Tag Archives: Dollar General

Midday Report: Family Dollar Reports Miserly Q1 Earnings

By DailyFinance Staff

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Family Dollar (FDO) says its quarterly earnings rose by less than three percent, falling shy of Wall Street expectations.

But the company had plenty of excuses for the shortfall: It blames the economy, the weather, and the delay in tax refunds earlier this year.

And Family Dollar doesn’t see things getting a whole lot better. It revised its earnings forecast for 2013 significantly lower for the second time this year.

But not everything is bleak. Sales rose by 18 percent in the latest quarter, meeting expectations, as the company continued to add stores at a rapid pace. It opened 500 new locations last year and is expected to add that many again this year. It now has more than 7,000 stores. And the sale trend improved in February as customers began to receive their tax refund checks.

But analysts say there are bigger trends working against Family Dollar and its main rivals – Dollar General (DG) and Dollar Tree (DLTR). The biggest factor is that Walmart (WMT) has stepped up its competition to win the dollars of hard-pressed shoppers by lowering prices.

Family Dollar is trying to make itself a one-stop destination by adding cigarettes, Pepsi (PEP) products, gift cards and magazines. This strategy may draw more customers into its stores, but these are generally very low margin products compared to apparel and other items – and that has pressured profitability.

That’s in contrast to what happened in recent years, during and right after the recession. Sales and earnings soared as low-income shoppers flocked to dollar stores.

Family Dollar has also underperformed on Wall Street. So far this year, its stock is down seven percent. By comparison, both Dollar General and Dollar Tree have gained 15 percent this year.

It was just over a year ago that Family Dollar rejected a $7 billion buyout offer from Trian Group, the firm run by activist investor Nelson Peltz.

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Source: FULL ARTICLE at DailyFinance

Family Dollar Earnings: An Early Look

By Dan Caplinger, The Motley Fool

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Spring is finally here, and a new earnings season is right around the corner. On Wednesday, Family Dollar will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed, knee-jerk reaction to news that turns out to be exactly the wrong move.

The deep-discount industry has seen huge growth in recent years, as a sluggish economic recovery has left millions of Americans behind, struggling to make ends meet. Yet highly competitive conditions in the industry have left Family Dollar fighting with a number of peers for market share. Let’s take an early look at what’s been happening with Family Dollar over the past quarter and what we’re likely to see in its quarterly report on Wednesday.

Stats on Family Dollar

 

 

Analyst EPS Estimate

$1.23

Change From Year-Ago EPS

7%

Revenue Estimate

$2.89 billion

Change From Year-Ago Revenue

17.6%

Earnings Beats in Past 4 Quarters

1

Source: Yahoo! Finance.

Is Family Dollar’s stock its best bargain?
Analysts have gotten more pessimistic about Family Dollar‘s earnings in recent months, as they’ve cut their estimates on the just-ended quarter by $0.04 per share and notched $0.09 off full-year fiscal 2013 earnings-per-share figures. The stock has reflected that dour view, dropping 6% since the beginning of the year.

After years of strength, Family Dollar has recently found itself on shakier ground. The same slow economic conditions that led to its strong performance during the 2008 recession continue to exist today, but now, even deep-discount retailers have proven vulnerable to tough times among its customers.

In particular, a combination of rising payroll taxes, higher prices at the pump, and weak employment growth has held spending back among lower-income shoppers. Wal-Mart‘s tepid 1% rise in same-store sales in the U.S. might have been good news for Family Dollar in years past, but Family Dollar‘s move toward more food items has put margins under pressure, and the stock hasn’t responded favorably.

Perhaps most troubling for Family Dollar are the moves that its competitors are making. Dollar General has done its best to hold off rising competition by aggressively expanding, with plans to open 635 new stores this year. The move could hurt short-term margins, but it throws down the gauntlet for Family Dollar to keep up the pace. Meanwhile, Dollar Tree reported surprisingly strong results in its most recent quarter as its cost-cutting bore fruit for investors.

