Please ensure Javascript is enabled for purposes of website accessibility
Home / News / Headlines / Family Dollar 1Q results miss Wall Street’s expectations

Family Dollar 1Q results miss Wall Street’s expectations

MATTHEWS (AP) — Family Dollar Stores Inc.’s fiscal first-quarter earnings fell by 47 percent to $41.4 million as expenses climbed and it incurred fees tied to its pending acquisition by Dollar Tree.

Chairman and CEO Howard Levine said in a statement on Thursday that the company expected the quarter to be challenging as it continues to transition from a very promotional merchandising strategy to a more everyday low price strategy.

The Matthews, North Carolina-based company said it had a profit of 36 cents per share for the period ended Nov. 29, 2014. Earnings, adjusted for costs related to its proposed acquisition by Dollar Tree, came to 44 cents per share.

The results missed Wall Street expectations. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of 59 cents per share.

Family Dollar’s selling, general and administrative expenses and interest expense climbed in the quarter.

The discount retailer posted revenue of $2.56 billion in the period, also missing Wall Street forecasts. Analysts expected $2.58 billion, according to Zacks.

Sales at stores open at least a year, a key indicator of a retailer’s health, rose 1.2 percent in December thanks in part to better traffic and fewer in-season promotional markdowns than the prior-year period. This figure excludes results from stores recently opened or closed.

For the quarter, sales at stores open at least a year edged down 0.4 percent due to slight decreases in the average customer transaction value and the number of customer transactions.

Family Dollar’s selling, general and administrative expenses and interest expense climbed in the quarter.

Last month Family Dollar announced that it had delayed a shareholder vote on its proposed acquisition by Dollar Tree until Jan. 22. The company agreed last summer to be acquired by Dollar Tree Inc. for $8.5 billion, or $74.50 per share. It has rejected buyout offers from Dollar General Corp., but Dollar General has still pursued its rival – extending its offer to acquire Family Dollar for $80 per share until Jan. 30.

Shares of Family Dollar fell 61 cents to $78.25 in premarket trading an hour before the market opening.

Leave a Reply

Your email address will not be published. Required fields are marked *

*