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Family Dollar Stores Inc.'s fiscal second-quarter profit rose 11 percent as shoppers continued to head in for the bargains and convenience that its stores offer.
Discounters like Family Dollar have benefited as economic uncertainty persists as consumers strive to stretch their dollars further. Many also like the convenience that dollar stores offer, as they often carry a range of basic household goods and food items.
Family Dollar said that it is looking to provide a wider range of products in order to appeal to a wider swath of shoppers. Because of this effort, the company anticipates that its revenue will continue to climb for the remainder of the fiscal year.
Its shares rose 17 cents to $58.41 in afternoon trading Wednesday. They are near their 52-week high of $60.53 set in late October, and are 31 percent above their low for the past year of $44.42 set in early August.
Family Dollar reported Wednesday that its net income rose to $136.4 million, or $1.15 per share, for the quarter ended Feb. 25, from $123.2 million, or 98 cents per share, in the prior-year period.
The latest results topped the $1.13 per share that analysts polled by FactSet expected.
Revenue rose 9 percent to $2.46 billion from $2.26 billion, matching Wall Street's estimate.
Revenue at stores open at least a year increased 4.5 percent on better traffic and a slight rise in the average customer transaction value. This figure is a key indicator of a retailer's health because it excludes results from stores recently opened or closed.
Family Dollar said that its strongest sales categories were seasonal, electronics and consumables.
The Matthews, N.C., company predicts full-year earnings of $3.55 to $3.75 per share with revenue up between 9 percent and 10 percent. This implies revenue of $9.32 billion to $9.41 billion. Revenue at stores open at least a year is expected to increase 5 percent to 6 percent. Analysts forecast full-year earnings of $3.62 per share on revenue of $9.3 billion.
For the third quarter, Family Dollar foresees third-quarter earnings of $1.01 to $1.11 per share. Revenue at stores open at least a year is expected to rise 5 percent to 7 percent. Analysts expect third-quarter earnings of $1.06 per share.
Family Dollar has more than 7,100 stores in 45 states.