Shares of Family Dollar (NYSE: FDO) are up more than one percent following its third-quarter earnings release.
Below are some highlights and key takeaways from the company's conference call.
Growth:
• Our core low income customers continue to deal with elevated unemployment levels, cuts the government benefits, and volatility in energy prices, and they are tightly managing their spending as a result.
• Although our product financial performance remains below our expectations, we are making progress.
• Our team is focused and we are working hard and we are starting to see trends stabilize in critical areas.
• Store manager turnover levels have improved dramatically, and inventory levels have stabilized.
• Which should result in improvements in profitability and inventory turns as we move into fiscal 2015.
• We're investing more than $50 million on an annualized basis to lower prices on nearly 1,000 SKUs to make us more competitive.
• Although we are making progress to improve critical performance metrics, we are still very early on in our turnaround.
• We are executing these near-term initiatives to improve our performance.
• Giving the competitive and economic environment over the last couple of years, we continue to introduce new traffic-driving categories.
• We plan to begin a multi-year rollout of beer and wine.
• We will have a limited number of stores selling beer and wine by the end of 2014 and plan to accelerate the rollout in fiscal 2015.
• Our new pallet delivery program is an important investment to help us improve the long-term efficiency of our supply chain, simplify store processes, and increase work force retention.
Results:
• We expect growth to be a more modest 5 percent to 6 percent in the fourth quarter.
• Total sales increased 3.3 percent to $2.7 billion, and comparable store sales decreased 1.8 percent.
• We have approximately 200 stores in the closing process and discussions and negotiations with the landlord are going very well.
• We will deliver $40 million to $45 million in annualized operating profit.
• Effective income tax rate in the third quarter of fiscal 2014 was 33.1% as compared to 36.2%.
• We opened 111 new stores compared to 129 openings in the third quarter last year.
See more from Benzinga
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.