Family Dollar tanks as costs hurt profit
The discount chain's stock falls after a disappointing first-quarter earnings report.
By Jeanine Poggi, TheStreet
During the quarter, the company earned $74.3 million, or 58 cents a share, from $67.8 million, or 49 cents, in the year-ago period. Analysts were calling for a profit of 61 cents a share. By early afternoon, shares had fallen 8.5% to $45.12.
Family Dollar chairman Howard R. Levine said the company had its best first-quarter sales performance in more than 12 years. However, lower gross margins and higher freight costs hurt its profit. Its gross margin slipped to 36% from 36.1%.
Family Dollar revenue rose 10% to $2 billion, while same-store sales grew 6.9%, reflecting a boost from candy and food sales.
Family Dollar expects full-year earnings in the range of $3.08 to $3.23 a share, in line with forecasts of $3.18. For the second quarter, the company is calling for a profit of between 92 and 97 cents a share, shy of analysts' predictions of $1 a share.
Copyright © 2014 Microsoft. All rights reserved.
The new restaurant, the first of which will open this summer, features premium tacos, fries, craft beer and wine.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.