In Family Dollar‘s quarterly report, watch for the company to address how it plans to respond to Dollar General‘s aggressive expansion plans. In this increasingly dog-eat-dog industry, Family Dollar can’t afford to let its rivals get too far ahead if it wants to retain its leadership …read more

Source: FULL ARTICLE at DailyFinance

Has Dollar General Become the Perfect Stock?

By Dan Caplinger, The Motley Fool

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Every investor would love to stumble upon the perfect stock. But will you ever really find a stock that provides everything you could possibly want?

One thing’s for sure: You’ll never discover truly great investments unless you actively look for them. Let’s discuss the ideal qualities of a perfect stock and then decide whether Dollar General fits the bill.

The quest for perfection
Stocks that look great based on one factor may prove horrible elsewhere, making due diligence a crucial part of your investing research. The best stocks excel in many different areas, including these important factors:

  • Growth. Expanding businesses show healthy revenue growth. While past growth is no guarantee that revenue will keep rising, it’s certainly a better sign than a stagnant top line.
  • Margins. Higher sales mean nothing if a company can’t produce profits from them. Strong margins ensure that company can turn revenue into profit.
  • Balance sheet. At debt-laden companies, banks and bondholders compete with shareholders for management’s attention. Companies with strong balance sheets don’t have to worry about the distraction of debt.
  • Moneymaking opportunities. Return on equity helps measure how well a company is finding opportunities to turn its resources into profitable business endeavors.
  • Valuation. You can’t afford to pay too much for even the best companies. By using normalized figures, you can see how a stock‘s simple earnings multiple fits into a longer-term context.
  • Dividends. For tangible proof of profits, a check to shareholders every three months can’t be beat. Companies with solid dividends and strong commitments to increasing payouts treat shareholders well.

With those factors in mind, let’s take a closer look at Dollar General.

Factor

What We Want to See

Actual

Pass or Fail?

Growth

5-year annual revenue growth > 15%

11%

Fail

 

1-year revenue growth > 12%

8.2%

Fail

Margins

Gross margin > 35%

31.7%

Fail

 

Net margin > 15%

5.9%

Fail

Balance sheet

Debt to equity < 50%

55.7%

Fail

 

Current ratio > 1.3

1.54

Pass

Opportunities

Return on equity > 15%

19.7%

Pass

Valuation

Normalized P/E < 20

17.69

Pass

Dividends

Current yield > 2%

0%

Fail

 

5-year dividend growth > 10%

0%

Fail

       
 

Total score

 

3 out of 10

Source: S&P Capital IQ. Total score = number of passes.

Since we looked at Dollar General last year, the company has given back one of the two points it gained from 2011 to 2012. The stock has held its own fairly well, rising between 5% and 10% over the past year.

The low end of the retail chain has been a good place for many companies lately, as continued worries about the strength of the economic recovery …read more
Source: FULL ARTICLE at DailyFinance

Dow Falls on Cyprus Head Fakes

By Jeremy Bowman, The Motley Fool

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Stocks were down again on news from Cyprus today. After starting the day in positive territory, the Dow Jones Industrial Average fell on comments from a eurozone finance minister and finished down 64 points, or 0.4%. Earlier in the day, the Dow set a new intraday record, while the S&P 500 came within a point of its all-time closing high.

The Dow headed south around 10:20 a.m., when Jeroen Dijsselbloem, the head of the Eurogroup of eurozone finance ministers, said that in the future investors in failing banks will be on the hook if the banks go under. However, Dijsselbloem revised his statement later in the day, seemingly walking back on comments about the Cyprus rescue package being used as a template for other debt-ridden nations. The Cyprus bailout appears to mark the end of the “Get Out of Jail Free” cards for profligate eurozone countries. Still, the mixed reactions indicate that the final verdict on the $13 billion package has not yet been rendered.

Bank of America was the worst performer on the Dow today, falling 1.3% in reaction to the Cyprus news. Despite its efforts to shore up its balance sheet, B of A remains more precarious than many of the other “too big to fail” banks, and concerns about the eurozone crisis or depositors having their money confiscated is likely to hurt B of A more than its peers.

