Family Dollar Earnings Preview: Higher EPS and Sales Expected

Family Dollar

is scheduled to report fiscal first-quarter 2012 results tomorrow, January 5, after the closing bell. Investors could use a little good news, considering the shares have traded mostly between $56 and $60 since the end of October and analysts seem unenthused about the stock. The consensus forecast of analysts calls for Family Dollar to report quarterly earnings of $0.67 per share. That would up from $0.58 in the same period of last year, but is unchanged from the consensus EPS estimate 90 days ago. And so far, EPS are expected to grow sequentially and year over year in the current quarter. Note though that Family Dollar fell short of consensus EPS estimates in two of the past five quarters. Analysts also expect the retailer to report that revenues for the quarter rose 8.4% from a year ago to $2.2 billion. Sales likewise are expected to grow sequentially and year over year in the current quarter. Revenue has risen in the past four quarters.

Family Dollar operates a chain of approximately 7,000 retail discount stores in the United States. The company offers consumable household goods, domestic products, seasonal products, apparel and giftware. It is headquartered near Charlotte, N.C., is a component of the S&P 500 and was founded in 1959. Its market cap is now $6.8 billion. During the three months that ended in November, the company expanded its reach into California with four new stores there. More recently, Family Dollar appointed a new chief merchandising officer. (See also:

.)

Per-share earnings are expected to grow about 15% over the next five years and the dividend yield is 1.2%. Family Dollar's P/E and PEG ratios are less than the industry averages, and short interest is 2.3% of the float. Its return on equity is a healthy 30.9%. But of analysts who follow the stock, 12 recommend holding it while nine rate it a Buy or Strong Buy. And their mean price target of $59.58 per share is less than 4% higher than the current share price. The share price is almost 41% higher than the 52-week low, but only up about 5% from six months ago. And the share price recently slipped below the 50-day moving average. Over the past six months, the stock has outperformed such competitors as Dollar General

and Target

, but its performance has been generally in line with the broader markets.

.