Family Dollar's Earnings Spike Represents Dollar Stores' Growth

Family Dollar Stores' (NYSE:FDO) net income spiked 26.3 percent to $102.2 million for the company's fiscal fourth quarter.

Net sales also rose 5.8 percent in the quarter to $2.5 billion and the retailer's fiscal and net income rose 5.1 percent for fiscal year 2013 to $443.6 million, or $3.83 per diluted share.

Family Dollar's earnings spike mimics the steady earnings increases by the other major dollar store chains. So far in 2013, Dollar Tree (Nasdaq: DLTR) is up 41 percent year-to-date, and Dollar General (NYSE: DG) is up 29 percent.

Industry observers attribute dollar stores' growth to improved product assortment – including fresh and frozen foods – at the chains. In fact, Family Dollar's sales for the quarter were strongest in the consumables category, rising 8.3 percent during the quarter. Plus, the dollar stores appeal to shoppers who are making more small-basket convenience trips.

And the major dollar store chains show no signs of slowing down. By the end of fiscal 2013, Family Dollar plans to open more than 600 stores, Dollar Tree will open more than 300 new stores, and Dollar General plans to open 500 stores.

For more, see:
This BizJournals article
This Investor Place article

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