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Family Dollar reports 3% lift in Q2 sales as Dollar Tree transaction progresses

BY Michael Johnsen

MATTHEWS, N.C. – Family Dollar Stores on Wednesday reported that total net sales in the second quarter of fiscal 2015 increased 3% to $2.8 billion. Comparable store sales for the 13-week period increased 0.5% as a result of an increase in the number of customer transactions which was offset by a decrease in the average customer transaction value. 
 
“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," stated Howard Levine, Family Dollar chairman and CEO. "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,” he said. “We are excited about the pending merger with Dollar Tree, and our teams are working to ensure a successful integration.” 
 
Net sales of consumables increased 4.6% in the second quarter of fiscal 2015 and represented 72.3% of total net sales, compared to 71.1% of net sales in the second quarter of fiscal 2014. Net sales of discretionary categories (including apparel and accessories, home products and seasonal and electronics) decreased 1% in the second quarter of fiscal 2015 to 27.7% of net sales, compared to 28.9% of net sales in the second quarter of fiscal 2014. 
 
Capital expenditures were $176.5 million in the first half of fiscal 2015 as compared to $219.7 million in the first half of fiscal 2014. The reduction in capital expenditures was primarily due to fewer new store openings and a reduction in technology investments. These reductions were partially offset by increased investments in security equipment and merchandise fixtures in existing stores. 
 
During the first half of fiscal 2015, the company opened 161 new stores and closed 19 stores as compared to 244 new store openings and 22 closings in the first half of fiscal 2014. Family Dollar also renovated, relocated or expanded 291 stores in the first half of fiscal 2015, as compared to 319 stores in the first half of fiscal 2014. 
 
In light of its pending transaction Dollar Tree, the Company has not provided earnings guidance for fiscal 2015 and will not hold a conference call to discuss its second quarter results. 
 
 
 
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A.T. Kearney: U.S. tops in e-commerce opportunity

BY Marianne Wilson

NEW YORK — The United States is the top market for e-commerce, followed by China and the United Kingdom, according to A.T. Kearney’s 2015 Global Retail E-Commerce Index. Although e-commerce remains less than 10% of total retail sales in the United Sates, it has seen consistent growth, and rose by 15% in 2014.
 
The Index ranks the top 30 countries for e-commerce based on nine variables, including select macroeconomic factors as well as those that examine consumer adoption of technology, shopping behaviors, infrastructure, and retail-specific activities. It is designed to help retailers devise successful global online retail strategies and identify market investment opportunities while understanding the tradeoffs and barriers to success.
 
Globally, online sales increased more than 20% in 2014 to almost $840 billion, as online retailers continued expanding to new geographies and physical retailers entered new markets through e-commerce. One of the biggest expressions of the boom, according to the report, was in the stock markets, which gave e-commerce companies skyrocketing valuations, highlighted by Alibaba’s record-setting $25 billion initial public offering in September, which valued the China-based company at about $170 billion.
 
In other report findings:
 
• The Asia Pacific e-commerce market continues to grow — soon it will be the world’s largest region in terms of online sales — but many Asian countries declined in this year’s Index, with China, the previous leader, losing its top billing to the United States. Although China’s e-commerce market continues to expand, its rate of growth has slowed down. And a large part of its future growth will be driven by tier 3 and tier 4 cities, where there are questions about infrastructure investment, logistics support (a key to retail e-commerce growth), and consumer spending.
 
• In Europe, the United Kingdom (3rd), Germany (5th), and France (6th) all move up one spot in the Index, while Belgium (a 15-spot rise to 9th place), Denmark (up 13 spots to 15th) and Spain (entering the rankings in 18th) have posted impressive progress.
 
• In Latin America, while Mexico jumps into the rankings at 17th place, Brazil and Argentina fall steeply in the Index, due to their slowing macroeconomics. Fundamental infrastructure challenges – logistics and transportation in Brazil, government regulations in Argentina – may hinder e-commerce growth in the future.
 
• The report identifies four overarching themes that color this year’s Index findings as they relate to business strategy, customers, and channels: Internationalization; the rise of e-commerce IPOs; the continuously connected consumer; and the need for omnichannel strategies.
 
The top 10 countries in the Index were:
 
1. United States
2. China
3. United Kingdom
4. Japan
5. Germany
6. France
7. South Korea
8. Russia
9. Belgium
10. Australia
 
Click here to read the full 2015 Global Retail E-Commerce Report.
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99 Cents Only opens nine new California stores

BY Dan Berthiaume

CITY OF COMMERCE, Calif. — 99 Cents Only Stores is opening nine new stores in California between April 9 and April 11. The stores will be located in the communities of San Luis Obispo, Ontario, Sonora, Santee, Escondido, Tustin, San Bernardino, Cypress and South El Monte.
 
99 Cents Only currently operates 384 stores located in California, Texas, Arizona & Nevada.
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