Family Dollar (FDO) Projects Better-Than-Expected Gross Margins
Analysts at Northcoast Research reiterate their “buy” rating on Family Dollar Stores Inc (NYSE: FDO), while raising their estimates for the company. The target price for FDO is set to $41.
Family Dollar Stores has reported 4.9% growth in its 2Q FY10 sales to $2.09 billion, ahead of expectations. The company has raised its 2Q FY10 EPS guidance to $0.75-$0.80 from $0.65-$0.70. “Revised guidance compares to our original estimate of $0.66 and prior consensus of $0.67; with the upside coming from better-than-expected gross margin trends,” the analysts say.
“We believe the largest driver to the margin surprise was stronger-than-anticipated sales in the home category,” the analysts add. Northcoast Research has raised its EPS estimates for FY10 and FY11 by $0.14 to $2.44 and by $0.15 to $2.69, respectively.
