Family Dollar Stores Hits Estimates, but Results Lag Last Year's

Family Dollar Stores (NYS: FDO) reported earnings on Jan. 5. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Nov. 26 (Q1), Family Dollar Stores met expectations on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue increased, and earnings per share increased significantly.

Gross margins dropped, operating margins improved, net margins were steady.

Revenue details
Family Dollar Stores recorded revenue of $2.1 billion. The 21 analysts polled by S&P Capital IQ looked for net sales of $2.2 billion. Sales were 7.6% higher than the prior-year quarter's $2.0 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
EPS came in at $0.68. The 23 earnings estimates compiled by S&P Capital IQ anticipated $0.68 per share. GAAP EPS of $0.68 for Q1 were 17% higher than the prior-year quarter's $0.58 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 35.3%, 70 basis points worse than the prior-year quarter. Operating margin was 6.3%, 20 basis points better than the prior-year quarter. Net margin was 3.7%, about the same as the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods.

Looking ahead
What does the future hold?

Next quarter's average estimate for revenue is $2.5 billion. On the bottom line, the average EPS estimate is $1.13.

Next year's average estimate for revenue is $9.3 billion. The average EPS estimate is $3.66.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 543 members out of 592 rating the stock outperform, and 49 members rating it underperform. Among 186 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 173 give Family Dollar Stores a green thumbs-up, and 13 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Family Dollar Stores is hold, with an average price target of $56.26.

At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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