Wal-Mart , meanwhile, was the biggest gainer out of the blue chips, as it’s largely unaffected by the financial shenanigans in the Mediterranean. The world’s biggest retailer also seemed to benefit from Dollar General reporting stronger-than-expected earnings today. Those results likely helped dispel any concerns about the effect of the payroll tax on shoppers or Wal-Mart’s own admission in a leaked memo that February sales were extraordinarily slow.

Outside the Dow, Dell was stirring up excitement once again as it appears founder Michael Dell isn’t the only one with eyes for his company. Activist investor Carl Icahn said today he’s in preliminary talks with private equity giant Blackstone Group about buying out the company. Icahn offered to pay $15 a share for the PC maker while Blackstone would cough up at least $14.25, which beats the price the Michael Dell-led team would pay at $13.65. Dell shares finished the session up 2.6% to close at $14.51.

Bank of America’s stock doubled in 2012. Is there more yet to come? With significant challenges still ahead, it’s critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool’s premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, Financials bureau chief, lift the veil on the bank’s operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.

…read more
Source: FULL ARTICLE at DailyFinance

Dollar General Posts Record Quarterly, Annual Results

By Eric Volkman, The Motley Fool

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Dollar General results for both Q4 and 2012 notched record highs in several categories. For the quarter, the company set a new peak in its top line, which came in at $4.21 billion. This was a bit above the $4.19 billion of the same quarter the previous year. Net profit also hit an all-time high at $317 million ($0.97 per diluted share), an improvement over the $293 million ($0.85) of Q4 2011.

The most recent quarter’s EPS number topped expectations, although the market anticipated a higher top line. On average, analysts projected $4.26 billion in sales and EPS of $0.90.

For the full year, net sales climbed 8% on an annual basis to an all-time high of just over $16 billion. Net profit recorded another new peak at $953 million ($2.85 diluted EPS), or 24% above 2011’s figure of $767 million ($2.22).

Dollar General also provided guidance for its fiscal 2013. The company believes its sales will increase 10%-12% on a year-over-year basis, and its adjusted EPS will come in at $3.15-$3.30.

The article Dollar General Posts Record Quarterly, Annual Results originally appeared on Fool.com.

Fool contributor Eric Volkman has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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Source: FULL ARTICLE at DailyFinance

Dow May Open Higher Following Cyprus Deal

By Roland Head, The Motley Fool

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LONDON — Stock index futures at 7 a.m. EDT indicate that the Dow Jones Industrial Average may open 0.28% higher this morning, while the S&P 500 may open up by 0.42%.

Stocks may move higher this morning following news that a bailout deal has been agreed for Cyprus that should prevent the country from being forced into a disorderly default and possible euro exit. Cyprus will receive 10 billion euros in aid from the European Union, and all bank depositors with less than 100,000 euros in savings will be protected from losses, in line with the country’s deposit guarantee scheme. The Bank of Cyprus will take over “good” assets from the Cyprus Popular Bank, which will be shut down. Bondholders and savers with more than 100,000 euros in accounts at both banks will see heavy losses, and the plan will see the country’s financial sector shrink dramatically. Strict capital controls have been put in place that will prevent savers from withdrawing their funds from Cypriot banks, which remain closed today for a scheduled bank holiday but are expected to open later this week.

European stock markets rose following this news, and London’s FTSE 100 was 0.93% higher by 7:30 a.m. EDT, helped by a 3.2% rise for telecom group Vodafone, which rose on renewed speculation that it is moving closer to a deal to sell its share of Verizon Wireless to Verizon later this year.

In U.S. corporate news today, Dollar General reported fourth-quarter earnings this morning. The company earned $0.97 per share on revenue of $4.21 billion, topping analyst estimates of $0.90 in EPS and $4.26 billion in sales. Meanwhile, education company Apollo Group beat on the top and bottom lines this morning, reporting second-quarter EPS of $0.34 (excluding items) on revenue of $834.4 million versus estimates of $0.18 and $822.8 million, respectively.

