MATTHEWS, N.C., Oct. 1 /PRNewswire-FirstCall/ -- Family Dollar Stores,
Inc. (NYSE: FDO), a discount store chain operating 5,034 stores in 43 states,
reported that sales and earnings for the fourth quarter and for the fiscal
year ended August 30, 2003, were the highest in the Company's history. For
the fourth quarter ended August 30, 2003, sales were $1,208.5 million, or
14.2% above sales of $1,058.3 million for the fourth quarter ended
August 31, 2002. Net income was $47.7 million, or 13.8% above net income of
$41.9 million for the fourth quarter of the prior fiscal year, and net income
per diluted share increased to $.28 from $.24.
Sales for the fifty-two weeks in the fiscal year ended August 30, 2003,
were $4,750.2 million, or 14.1% above sales of $4,162.7 million for the fifty-
two weeks in the fiscal year ended August 31, 2002. Net income was
$247.5 million for fiscal 2003, or 14.1% above net income of $216.9 million
for fiscal 2002, and net income per diluted share increased to $1.43 from
$1.25.
The sales gains in the fourth quarter are attributable to increased sales
in existing stores and to sales from new stores opened as part of the
Company's store expansion program. Sales in existing stores increased
approximately 4.6% in the fourth quarter ended August 30, 2003, above the
comparable period last year, including increases of approximately 5.1% in
sales of hardlines and approximately 2.8% in sales of softlines. The customer
count, as measured by the number of register transactions in existing stores,
increased approximately 3.9%, and the average transaction increased
approximately 0.5% to $8.66.
Sales in existing stores for comparable fifty-two week periods increased
approximately 3.8%. This included increases of approximately 4.3% in sales of
hardlines and approximately 2.1% in sales of softlines. In fiscal 2003, the
customer count increased approximately 1.9% and the average transaction
increased approximately 1.6% to $8.87.
The increase in total sales also is attributable to sales from new stores.
During the fourth quarter ended August 30, 2003, 190 new stores opened and
2 stores closed. During the fiscal year, the Company opened 475 stores and
closed 64 stores. At the end of the fiscal year on August 30, 2003,
5,027 stores were operating in 43 states. New store performance continues to
improve, with sales in fiscal 2003 in new stores equal to approximately 96% of
the chain average store sales.
The operating results of the fourth quarter ended August 30, 2003, extend
Family Dollar's record of consistent strong performance in a difficult retail
sales environment. With the 13.8% increase in net income in the fourth
quarter, the Company has now reported 30 consecutive quarters of earnings
increases on a comparable quarter basis. The gross profit margin as a percent
to sales increased from 32.3% in the fourth quarter last year to 32.9% in the
fourth quarter this year. Improved margins on apparel and other seasonal
goods contributed to this increase. Expenses as a percent to sales increased
from 26.0% in the fourth quarter last year to 26.7% in the fourth quarter this
year. Above plan workers' compensation costs were the major cause of this
increase.
Approximately 30 basis points of the increase in the fourth quarter this
year in both the gross profit margin as a percent to sales and expenses as a
percent to sales is attributable to a change in the treatment of certain
vendor allowances in conformity with a recent accounting pronouncement. Some
allowances treated as a reduction of expenses in the fourth quarter of fiscal
2002 were treated as a reduction in the cost of merchandise in the fourth
quarter of fiscal 2003. This change had no significant impact on net income
in the fourth quarter and is not expected to significantly impact net income
in subsequent quarters.
As previously reported the Company's plan is for sales in existing stores
in the five week period ending October 4, 2003, to increase in the 3% to 5%
range. Through September 30, sales in existing stores are at the upper-end of
this range. The Company's plan for the first quarter ending
November 29, 2003, and the fiscal year ending August 28, 2004, is for sales in
existing stores to increase in the 4% to 6% range.
Assuming existing store sales increases in the 4% to 6% range, and with
additional sales being generated by the opening of new stores, the Company's
plan is for net income per share of Common Stock to increase approximately 14%
to 16% in fiscal 2004. The Company's plan also assumes that both the gross
profit margin and expenses as a percent to sales this fiscal year will
increase slightly from last fiscal year due primarily to the change in the
treatment of certain vendor allowances.
In commenting on fiscal 2003 and the Company's plans for fiscal 2004,
Howard R. Levine, Chairman and Chief Executive Officer, stated that: "In
fiscal 2003, Family Dollar reported record operating results while continuing
to reinvest in the business. The milestone opening of the 5,000th store was
but one of 475 new store openings. Supply chain enhancements included the
opening in Odessa, Texas, of our seventh Distribution Center and the continued
implementation of merchandise software systems to improve inventory
productivity. Cash dividends declared per share of Common Stock increased by
15% -- the 27th consecutive year of cash dividend increases. We also
repurchased 2.2 million shares of Common Stock at a cost of $65.9 million."
Mr. Levine concluded that: "Family Dollar's financial strength permits us
to make substantial investments in our Company's future. In fiscal 2004, with
expected capital expenditures of about $275 million, we plan to open
approximately 565 new stores, expand or relocate about 125 stores, close about
60 stores, begin construction of an eighth distribution center and continue to
make investments in our Associates and in technology. Initiatives in fiscal
2004 include store focused technology infrastructure investments to bring more
value and convenience to our customers. One immediate result is that
customers will be able to use debit cards in most stores by November 2003.
