Family Dollar Stores
Family Dollar, whose shares rose 3.2 percent, said it lured more shoppers who spent more per transaction, sending sales at its stores open at least year up by 3.6 percent during its second fiscal quarter.
The discounter, which sells most of its merchandise for $10 and less, said that momentum continued into March, with same-store sales rising 11 percent last month, due in part to good weather and an early Easter.
Family Dollar, whose core shoppers typically have household incomes of $40,000 or less, expects same-store sales to rise between 6 percent to 8 percent during the third quarter.
In February, the retailer said it expected to expand hours to most of its 6,600 stores by the end of that month, in a bid to boost earnings. It also said at the time it would beef up its sales of private label goods, which typically offer higher margins.
Chief Executive Howard Levine said he expected our continued efforts to broaden the appeal of our assortment would result in increased market share.
Family Dollar's gross margins rose 1.7 percentage points to 35.4 percent on fewer markdowns and lower inventory, which was 9.6 percent below levels of the year earlier.
Family Dollar reported net income of $112.2 million, or 81 cents a share, in the second quarter ended February 27, 2010, up 33 percent from $84.1 million, or 60 cents per share, a year earlier.
Analysts on average were expecting earnings of 78 cents a share, according to Thomson Reuters I/B/E/S.
Family Dollar forecast earnings of between 71 cents and 76 cents a share for the third quarter, above analyst expectations of 70 cents a share.
The discount retailer also raised its earnings view for 2010 to between $2.48 and $2.58 a share, above analysts' expectation of $2.47 a share.
Its shares were up $1.20 in premarket trading at $39.
(Reporting by Phil Wahba in New York; additional reporting by Shradhha Sharma in Bangalore; Editing by Vinu Pilakkott and Derek Caney)