Family Dollar posts strong Q3 results driven by efforts

22 Jun '06

4 min read

The gross profit margin, as a percentage of sales, was 33.6 Percent in the third quarter of fiscal 2006, unchanged compared to the third quarter of fiscal 2005. As a percentage of sales, lower shrinkage expense offset higher markdown expense and higher freight costs resulting from higher fuel costs.

While sales of lower-margin consumable merchandise continued to increase at a faster rate than sales of higher-margin discretionary merchandise, higher purchase markups across a majority of departments offset the impact of an unfavorable sales mix in the third quarter of fiscal 2006 when compared with the third quarter of fiscal 2005.

Selling, general and administrative (SG&A) expenses, as a percentage of sales, were 27.7 Percent in the third quarter of fiscal 2006, unchanged compared with the third quarter of fiscal 2005. As a percentage of sales, higher incentive compensation expense was partially offset by improved performance of the Urban Initiative and lower insurance costs.

In the third quarter of fiscal 2006, the Company recorded net interest expense of approximately $1.0 million compared with net interest income of $1.4 million in the third quarter of fiscal 2005. The Company had no outstanding debt in the third quarter of fiscal 2005.

During the third quarter of fiscal 2006, the Company repurchased approximately 3.9 million shares at an average cost of $25.94. As of May 27, 2006, the Company had approximately 2.6 million shares remaining under current repurchase authorizations approved by the Board of Directors.

More Family Dollar Stores Inc News... More Apparel/Garments News - United States Of America...