Family Dollar Q2 Earnings Beat Expectations

reported upbeat earnings for the second quarter on Wednesday. The Matthews, North Carolina-based company posted quarterly net earnings of $76.7 million, or $0.67 per share, compared to $90.9 million, or $0.80 per share, in the year-ago period. Excluding non-recurring items, the company's adjusted earnings came in at $0.74 per share. Its revenue surged 3% to $2.8 billion versus $2.72 billion. However, analysts were expecting earnings of $0.73 per share on revenue of $2.80 billion. Net sales of Consumables rose 4.6% in the second quarter, while sales of Discretionary categories slipped 1.0% in the quarter. Same-store sales gained 0.5% in the quarter. Gross profit for the second quarter climbed to $931.1 million, from $902.3 million. Selling, general and administrative expenses jumped to $805.3 million, versus $762.0 million. During the first half, Family Dollar opened 161 new stores and closed 19 stores, versus 244 new store openings and 22 closings in the first half of fiscal 2014. At February 28, 2015, Family Dollar's merchandise inventories rose 3.5% to $1.72 billion, versus $1.66 billion at March 1, 2014. "We continue to see tangible benefits from the investments we have made to strengthen our value proposition for customers. Our comparable store sales and customer traffic trends are improving, and we are beginning to see stabilization in key categories. While our trends in late-February were adversely impacted by severe winter weather, our sales trends in March rebounded nicely, reflecting both improved traffic trends and the benefit of an earlier Easter," said Howard R. Levine, Chairman and CEO. The average estimate among 24 Estimize users was for earnings of $0.72 per share and revenue of $2.79 billion. Family Dollar shares fell 0.16% to $79.00 in pre-market trading.