In the first quarter of fiscal 2015 ended November 29, 2014, net sales rose 2.3 per cent to $2.56 billion from $2.50 billion in the first quarter of fiscal 2014 at US based retailer, Family Dollar.
Comparable store sales for the 13-week period however dipped 0.4 per cent, as a result of marginal decline in both the average customer transaction value and the number of customer transactions.
Segment wise, net sales of Consumables increased 3.5 per cent in the first quarter of fiscal 2015 and represented 75.8 per cent of total net sales, compared to 74.9 per cent in the first quarter of fiscal 2014.
Net sales of Discretionary categories, which include apparel and accessories, home products, etc, decreased 1.3 per cent to 24.2 per cent of total sales as against 25.1 per cent in the prior year quarter.
Gross profit for the reporting quarter was $852.9 million, or 33.4 per cent of net sales, compared to $856.8 million, or 34.3 per cent of net sales in the same quarter of earlier fiscal year.
“As a percentage of sales, the impact of lower markups and stronger sales of lower-margin consumables was partially offset by lower markdowns,” Family Dollar said.
SG&A expenses in the quarter under review stood at $773.4 million, or 30.3 per cent of sales, as compared to $736.5 million, or 29.5 per cent of sales, in the corresponding quarter of fiscal 2014.
According to the retailer, the increase in SG&A, as a percentage of net sales, was primarily a result of higher occupancy costs, including rent, depreciation, property taxes, and utilities.
For the first quarter of fiscal 2015, operating profit was $70.7 million or 2.8 per cent of sales.
In the first quarter of fiscal 2015, the Company incurred $8.9 million in expenses related to the Company’s pending merger with Dollar Tree.
Excluding these merger expenses, adjusted operating profit reached $79.5 million, or 3.1 per cent of sales, as against $120.3 million, or 4.8 per cent of sales.
The effective tax rate in the first quarter of fiscal 2015 was 41.7 percent as against 35.4 per cent in the first quarter of fiscal 2014.
The increase in the effective tax rate was primarily due to non-deductible expenses associated with the pending merger with Dollar Tree and lower federal job tax credits.
Various federal jobs tax credit programs expired at the end of 2013 but were retroactively reinstated in December 2014.
Excluding the impact of the merger fees, the effective income tax rate in the first quarter of fiscal 2015 was 37.1 per cent
Net income in the reporting quarter totaled to $41.4 million from $78.0 million in the first quarter of fiscal 2014.
Adjusted net income for the first quarter of fiscal 2015 was $50.2 million, excluding fees related to the Company’s pending merger with Dollar Tree. (AR)
