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Family Dollar reports record Q4 earnings
04 Oct '08
5 min read
Fiscal 2008 results:
As previously reported, sales for fiscal 2008 were $6.984 billion, or 2.2% above sales of $6.834 billion for fiscal 2007. As a reminder, fiscal 2008 had one less week of sales compared with fiscal 2007. Sales in comparable stores (for the comparable 52-week period in both years) increased 1.2%.
The increase in comparable store sales during the 52-week period was the result of an increase in the average customer transaction value. Customer traffic, as measured by the number of register transactions, was approximately flat for the year. During fiscal 2008, the Company opened 205 new stores and closed 64 stores.
Gross profit, as a percentage of sales, was 33.6% in fiscal 2008 compared to 34.0% in fiscal 2007. The decline in gross profit in fiscal 2008, as a percentage of sales, was primarily a result of stronger sales of lower-margin consumable merchandise.
SG&A expenses, as a percentage of sales, were 28.4% in fiscal 2008 compared with 28.3% in fiscal 2007. The modest increase in SG&A expenses, as a percentage of sales, was primarily a result of low comparable store sales performance and higher occupancy costs. The effect of these factors more than offset lower insurance expense and lower professional fees.
Net income per diluted share in fiscal 2008 increased 2.5% to $1.66 compared with $1.62 per diluted share in fiscal 2007. Net income for fiscal 2008 was $233.1 million compared to $242.9 million in fiscal 2007.
The Company's inventories at August 30, 2008, were $1.033 billion, or 3.1% below inventories of $1.066 billion at September 1, 2007. Average inventory per store (excluding in-transit inventory) at the end of fiscal 2008 was approximately 6% lower than the average inventory per store at the end of the fiscal 2007.
Cash Flow and Liquidity:
During fiscal 2008, the Company generated $515.8 million in operating cash flow compared with $415.8 million in fiscal 2007. Capital expenditures increased to $167.9 million in fiscal 2008 compared with $131.6 million in fiscal 2007. The increase in capital expenditures was a result of investments related to the rollout of the Company's Store of the Future technology initiative and investments in existing distribution centers. During fiscal 2008, the Company paid $67.4 million, or $0.49 per share, in dividends compared to $65.8 million, or $0.45 per share, in fiscal 2007.
Working capital in fiscal 2008 fell to $275.1 million, reflecting the reclassification of $222.1 million of auction rate securities to long-term assets. Due to the continued failure of auctions for these securities and the uncertainty regarding the timing of future liquidity, the investments were reclassified in the third quarter of fiscal 2008. At August 30, 2008, the Company had approximately $158.5 million in cash and cash equivalents.
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As previously reported, sales for fiscal 2008 were $6.984 billion, or 2.2% above sales of $6.834 billion for fiscal 2007. As a reminder, fiscal 2008 had one less week of sales compared with fiscal 2007. Sales in comparable stores (for the comparable 52-week period in both years) increased 1.2%.
The increase in comparable store sales during the 52-week period was the result of an increase in the average customer transaction value. Customer traffic, as measured by the number of register transactions, was approximately flat for the year. During fiscal 2008, the Company opened 205 new stores and closed 64 stores.
Gross profit, as a percentage of sales, was 33.6% in fiscal 2008 compared to 34.0% in fiscal 2007. The decline in gross profit in fiscal 2008, as a percentage of sales, was primarily a result of stronger sales of lower-margin consumable merchandise.
SG&A expenses, as a percentage of sales, were 28.4% in fiscal 2008 compared with 28.3% in fiscal 2007. The modest increase in SG&A expenses, as a percentage of sales, was primarily a result of low comparable store sales performance and higher occupancy costs. The effect of these factors more than offset lower insurance expense and lower professional fees.
Net income per diluted share in fiscal 2008 increased 2.5% to $1.66 compared with $1.62 per diluted share in fiscal 2007. Net income for fiscal 2008 was $233.1 million compared to $242.9 million in fiscal 2007.
The Company's inventories at August 30, 2008, were $1.033 billion, or 3.1% below inventories of $1.066 billion at September 1, 2007. Average inventory per store (excluding in-transit inventory) at the end of fiscal 2008 was approximately 6% lower than the average inventory per store at the end of the fiscal 2007.
Cash Flow and Liquidity:
During fiscal 2008, the Company generated $515.8 million in operating cash flow compared with $415.8 million in fiscal 2007. Capital expenditures increased to $167.9 million in fiscal 2008 compared with $131.6 million in fiscal 2007. The increase in capital expenditures was a result of investments related to the rollout of the Company's Store of the Future technology initiative and investments in existing distribution centers. During fiscal 2008, the Company paid $67.4 million, or $0.49 per share, in dividends compared to $65.8 million, or $0.45 per share, in fiscal 2007.
Working capital in fiscal 2008 fell to $275.1 million, reflecting the reclassification of $222.1 million of auction rate securities to long-term assets. Due to the continued failure of auctions for these securities and the uncertainty regarding the timing of future liquidity, the investments were reclassified in the third quarter of fiscal 2008. At August 30, 2008, the Company had approximately $158.5 million in cash and cash equivalents.
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Family Dollar Stores Inc
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