Family Dollar Q3 profits jump

By Don Hogsett -- Home Textiles Today, 7/7/2003 12:00:00 AM

MATTHEWS, NC —

Helped by rising same-store sales and continued rapid expansion, third-quarter profits at Family Dollar Stores Inc. jumped up by 14.0 percent, to $69.6 million from $61.1 million last year.

Sales at the neighborhood small-store chain rose by 15.1 percent, to $1.2 billion from $1.0 billion last year, driven by new store openings. During the first nine months of the fiscal year that ended May 31, the retailer opened 285 new stores while closing 62 others, the pace of growth slowing somewhat from the 336 new stores opened, and 46 others closed, during the same period a year before.

Same-store sales, running strong in a soft economy, increased by 4.6 percent. Same-store sales in hardlines moved up by 5.4 percent, outpacing the 2.2 percent same-store sales growth in softlines. Customer count, measured by the number of cash register transactions in existing stores, improved by 3.6 percent, while the average transaction increased by 0.8 percent, to $8.72.

Average gross margin held relatively steady at 34.7 percent vs. 34.8 percent a year ago. Gross margin dollars increased by 14.9 percent, to $408.4 million form $355.3 million. Costs remained unchanged at 25.4 percent of sales.

Going forward, Family Dollar said it will continue to roll out new stores at a rapid pace, and plans to add about 10 percent net new stores in the new fiscal year that begins Aug. 31. To service the growing number of stores, Family Dollar will open a new 907,000 distribution center next month in Odessa, TX. Another, distribution center, its eighth, is on the drawing board for next year.

Family Dollar Stores Inc.