Dell may also return to the spotlight this morning following reports that the company is evaluating bids from both Blackstone Group and Carl Icahn, who both place a higher value on the company’s shares than founder Michael Dell‘s private-equity-backed bid. BlackBerry stock is also likely to see further active trading today: The company’s share price fell by almost 8% on Friday after it failed to impress investors with the U.S. launch of the its new Z10 smartphone. BlackBerry’s shares fell by a further 5.9% in German trading this morning, suggesting that its sell-off may continue when U.S. markets open.

Finally, let’s not forget the Dow’s daily movements can add up to some serious long-term gains. Indeed, Warren Buffett recently wrote, “The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions.” If you, like Buffett, are convinced about the long-term power of the Dow, you should read “5 Stocks To Retire On.” Your long-term wealth could be transformed, even in this uncertain economy. Simply click here now to download this free, no-obligation …read more
Source: FULL ARTICLE at DailyFinance

Dollar General Earnings: An Early Look

By Dan Caplinger, The Motley Fool

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Earnings season is just about over, with almost all companies already having reported their quarterly results. But there are still a few companies left to report, and Dollar General is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed kneejerk reaction to news that turns out to be exactly the wrong move.

Dollar General has been one of the biggest beneficiaries of the deep-discount movement in recent years, as the sluggish economic recovery and inequal distribution of wealth in the U.S. have combined to make this niche more lucrative. Let’s take an early look at what’s been happening with Dollar General over the past quarter, and what we’re likely to see in its quarterly report on Monday.

Stats on Dollar General

 

 

Analyst EPS Estimate

$0.90

Year-Ago EPS

3.4%

Revenue Estimate

$4.26 billion

Change From Year-Ago Revenue

1.8%

Earnings Beats in Past 4 Quarters

4

Source: Yahoo! Finance.

Will Dollar General keep impressing investors this quarter?
Over the past few months, analysts have stayed pretty solid in their views on Dollar General. They haven’t budged on their calls for the most-recent quarter, although they have knocked a couple of pennies off their full-year fiscal 2014 earnings-per-share consensus. The stock hasn’t missed a beat, rising about 14% since mid-December.

For years, Dollar General saw huge growth in the face of consumers needing to spend less in tough economic times. But, more recently, the deep-discount sector hasn’t had as easy of a time taking away market share from pricier competitors. Rival Dollar Tree managed to beat analyst expectations over the holiday quarter on a 2.4% increase in same-store sales, but its guidance for 2013 wasn’t as strong as analysts had hoped to see.

In response, Dollar General has aggressively expanded, becoming the largest of the dollar-store chains, and announcing plans to open another 635 new stores this year. In addition, it has joined Family Dollar in offering more food items, even though Family Dollar recently reported that higher food sales resulted in lower margins, hurting its overall results.

The big question is whether the reimposition of the full payroll withholding tax, which hits low-income consumers especially hard, will have a lasting impact on Dollar General. Retail giants Wal-Mart and Target have had lackluster results that many blame on higher taxes and delayed tax refunds, so if Dollar General manages to poach business from its larger competitors’ customer base as a result, this quarter should look promising.

In its quarterly report, watch Dollar General not just for overall results, but also the mix of its sales. To stay successful, Dollar General has to establish two things: that …read more
Source: FULL ARTICLE at DailyFinance

Dollar General, in the Spotlight Soon

By Seth Jayson, The Motley Fool

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Dollar General (NYS: DG) is expected to report Q4 earnings on March 25. Here’s what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Dollar General‘s revenues will grow 1.8% and EPS will grow 3.4%.

The average estimate for revenue is $4.26 billion. On the bottom line, the average EPS estimate is $0.90.

Revenue details
Last quarter, Dollar General notched revenue of $3.96 billion. GAAP reported sales were 10% higher than the prior-year quarter’s $3.60 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Last quarter, non-GAAP EPS came in at $0.63. GAAP EPS of $0.62 for Q3 were 24% higher than the prior-year quarter’s $0.50 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Recent performance
For the preceding quarter, gross margin was 30.9%, 10 basis points worse than the prior-year quarter. Operating margin was 9.1%, 50 basis points better than the prior-year quarter. Net margin was 5.2%, 40 basis points better than the prior-year quarter.

