By Matt Jarzemsky
Family Dollar Stores Inc.'s fiscal-second-quarter profit rose 9.8% as the retailer benefited from sales growth and continued expansion.
For the quarter ended Feb. 26, Family Dollar reported a profit of $123.2 million, or 98 cents a share, up from $112.2 million, or 81 cents, a year earlier.
Earlier this month, the Charlotte, N.C., dollar-store chain said sales rose 8.3% to $2.26 billion. Same-store sales climbed 5.1% because of higher customer traffic and a "modest" increase in the average transaction value.
The company raised the low end of its current-year earnings expectations by five cents and is now projecting $3.13 to $3.23 a share. For the current quarter, it expects a profit of 92 cents to 97 cents, compared with the Thomson Reuters estimate of 94 cents.
Family Dollar and its competitors benefited from the economic downturn as consumers sought value. The company has received a lift from store additions, beefed-up private-label offerings and more branded merchandise. Spring-like weather in February helped the latest quarter's sales, following winter storms the previous month.
Family Dollar this month spurned billionaire Nelson Peltz's buyout interest and said the activists investor's roughly $7 billion offer undervalued the company.
Family Dollar operated 6,888 stores as of the end of the quarter, up from 6,655 a year earlier.
