Family Dollar's New-Store Sales Increase

Family Dollar Stores Inc.'s new stores are performing better than a year ago, with new-store sales running at about 86 percent of the average existing store, compared to a low-80 percent range last year, according to Chief Operating Officer David Alexander. The discount retailer has 4,303 stores and expects to open about 525 stores and close about 50 in the current fiscal year, which ends in August.

The discount retailer says net income rose $3.3 million, or six percent, to $63.8 million for the second quarter ended March 2. Per-share earnings also rose six percent, to 37 cents from 35 cents and two pennies above the consensus among analysts polled by Thomson Financial/First Call.

Moderator Comment: Do Dollar Stores have expansion opportunities outside their current socio-economic consumer demographic niche?

It isn't any secret that dollar stores are the fastest growing retail channel in the U.S. at present. Family Dollar's announcement comes right on the heels of a favorable quarterly financial report from Dollar General. A point of difference between these competitors is that Dollar General is currently testing sales of perishables such as dairy and meat in some of its units. Family Dollar's chief exec, Levine has indicated that his company will not follow suit. [George Anderson - Moderator]

• New-Store Sales Productivity Improving - The Wall Street Journal (subscription required)