Value chains like Family Dollar, Dollar General and 99 Cents Only Stores are seeing the benefits of offering low-cost products during tough economic times when recession-weary consumers are cautious about dishing out cash.
North Carolina-based Family Dollar Stores ( FDO) reported earnings of 77 cents per share for the three-month period ended May 29, compared with 62 cents in the corresponding period a year ago; it was a penny ahead of the consensus analyst estimate. Net income for the quarter climbed 19% to $104.4 million, from $87.7 million in the year ago period. Third-quarter sales fell to $2 billion, in line with estimates. Reductions in markdown expenses and lighter inventory padded the retailer’s to gross profit margins, which expanded to 36.6% from 36.2%.
“People are looking for any deals they can find these days,” says Phoenix Partners analyst Robert Samuels. Value stores are appealing to consumers, and shoppers are more likely to open their wallets where they can stretch a buck.
Full story: Tightfisted Consumers Open Wallets at Family Dollar – Forbes