Family Dollar Down to Strong Sell - Analyst Blog
17 1월 2014 - 12:50AM
Zacks
On Jan 14, 2014, Zacks Investment
Research downgraded Family Dollar Stores Inc.
(FDO), the self-service retail discount store chain, to a Zacks
Rank #5 (Strong Sell).
Why the
Downgrade?
Estimates for Family Dollar have
shown a downtrend since the company reported soft first-quarter
fiscal 2014 results on Jan 9. The quarterly earnings of 68 cents a
share missed the Zacks Consensus Estimate by a penny and dropped
1.4% from 69 cents delivered in the prior-year quarter.
The Matthews, N.C. based company
said that comparable-store sales fell 2.8% with customer
transactions and average consumer transaction value also declining.
Comps faced tough year-over-year consumables comp comparisons.
Further, management added that comps for the month of December
tumbled 3%, given the uneven economic scenario and tough consumer
environment as softness persists in discretionary categories.
However, a 3.2% increase in revenue
to $2,499.7 million brought the company respite, though it fell
short of the Zacks Consensus Estimate of $2,504 million.
Going forward, Family Dollar, which
competes with Dollar General Corporation (DG),
does not see much improvement in macroeconomic trends and as a
result lowered its earnings expectations.
Management took a cautious stance
while providing guidance for fiscal 2014. Family Dollar now
projects earnings in the band of 85 cents to 95 cents a share for
the second quarter and between $3.25 and $3.55 per share for fiscal
2014. Earlier, the company had projected earnings in the range of
$3.80 to $4.15.
The lower-than-expected results as
well as trimmed guidance triggered a downtrend in the Zacks
Consensus Estimates, as analysts become less constructive on the
stock’s future performance. This is evident from the movement
witnessed in the Zacks Consensus Estimate that fell 13.8% to $3.43
for fiscal 2014 and 9.1% to $4.00 per share for fiscal 2015 in the
past 7 days.
Other Stocks that Warrant a
Look
Other better-ranked retail stocks
that look promising and are expected to continue with their upbeat
performance include The TJX Companies, Inc. (TJX)
and Michael Kors Holdings Limited (KORS), both of
which hold a Zacks Rank #2 (Buy).
DOLLAR GENERAL (DG): Free Stock Analysis Report
FAMILY DOLLAR (FDO): Free Stock Analysis Report
MICHAEL KORS (KORS): 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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