Family Dollar (NYSE:FDO) said Wednesday it grew its fiscal second-quarter profits by a stronger-than-expected 9.8% and forecast full-year results that would exceed Wall Street’s estimates.
The Charlotte-based discount retailer said it earned $123.2 million, or 98 cents a share, in the quarter ended February 26, compared with a profit of $112.2 million, or 81 cents a share, a year earlier. Analysts had been calling for EPS of 97 cents.
Sales increased 8.3% to $2.26 billion, matching consensus calls from analysts. As was previously reported, same-store sales increased 5.1% amid stronger customer traffic.
“Over the last several years, we have accelerated capability-building investments and increased our efforts to improve the in-store shopping experience,” CEO Howard Levine said in a statement. “These investments have provided a solid foundation for the successful launch of our strategic plan to re-accelerate revenue growth, expand operating margins and optimize our capital structure.”
Looking ahead, Family Dollar forecasted same-store sales would rise 5% to 7% this quarter, translating to EPS of 92 cents to 97 cents. Analysts had been looking for EPS of 94 cents.
For the full year, Family Dollar said it sees EPS of $3.13 to $3.23 on a 5% to 7% increase in same-store sales. Even the low end of that EPS range would top the Street’s view of $3.12.Family Dollar also said it plans to open about 300 new stores and close 80-100 in this fiscal year.In the wake of its earnings beat and upbeat guidance, shares of Family Dollar rose 2.08% to $53.49 ahead of Wednesday’s open, putting the stock on track to build on its modest 2011 gain of 5.4%.