FDO reported an 8.7% increase in net sales and a 6.4% increase in comparable store sales for the second quarter of fiscal 2009. The company also raised its earnings guidance for the quarter, to be released on April 8, 2009.
Price point shoppers continue to search for value- as wallet share may have increased and simultaneously size of walled decreased, SSS subsequently increased
JPMorgan expects Family Dollar Stores to face increased competition from players, such as Dollar General and Wal-Mart. This together with a weakening market is expected to have a negative impact on Family Dollar Stores. Dollar General is under the strong management of a PE firm, Kohlberg Kravis Roberts & Co. while Wal-Mart is expected to gain market share among discount retailers after it reduces prices. JPMorgan downgraded the stock from ‘Neutral’ to ‘Underweight’.