Discount retailer Family Dollar Stores Inc. (FDO) posted a better-than-expected profit jump during the fourth quarter as it continues to lure budget-conscious shoppers into its stores.
For the fourth quarter of fiscal 2010, the company posted net sales of $1.957 billion, an 8% increase from a year earlier, the company said in a statement. Net income rose 23% or $74 million, compared with $60.1 million from a year earlier. For the year, Family Dollar reported earnings of $2.62 per share for fiscal 2010, compared with $2.07 per share in fiscal 2009.
For the year ended Aug. 28, sales were $7.867 billion, 6.3% higher than a year earlier. Comparable store sales rose 4.8%, driven by a greater volume of transactions.
"Our efforts to broaden the appeal of our assortment, improve the in-store shopping experience, enhance our customer communications, and strengthen our employee teams, resulted in strong improvements across most key metrics," said CEO Howard Levine.
Looking ahead, Family Dollar forecast earnings between $2.95 and $3.15 per share for fiscal 2011, with net sales rising as much as 10%. The company also announced plans to purchase $750 million of its common stock.
Shares of Family Dollar rose 3.8% in premarket trading.