US discount retailer Family Dollar Stores has lifted its earnings outlook for its second quarter after sales increased by 8.3% during the period.
The company said that sales for the three months to 26 February increased to US$2.26bn, up from $2.09bn last year. Family Dollar also booked a 5.1% jump in identical sales generated at stores open at least a year or more. Year-to-date same-store sales were up 6%, the group added.
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“Family Dollar continues to execute well against our strategic plan to accelerate revenue growth, expand operating margins and optimise our capital structure,” said chairman and CEO Howard Levine today (14 March). “Our investments to improve the shopping experience for our customers while enhancing our operational capabilities continue to deliver strong returns.”
The company said that it now expects second-quarter EPS to fall in a range of $0.97-98, up from $0.81 per diluted share for the second quarter of fiscal 2010 and a previous guidance range of $0.92-97.
Family Dollar’s board recently rejected a $7.8bn takeover approach from Nelson Pelz’s investment fund Trian Group. The retailer’s board argued that the offer undervalued Family Dollar and adopted a so-called “poison pill” that would flood the market with shares if any one investor amounted a stake greater than 10%.
In a statement to the US securities regulator this morning, Trian called on Family Dollar to drop the shareholder rights plan, insisting that it reflects the company’s “poor corporate governance”.
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