Family Dollar Profit Tops Analyst Estimates; Company Boosts Store Openings
Family Dollar Stores Inc. reported fourth-quarter profit that beat analysts’ estimates and plans to accelerate store openings after hedge fund Trian Fund Management LP urged faster sales growth.
Net income totaled 56 cents a share in the quarter ended Aug. 28, the Matthews, North Carolina-based discount retailer said today in a statement. Analysts in a Bloomberg survey projected on average a profit of 51 cents. The company forecast per-share profit of $2.95 to $3.15 for this year, compared with analysts’ estimates of $2.96.
Family Dollar, the operator of more than 6,800 stores in 44 states, plans to open 300 new outlets this year, a 50 percent increase over openings last year. It will also renovate 600 to 800 shops, Howard Levine, chairman and chief executive officer, said in the statement.
Trian, headed by Nelson Peltz, Peter May and Edward Garden, said July 28 that it owned 6.58 percent of Family Dollar. The New York-based firm said in a securities filing it wanted the retailer to boost sales growth and consider buying back more shares.
Family Dollar said directors authorized share repurchases of $750 million, using cash and potential debt financings. It canceled previous authorizations.
The board granted permission to buy back $400 million in shares in November 2009, spokesman Josh Braverman said today. It had about $130 million of that remaining at the end of the fiscal year, he said.
Fourth-quarter net income increased 23 percent to $74 million from $60.1 million a year earlier, when per-share earnings totaled 43 cents. As reported Sept. 2, revenue rose 8 percent to $1.96 billion, boosted by a gain of 6.1 percent by stores open for more than 13 months.
Family Dollar rose $1.13, or 2.6 percent, to $44.47 at 10:11 a.m. on the New York Stock Exchange. The shares climbed 56 percent this year through yesterday.
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