents a share, up more than 30% from the same period a year earlier. Sales grew 8% to $1.96 billion. Analysts were expecting EPS of 51 cents a share and revenue of $1.96 billion. The results were comparable to earnings at Dollar Tree (NASDAQ: DLTR) and Dollar General (NYSE:DG
), which reported second-quarter earnings in August.
Family Dollar noted same-store sales for the quarter were up 6.1%. For comparison purposes, Wal-Mart Stores (NYSE:WMT) reported U.S. same-store sales were down 1.8% in its most recent quarter, while Target (NYSE:TGT) said same-store sales rose by 1.7% in its most recent quarter.
For its full fiscal year 2010, Family Dollar reported revenue of $7.87 billion and earnings of $2.62 a share, a gain of 26.6% over fiscal year 2009.
Analysts were expecting EPS of $2.58 on revenue of $7.87 billion.
In its outlook for fiscal 2011, Family Dollar said that it planned open about 300 new stores and renovate 600 to 800 existing stores.
The company also intends to drive revenue growth by continuing its global sourcing and private branding programs. Family Dollar forecast diluted EPS of $2.95 to $3.15 for 2011, along with sales growth of 8% to 10% and same-store sales growth of 5% to 7%. The company also forecast capital spending of $300 to $350 million.
For the first quarter of 2011, Family Dollar expects same-store sales growth of 5% to 7% and diluted EPS of 55 cents to 60 cents. Analysts are expecting EPS of 57 cents for the first quarter on revenue of $1.95 billion.
The company’s forecast looks about right for an economy that shows no signs of really recovering from a recession that officially ended more than a year ago. Unemployment could rise to above 10%, which is positive news for dollar stores, provided unemployment benefits don’t expire. As long as these stores can offer value at very low prices, customers who are watching every dime will continue to shop there.
Family Dollar shares are up about 3% in very early trading this morning.
