By Shailaja Sharma and Sruthi Ramakrishnan
July 10 (Reuters) – Discount tradesman Family Dollar Stores
Inc, underneath vigour from romantic financier Carl Icahn to
sell itself, pronounced a distinction fell by a third as a company
cleared register forward of designed store closures and
Shares of a company, that also reported a third
straight quarterly decrease in same-store sales, were adult slightly
in late morning trade after descending as many as 2.6 percent.
Icahn, Family Dollar’s largest shareholder with a 9.4
percent stake, wants a association to sell itself to opposition Dollar
General Corp to assistance them cope with unbending competition
from big-box retailers such as Wal-Mart Stores Inc.
Icahn’s offer was thrown into doubt final month, however,
after Dollar General pronounced Chief Executive Rick Dreiling had
decided to retire subsequent year.
“Family Dollar continued to underperform in Q3, that we
believe adds serve faith to Carl Icahn’s avowal the
company should put itself adult for sale,” BBT Capital Markets
analyst Anthony Chukumba wrote in a note.
Dollar stores such as Family Dollar get many of their
business from low-income shoppers, many of whom are struggling
with diseased salary expansion and a cut in food stamp benefits.
But Family Dollar has underperformed a altogether sector,
largely since of a plan of progressing comparatively high
prices, Edward Jones researcher Brian Yarbrough told Reuters.
Family Dollar pronounced in Apr it would condense prices on 1,000
basic items, close 370 underperforming stores and delayed its
expansion skeleton to expostulate growth. The association pronounced on Thursday it
would start offered drink and booze from subsequent year.
“We consider they are going to have to reduce prices on
additional equipment and that’s going to import on distinction margins in
the foreseeable future,” Yarbrough said.
The association cut a full-year gain foresee for the
third time, to $3.07-$3.17 per share from $3.05-$3.25.
Analysts on normal approaching a distinction of $3.15 per share for
the year finale Aug. 30, according to Thomson Reuters I/B/E/S.
Net income for a third entertain fell 33 percent to $81.1
million, or 71 cents per share. Excluding items, earnings
amounted to 85 cents per share.
Net sales rose 3.3 percent to $2.66 billion, somewhat above
the normal researcher guess of $2.61 billion. Same-store sales
fell 1.8 percent.
Selling, ubiquitous and executive losses rose scarcely 9
percent to $767.04 million, in partial due to aloft marketing
Family Dollar’s shares were adult about 0.5 percent during $64.57
in late morning trade on a New York Stock Exchange.
(Reporting by Shailaja Sharma in Bangalore; Editing by Sriraj
Kalluvila and Ted Kerr)