Family Dollar's Distribution Center in Utah - Analyst Blog
18 10월 2013 - 8:00AM
Zacks
Family Dollar Stores Inc. (FDO) inaugurated its
11th distribution center in St. George, Utah. The facility covering
an area of 817,000 square feet will deploy 400 associates to handle
the work and will provide services to about 800 stores. Running at
its optimum capacity, the center will be capable of shipping 40
million cases in a year.
Last week this self-service retail discount store chain came out
with its fourth-quarter fiscal 2013 results. The quarterly earnings
of 86 cents a share beat the Zacks Consensus Estimate by a couple
of cents, and rose 14.7% from 75 cents delivered in the prior-year
quarter. Consumables category was the driving factor behind the
sturdy results.
The strength witnessed in the Consumables category came on the
back of robust growth across refrigerated and frozen food, health
aids and tobacco. Strong focus on consumables helped Family Dollar
drive business from budget-constrained consumers.
Family Dollar posted a 5.8% increase in revenue to $2,502.3
million from the prior-year quarter, but fell short of the Zacks
Consensus Estimate of $2,556 million.
Moreover, this Matthews, NC-based company said that
comparable-store sales remained flat with the traffic count and
average consumer transaction value also remained even. Earlier,
management had forecasted a 2% rise in comparable-store sales.
Management took a cautious stance while providing guidance for
fiscal 2014. Family Dollar now projects earnings in the band of 65
cents to 75 cents a share for the first quarter and between $3.80
and $4.15 per share for fiscal 2014.
Consequently, the Zacks Consensus Estimates have been portraying
a downtrend. For the first quarter and fiscal 2014, the Zacks
Consensus Estimates dropped 9.1% to 70 cents and 3.4% to $4.01 per
share, respectively, in the last 30 days.
The economy is still not completely out of hibernation and
consumers will remain cautious on their spending, buying only basic
necessities. Consequently, we could witness more competitive
pricing and new products to attract shoppers.
A price war would definitely eat away margins, which in turn
would affect the company’s results. In order to remain competitive,
it would be effective to try out innovative strategies to lure
target consumers. Family Dollar currently holds a Zacks Rank #4
(Sell).
Other stocks worth considering in the retail industry, include
The TJX Companies, Inc. (TJX), Dollar
General Corp. (DG) and Ross Stores Inc.
(ROST), all of which hold a Zacks Rank #2 (Buy).
DOLLAR GENERAL (DG): 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
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