Family Dollar’s Q3 net income drops 3%; announces merchandising changes

Matthews, N.C. -- Family Dollar reported lower net income in the third quarter of 2013 as its shoppers continue to hold off on discretionary spending.  The discounter also named Jason Reiser to the position of senior VP merchandising.

Family Dollar posted net income of $120.9 million, down 3% from $124.5 million in the year-ago period. Its results, however, topped expectations.

Sales rose 9% to $2.57 billion. Same-store sales increased 2.9% as a result of higher customer transaction totals and traffic volumes.

Family Dollar chairman and CEO Howard R. Levine said the company is doing well in the face of economic challenges for its customers and will adapt to expected continuing fiscal difficulties for consumers.

“Our consumables sales remained strong and we continued to gain market share,” Levine said. “However, our discretionary sales remained challenged as our customers have been forced to make spending choices between basic needs and wants. Consistent with market trends, we expect that our customers will continue to face financial headwinds. We are adapting accordingly, and we are focused on stabilizing gross margin, controlling expenses, improving inventory productivity, and driving greater operational efficiencies.”

For fourth quarter 2013, Family Dollar expects same store sales to increase 2%. For fiscal year 2013, the retailer anticipates an increase in same-store sales of between 3% and 4% and approximately 500 new store openings and 30-50 store closings. During the third quarter, the company opened 129 new stores, closed three stores, and renovated, relocated or expanded 228 stores.

As senior VP merchandising, Reiser will replace John Scanlon, who retired from the company at the end of March. Reiser comes to Family Dollar from Sam’s Club, where he spent more than 17 years in a variety of roles, most recently serving as VP merchandising, health and family care.

In addition, Paul G. White, executive VP, chief merchandising officer, has left the company to pursue other interests. Michael K. Bloom, president and COO, will assume executive responsibility for merchandising while Family Dollar searches for a permanent replacement.


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