Family Dollar Killed for Earnings Miss

Family Dollar Stores, Inc. (FDO) posted first quarter earnings of $0.58 per share this morning, falling short of the $0.61 expected by Wall Street. Shares fell by as much as 9% in early trading despite the discount retailer slightly exceeding sales estimates and posting adequate full-year guidance.

Family Dollar pulled in $2.0 billion in revenue during the quarter, edging the consensus analyst estimate of $1.98 billion. Net income for the quarter was up 9.9% compared to the same period last year, while sales rose 9.5%. Same store sales were up 6.9%, the company’s best Q1 jump in 12 years.

The company now expects earnings of $3.08 to $3.23 per share for its full fiscal year, a 17-23% improvement over last year’s EPS figure ($2.62) and in line with Wall Street’s average estimate ($3.18). The earnings estimate is based on the company’s assumption of 8-10% sales growth, while analysts are currently projecting an 8.3% rise.

Shares of FDO fell as low as $44.85 (-9.04%) in the first hour of today’s session, where they carry a 1.38% dividend yield.

Including last year’s 14.8% dividend hike, Family Dollar Stores has raised its dividend for 34 consecutive years.

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