Through sound investments with a focus on customers our Company will continue
to gain market share and build upon its record of profitable growth.
Family Dollar will host a conference call on Wednesday, October 1, 2003,
at 10:00 A.M. ET to discuss the financial results for the fourth quarter and
year ended August 30, 2003. If you wish to listen, please call (334) 420-1230
at least 10 minutes before the call is scheduled to begin. A replay of the
call will be available from about 1:00 P.M. ET, October 1, 2003, through
October 3, 2003, by calling 703-925-2474 and entering the access code 3796064.
There also will be a live webcast of the conference call that can be accessed
at http://www.familydollar.com/investors.asp or by clicking on the webcast
icon on the "Investors" page at http://www.familydollar.com. A replay
of the webcast will be available at the same address after 2:00 P.M. ET,
October 1, 2003.
Certain statements contained in this press release which are not
historical facts are forward-looking statements made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements address the Company's plans and activities or
events which the Company expects will or may occur in the future. A number of
important factors could cause actual results to differ materially from those
expressed in any forward-looking statements. Such factors include, but are
not limited to, competitive factors and pricing pressures, general economic
conditions, the impact of acts of war or terrorism, changes in consumer demand
and product mix, unusual weather that may temporarily impact sales, inflation,
merchandise supply constraints, general transportation delays or
interruptions, dependence on imports, changes in currency exchange rates,
tariffs, quotas, and freight rates, availability of real estate, costs and
delays associated with building, opening and operating new distribution
facilities and stores, costs and potential problems associated with the
implementation of new systems and technology, including supply chain systems
and electronic commerce, changes in energy prices and the impact on consumer
spending and the Company's costs, legal proceedings and claims, changes in
health care and other insurance costs, and the effects of legislation on wage
levels and entitlement programs. Consequently, all of the forward-looking
statements made are qualified by these and other factors, risks and
uncertainties. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this release.
The Company does not undertake to publicly update or revise its forward-
looking statements even if experience or future changes make it clear that
projected results expressed or implied in such statements will not be
realized.
The figures are as follows:
(In thousands, except per share amounts)
Fourth Quarter Ended
August 30, 2003 August 31, 2002
Net Sales $1,208,474 $1,058,272
Cost of Sales 810,826 716,858
Gross Margin 397,648 341,414
Selling, General and
Administrative Expenses 322,566 275,439
Income Before Income Taxes 75,082 65,975
Income Taxes 27,405 24,081
Net Income 47,677 41,894
Net Income Per Common Share-Basic $.28 $.24
Average Shares-Basic 172,082 173,277
Net Income Per Common Share-Diluted $.28 $.24
Average Shares-Diluted 173,314 174,322
Dividends Declared Per Common Share $.07-1/2 $.06-1/2
Fiscal Year Ended
August 30, 2003 August 31, 2002
Net Sales $4,750,171 $4,162,652
Cost of Sales 3,145,788 2,766,733
Gross Margin 1,604,383 1,395,919
Selling, General and
Administrative Expenses 1,214,658 1,054,298
Income Before Income Taxes 389,725 341,621
Income Taxes 142,250 124,692
Net Income 247,475 216,929
Net Income Per Common Share-Basic $1.44 $1.26
Average Shares-Basic 172,346 172,800
Net Income Per Common Share-Diluted $1.43 $1.25
Average Shares-Diluted 173,354 174,049
Dividends Declared Per Common Share $.29 $.25-1/2
Consolidated Balance Sheets
(In thousands, except share amounts)
Fiscal Year Ended
August 30, 2003 August 31, 2002
ASSETS
Current assets:
Cash and cash equivalents $ 206,731 $ 220,265
Merchandise inventories 854,370 766,631
Deferred income taxes 61,769 49,941
Income tax refund receivable -- 6,469
Prepayments and other
current assets 33,622 12,553
Total current assets $1,156,492 $1,055,859
Property and equipment, net 812,123 685,617
Other assets 17,080 13,143
$1,985,695 $1,754,619
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 401,799 $ 381,164
Accrued liabilities 192,861 149,616
Income taxes payable 671 --
Total current liabilities 595,331 530,780
Deferred income taxes $ 79,395 $ 68,891
Commitments and contingencies
Shareholders' equity:
Preferred stock, $1 par;
authorized and unissued
500,000 shares
Common stock, $.10 par;
authorized 600,000,000
shares $ 18,691 $ 18,583
Capital in excess of par 87,457 63,294
Retained earnings 1,315,600 1,118,015
1,421,748 1,199,892
Less common stock held in
treasury, at cost 110,779 44,944
1,310,969 1,154,948
$1,985,695 $1,754,619
SOURCE Family Dollar Stores, Inc.
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http://www.familydollar.com
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Audio:http://www.familydollar.com/investors.asp
CONTACT:
George R. Mahoney, Jr., Executive Vice
President of Family Dollar Stores, Inc., +1-704-814-3252
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