For the second quarter of fiscal 2015 ended February 28, 2015, net income per diluted share slipped 16 per cent year over year at NYSE listed Family Dollar Stores.
In the second quarter of fiscal 2015, Family Dollar reported net income per diluted share of $0.67 compared to $0.80 in the second quarter of fiscal 2014 ended March 1, 2014.
“Excluding fees related to the pending merger with Dollar Tree, second quarter fiscal 2015 net income per diluted share was $0.74,” it said in a press release.
Total net sales in the reporting quarter increased 3.0 per cent to $2.80 billion from $2.72 billion in the prior fiscal quarter.
Comparable store sales for the 13-week period rose slower by 0.5 per cent as a result of an increase in customer transaction numbers, offset by a decrease in the average customer transaction value.
Gross profit for the second quarter of fiscal 2015 climbed to $931.1 million, or 33.3 per cent of net sales, as against $902.3 million, or 33.2 per cent of net sales in the same quarter of fiscal 2014.
“As a percentage of sales, the benefit of lower markdowns was partially offset by increased sales of lower-margin consumables,” the retailer added.
SG&A expenses in the second quarter of fiscal 2015 were $805.3 million, or 28.8 per cent of sales, up from $762.0 million or 28.1 per cent of sales in the corresponding quarter of previous fiscal year.
“The increase in SG&A, as a percentage of net sales, was primarily a result of higher store occupancy costs, higher store payroll expense, and higher insurance expense,” Family Dollar informed.
“The impact of these increases was partially offset by lower corporate payroll in the second quarter of fiscal 2015 as compared to the second quarter of fiscal 2014,” it further added.
Operating profit for the second quarter reached $117.5 million or 4.2 per cent of sales. In the same quarter, it incurred $8.2 million in expenses related to its pending merger with Dollar Tree.
Excluding these merger expenses, adjusted operating profit in the quarter under review touched $125.8 million, or 4.5 per cent of sales as compared to $140.3 million, or 5.2 per cent of sales, in the prior fiscal quarter.
The effective tax rate in the second quarter of fiscal 2015 was 35.1 per cent as against 35.3 per cent in the second quarter of fiscal 2014.
Adjusted net income for the second quarter of fiscal 2015 stood at $84.9 million, excluding fees related to the pending merger with Dollar Tree, compared with $90.9 million in the second quarter of fiscal 2014.
The Company’s merchandise inventories at February 28, 2015, increased 3.5 per cent to $1.72 billion from $1.66 billion at March 1, 2014.
Average inventory per store at the end of the second quarter of fiscal 2015 was approximately 3% higher than the average inventory per store at the end of the second quarter of fiscal 2014.
According to Family Dollar, the increase in average inventory per store was primarily the result of the Company’s expanded assortment of tobacco and food.