Looking ahead

The full year’s average estimate for revenue is $16.07 billion. The average EPS estimate is $2.84.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 204 members out of 232 rating the stock outperform, and 28 members rating it underperform. Among 42 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 34 give Dollar General a green thumbs-up, and eight give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Dollar General is outperform, with an average price target of $61.20.

Looking for alternatives to Dollar General? It takes more than great companies to build a fortune for the future. Learn the basic financial habits of millionaires next door and get focused stock ideas in our free report, “3 Stocks That Will Help You Retire Rich.” Click here for instant access to this free report.

The article Dollar General, in the Spotlight Soon originally appeared on Fool.com.


Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of
Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of …read more
Source: FULL ARTICLE at DailyFinance

Here's What This $4 Billion Hedge Fund Has Been Buying

By Selena Maranjian, The Motley Fool

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Every quarter, many money managers have to disclose what they’ve bought and sold, via “13F” filings. Their latest moves can shine a bright light on smart stock picks.

Today let’s look at Farallon Capital Management, founded by Thomas Steyer in 1986, and employing a bottom-up fundamental investing strategy.

The company’s reportable stock portfolio totaled $4.3 billion in value as of December 31, 2012.

Interesting developments
So what does Farallon’s latest quarterly 13F filing tell us? Here are a few interesting details:

The biggest new holdings are Dollar General and EMC. Other new holdings of interest include Dynavax Technologies and Freeport McMoRan Copper & Gold . Dynavax has likely hurt the Farallon portfolio, dropping sharply upon an FDA rejection of its hepatitis B vaccine Heplisav. The FDA left open the possibility of a more limited approval, but Dynavax now has more work to do, and it’s burning through cash, while its revenue has been shrinking. Fortunately, it does seem to have have ample cash to keep it afloat for a few years. Investors are right to worry about share dilution, too.

Freeport posted strong fourth-quarter results, and is cutting its costs, as well. It’s also expanding its scope, moving into oil and gas exploration — which has some investors not thrilled, seeing it as a loss in focus. The stock looks attractive, trading near a 52-week low, and with a forward P/E ratio of just eight. It sports a 3.8% dividend, too, and management is expecting moderate growth in the near-term. Bears worry about interest rate hikes from the Fed, though, which can make some alternatives to gold more attractive.

Among holdings in which Farallon Capital Management increased its stake was Westport Innovations . Westport designs low-emissions engines that run on natural gas, among other things. Many think its future is bright, thanks to a growing interest in alternative fuels, and currently low prices for natural gas — which may rise. The company recently inked a deal with a China-based natural-gas-fueling-station concern, and it’s also set to provide engines for two of the biggest U.S. transit fleets.

Farallon Capital Management reduced its stake in lots of companies, including Oracle . Oracle, meanwhile, has been shifting its focus from hardware to the cloud computing realm — though some are crying foul there. The company has been posting double-digit revenue and earnings growth rates over the past few years, and bulls see competitive strengths in its cash pile and strong customer roster. Oracle is buying telecom infrastructure specialist Acme Packet, which has some scratching their heads due to a lot of strong competition in its field.

Finally, Farallon’s biggest closed positions included Qualcomm and CBS. Other closed positions of interest include Molycorp , which has been struggling in a tough environment and worrying investors with a surprisingly large share offering and debt issuance, as well as negative free cash flow. Still, for those who can accept considerable risk and volatility, …read more
Source: FULL ARTICLE at DailyFinance

Why Walmart is Betting Big on Small Stores

By Lydia Dishman, Contributor

Big box is so last decade. That’s why Walmart is upping the ante on its expansion efforts with smaller stores. According to Bill Simon, head of Walmart’s U.S. division who spoke on an industry conference call yesterday, “They compete really well against multiple channels,” including competitors such as Dollar General, Walgreens and supermarkets. …read more
Source: FULL ARTICLE at Forbes Latest