Family Dollar Downgraded to Strong Sell - Analyst Blog
21 1월 2013 - 9:20PM
Zacks
Zacks Investment Research
downgraded Family Dollar Stores Inc. (FDO) to a
Zacks Rank #5 (Strong Sell) on Jan 12, 2013.
Why the
Downgrade?
Family Dollar has witnessed a sharp
downward revision in estimates after posting lower-than-expected
first-quarter fiscal 2013 results on Jan 3, 2013, that prompted
management to take a conservative stance on its future
earnings.
The quarterly earnings of 69 cents
a share missed the Zacks Consensus Estimate of 74 cents but inched
up 1.5% from 68 cents earned in the prior-year quarter. The
earnings also came in at the lower-end of the previously provided
guidance range of 69 cents to 78 cents due to gross margin pressure
coupled with anticipated headwinds related to insurance
expenditure.
The increase in sales of lower
margin merchandises weighed upon the company’s gross margin that
contracted approximately 120 basis points to 34.1% during the
quarter under review. Increased discounts and higher inventory
shrinkage also hurt the margins. For fiscal 2013, management
expects gross margin to remain under pressure.
Management anticipates earnings
between $1.18 and $1.28 for the second quarter and in the band of
$3.95 to $4.20 per share for fiscal 2013. The company had earlier
forecasted fiscal 2013 earnings between $4.10 and $4.40 per
share.
The Zacks Consensus Estimate for
the second and third quarters of fiscal 2013 dropped 11.5% and 2.5%
to $1.23 and $1.19 per share, respectively, over the past 30 days.
Moreover, for fiscal 2013 and 2014, the Zacks Consensus Estimate
fell by 6.1% and 7.3% to $3.99 and $4.47 per share, respectively,
over the same time frame.
Other Stocks to
Consider
Not all discount store chains are
performing as disappointingly as Family Dollar. Big Lots
Inc. (BIG), Ross Stores Inc. (ROST) and
The TJX Companies Inc. (TJX) look promising and
are expected to continue with their upbeat performances in the
coming quarters. These stocks hold a Zacks Rank #2 (Buy).
BIG LOTS INC (BIG): Free Stock Analysis Report
FAMILY DOLLAR (FDO): Free Stock Analysis Report
ROSS STORES (ROST): Free Stock Analysis Report
TJX COS INC NEW (TJX): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
TJX Companies (NYSE:TJX)
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TJX Companies (NYSE:TJX)
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