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Earnings preview: Family Dollar continues to cash in on frugal consumers

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Family Dollar Stores Inc. (NYSE: FDO), the operator of the nation's number two dollar-store chain, is scheduled to discuss its fiscal third quarter 2009 results tomorrow morning in a conference call at 10:00 AM ET. You can catch the live webcast of the call on the company's website.

For the quarter in which Family Dollar saw a new global sourcing executive and declared a quarterly dividend, analysts surveyed by Thomson Reuters expect the North Carolina company to report that earnings rose 22.0% to $0.59 per share, a bit higher than Family Dollar's guidance. Revenue for the quarter is expected to be 8.3% higher to $1.8 billion. Earnings have met or topped estimates in the five past quarters.


For the full year, analysts are so far looking for $2.00 per share (+17%) on sales of $7.4 billion (6.3%). While Family Dollar has benefited from frugal consumers in recession mode, concerns going forward include whether that will continue when the economy improves.

The long-term EPS growth forecast is 12.2%, which is better than the retail industry average, and the forward PE ratio estimate is 13.0, the same as that of rival Dollar Tree Inc. (NASDAQ: DLTR). The consensus recommendation is to hold FDO, but Jim Cramer calls it the best in the sector.

After hitting a 52-week high of $35.00 in April, shares have fallen 19.8%, slipping below the 200-day moving average, to $27.77.

Visit AOL Money & Finance for more earnings coverage.

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Last updated: November 12, 2009: 01:19 PM

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