Dollar Stores Up Despite Fred's and Family Dollar Missing Analyst
NEW YORK (Associated Press) - Shares of dollar store operators rose Thursday
despite reports from Fred's Inc. and Family Dollar Stores Inc. of September
same-store sales weaker than analysts had expected.
Family Dollar's same-store sales increased 0.5 percent for the five weeks ended
Oct. 6, while analysts polled by Thomson Financial expected 0.9 percent growth.
Total sales rose 3.9 percent to $614.2 million from $591.3 million a year
earlier. The company said sales of food, seasonal and prepaid services were
strong, while sales of apparel were softer.
Same-store sales, or sales at locations open at least a year, is a key indicator
of retailer performance since it measures growth at existing stores rather than
newly opened ones.
Shares of the Family Dollar, which forecasts October same-store sales growth in
the range of flat to up 2 percent, rose 16 cents to $28.41 in late morning
Analysts expect Family Dollar to earn 45 cents per share for the quarter ending
Nov. 30, according to a poll by Thomson Financial.
Fred's said its same-store sales grew 1 percent for the period, while analysts
expected them to grow 1.5 percent. Total sales rose 2 percent to $161.4 million
from $158.7 million in September, which the company blamed on unusually warm
weather and disruptions from updating 98 stores.
Fred's shares rose 15 cents to $10.83 in late-morning trading Thursday.
Morgan Keegan analyst L. Calvin Sheppard said the July increase in the federal
minimum wage should help improve same-store sales, and maintained his
"Outperform" or "Buy" rating.
Analysts expect Fred's to earn 16 cents per share for the quarter ending Oct.
31, according to a poll by Thomson Financial.
Elsewhere in the sector, shares of 99 Cents Only Stores Inc. gained 13 cents to
$12.05, shares of Dollar Tree Stores rose 53 cents to $42.06 and Big Lots Inc.'s
stock grew by 44 cents to $29.88.