Continue reading The buck stops at Dollar General

The buck stops at Dollar General originally appeared on BloggingStocks on Thu, 10 Dec 2009 15:20:00 EST. Please see our terms for use of feeds.

Dollar Tree (NASDAQ: DLTR) saw a nice increase in its bottom-line profit. The retailer, which reported earnings for the first quarter earlier this week, said it made 66 cents per share, good for an increase of more than 37%. Revenues increased 14%, and same-store sales went up a whopping 9%. So many retailers would absolutely kill to have that same-store number.

It's no secret why Dollar Tree is thriving. Bad economy plus items-that-sell-for-a-dollar-each equals retail success. Brand equity is important. So is convenience. But a cheap price point oftentimes trumps all.

Continue reading Dollar Tree sells cheap items, but it has rich quarter

Dollar Tree sells cheap items, but it has rich quarter originally appeared on BloggingStocks on Fri, 29 May 2009 09:20:00 EST. Please see our terms for use of feeds.

The New York Times reports that dollar stores are thriving as consumers look to pinch pennies: "The nation's dollar stores, those once-dowdy chains that lured shoppers by selling some or all of their merchandise for $1, are suddenly hot. They are busily opening new stores, outfitting existing stores with refrigerators and freezers, and sprucing up their aisles with better lighting, fresh paint and new signs."

Shares of Dollar Tree Inc. (NASDAQ: DLTR) have been strong performers as the company's same-store sales numbers have been terrific and the company plans ambitious new store opening plans. KKR's $7.3 billion acquisition of Dollar General in March of 2007 looks like one of the few good buyout deals to have come at the peak of that boom.

Continue reading Dollar stores thrive in tough times, but is it too late to buy in?

Dollar stores thrive in tough times, but is it too late to buy in? originally appeared on BloggingStocks on Sat, 02 May 2009 12:40:00 EST. Please see our terms for use of feeds.

It comes as no surprise that the top performer among the stocks comprising the S&P 500 Index is a retailer focused on delivering quality products and services at a discount price.

Family Dollar Stores (NYSE: FDO) increased nearly 30% in 2008, compared with a decrease of 40% in the S&P 500.

Defying the expectations of gloomy analysts who are paralyzed by their inability to value companies during the last 12 months, and by short sellers who perceived a price drop following the high level performance in 2008, the stock is continuing its climb as we enter the 2009 trading year.

Family Dollar reported first quarter earnings Wednesday, which exceeded analysts' expectations and company projections.

Earnings for the period were up by 14%, with revenue increasing by 4.2% and same-store sales up a healthy 2.1%. Market reaction to the report is stunning, with FDO up more than 14% at the close.

Family Dollar CEO Howard Levine, son of founder and Chairman Emeritus Leon Levine, issued a forecast of continued growth for the next quarter and for all of 2009.

The company is now projecting earnings of $1.63 to $1.81 per share for fiscal year 2009. Earlier forecasts were in the range of $1.58 to $1.78. Projections of same-store sales growth for the year were also increased from a range of 1%-3% to 2%-4%.

FDO combines conservative leadership with a consumer-friendly neighborhood store environment, and a product mix appealing to cost-conscious consumers to deliver value and a positive shopping experience. With minimal exposure to price-volatile electronic and apparel inventory, company performance is not likely to be adversely affected by a prolonged economic downturn.

FDO has more than 6,000 locations in 44 contiguous states. The company has effectively managed its rapid growth during the last five years, having opened more than half of its stores during this period.

Continue reading Family Dollar comes out on top

Family Dollar comes out on top originally appeared on BloggingStocks on Thu, 08 Jan 2009 11:56:00 EST. Please see our terms for use of feeds.

99 Cents Only raises prices -- still under $1, sort of originally appeared on BloggingStocks on Tue, 09 Sep 2008 10:15:00 EST. Please see our terms for use of feeds.

Tom Petruno at the Los Angeles Times makes a strong case [registration required] for strength in companies catering to working-class folks as opposed to hedge funds managers and Hollywood types. The trend has been in the opposite direction in recent years. Consider this: "On Wall Street, Coach Inc. (NYSE: COH) versus Wal-Mart Stores Inc. (NYSE: WMT) hasn't been much of a contest since 2000. The high-end leather goods maker's stock price is up 1,326% since then; shares of Wal-Mart, the retailer to the masses, are down 9% in the period."

But here's what's changed. Wages are rising: "Average weekly earnings of U.S. production workers rose 4.4% in the 12 months through March, according to the Labor Department. That was up from a 3.8% increase in the 12 months ended in March 2006 and a mere 2.6% in the period before that." Worker incomes rose 1.1% in the first quarter, the largest such rise in six years.

At the same time, growth in corporate profits is slowing. So if you decide to go with the hypothesis of working- and middle-income people having more money to spend, here are two stock picks:

Continue reading Time to load up on blue collar stocks?

Time to load up on blue collar stocks? originally appeared on BloggingStocks on Mon, 30 Apr 2007 11:43:00 EST. Please see our terms for use of feeds.

According to the Wall Street Journal, discount/single-price point stores like Family Dollar Stores Inc. (NYSE: FDO), Dollar Tree Stores Inc. (NASDAQ: DLTR), and the soon to be KKR owned Dollar General Corp. (NYSE: DG) are growing in popularity [subscription required] with consumers, reporting solid same-store sales growth and expanding sales of food products. According to Family Dollar CEO Howard Levine, "The low-income customer is always stressed and always strained. When things like a minimum-wage increase happen, that's a great benefit to them. When gas prices come down, that's a great benefit to them, and conversely when they go the other way, that has a negative impact."

Because of sky-high real estate prices in my area, we have no dollar stores. There used to be one in a local mall but it got replaced by a jeweler. I'm not kidding. However, anytime I'm traveling, I go to a dollar store, not because I'm "always stressed and always strained," but because it's fun. I was recently driving with my brother and we passed a Family Dollar and I practically ordered him to turn the car around. He reluctantly agreed with only this protest: "You are such a loser."

Continue reading Dollar stores flourish because they're fun

Dollar stores flourish because they're fun originally appeared on BloggingStocks on Thu, 05 Apr 2007 14:29:00 EST. Please see our terms for use of feeds.