Factual Stock Report | July 8, 2015
Family Dollar Stores Inc. (FDO) NYS
GICS Sector: Consumer Discretionary
Sub-Industry: General Merchandise Stores
Summary: This company operates a chain of more than 8,100 retail discount stores in 46 states across the U.S.
Key Stock Statistics
Source S & P, company reports, Vickers
Price as of Jul 7, 2015
52-Wk Range
Trailing 12-Month EPS
Dividend Rate/Share
$0.00
$80.97–59.81
$2.04
$1.24
Corporate Information
Trailing 12-Month P/E
Tangible Book Val/Share
$10K Invested 5 Yrs Ago
Beta
NM
$14.61
$22,275
0.42
Yield (%)
Total Shares Outstg. (M)
Market Capitalization(B)
Institutional Ownership (%)
Nil
114.0
NA
85
Price Performance
Investor Contact
Telephone
K.F. Rawlins (704-849-7496)
704-847-6961.
30-Week Mov. Avg.
Relative Strength
GAAP Earnings vs. Previous Year
10-Week Mov. Avg.
Up
Down
Volume
No Change
Above Avg.
Below Avg.
...................................................................................................................................................................
Company Address
10401 Monroe Road,
Matthews, NC 28105.
80
...................................................................................................................................................................
Website
http://www.familydollar.com
70
65
Revenue/Earnings Data
Revenue (Million $)
1Q
2015
2,556
2014
2,500
2013
2,422
2012
2,148
2011
1,997
2010
1,823
60
55
2Q
2,798
2,717
2,894
2,459
2,263
2,090
3Q
2,728
2,659
2,574
2,360
2,153
1,997
4Q
-2,614
2,502
2,364
2,134
1,957
Year
-10,489
10,391
9,331
8,548
7,867
Vol.
60
Mil.
24
12
8
4
0
30
F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S
...................................................................................................................................................................
Earnings Per Share ($)
2015
0.36
2014
0.68
2013
0.69
2012
0.68
2011
0.58
2010
0.49
0.67
0.80
1.21
1.15
0.98
0.81
0.70
0.71
1.05
1.06
0.91
0.77
-0.30
0.88
0.69
0.66
0.56
-2.49
3.83
3.58
3.12
2.62
2012
2013
2014
2015
S&P Financial Writer
Operational Review Jul 02, 2015
Highlights
Standard & Poor's has dropped analytical coverage of FDO. Our most recent recommendation was 3 (hold).
Fiscal year ended Aug. 31. Next earnings report expected: Early November
Investment Rationale/Risk
The Investment Rationale/Risk section of this Stock Report will be updated shortly.
Dividend Data
Amount
($)
0.310
0.310
Date
Decl.
06/02
09/03
Ex-Div.
Date
06/11
09/11
Stk. of
Record
06/13
09/15
Payment
Date
07/15/14
10/15/14
Dividends have been paid since 1976. Source: Company reports.
All of the views expressed in this research report accurately reflect our quantitative research models regarding any and all of the subject securities or issuers. No part of our compensation was, is, or will be, directly or
indirectly, related to the specific recommendations or views expressed in this research report. S&P Capital IQ and/or one of its affiliates has performed services for and received compensation from this company during
the past twelve months.
Page 1 of 14
Please read the Required Disclosures on the last page of this report. Redistribution is prohibited without written permission
Factual Stock Report | July 8, 2015
Family Dollar Stores Inc. (FDO) NYS
GICS Sector: Consumer Discretionary
Sub-Industry: General Merchandise Stores
Summary: This company operates a chain of more than 8,100 retail discount stores in 46 states across the U.S.
Business Summary July 02, 2015
CORPORATE OVERVIEW. Family Dollar Stores Inc. (FDO) operates a chain of more
than 8,000 retail discount stores in 46 states. The company describes its typical
customer as a woman in her mid-40s who is the head of her household and has an
annual income of under $30,000. Family Dollar stores carry an assortment of
hardlines and softlines priced from under $1 to $10, and are operated on a
self-service basis, with limited advertising support and promotional activity. The
once cash-only stores now accept PIN-based debit card payments in most
locations. Food stamp and credit card acceptance is also being rolled out. In our
view, broader tender options offer the company an opportunity to improve its share
of customer wallet as shopping is more convenient and available cash does not
limit basket size.
Store inventory is comprised of both regularly available merchandise, which
provides consistency in product offerings, and a frequently changing selection of
brands and products that FDO acquires through closeouts and manufacturer
overruns at discounted wholesale prices. Low product costs and store overhead
enable the company to sell its value-priced merchandise profitably.
PRIMARY BUSINESS DYNAMICS. FDO's primary growth drivers are same-store
sales and chain expansion. In our opinion, FDO is attracting customers with an
expanded assortment of consumables and "treasure hunt" items that add an
element of excitement and interest to the shopping experience.
While core customers are spending more per store visit, they are also shopping less
often due to macroeconomic concerns. However, we think FDO is gaining
incremental business from middle-income customers trading down from
higher-priced retailers for everyday basics.
In July, the company agreed to be acquired by Dollar Tree for $74.50 in cash and
stock per share, or about $9.2 billion on an enterprise value basis. The transaction
was expected to close by early 2015, subject to standard approvals. Meanwhile, in
August, Dollar General offered to purchase the company for $78.50 in cash per
share or about $9.7 billion in total. Dollar General subsequently raised its offer to
$80.00 per share before withdrawing. The sale to Dollar Tree is expected to close in
July 2015, subjected to final FTC approvals and conditions.
company added an additional 475 and 500 new stores, respectively. Selling square
footage increased 6.8% to 56.8 million sq. ft. in FY 13, over the prior year. FDO
opened 526 stores in FY 14. FDO plans to open approximately 335 net new stores in
FY 15.
CORPORATE STRATEGY. FDO is focused on five multi-year growth initiatives. First,
under its Food Strategy, the company has been installing refrigerated
food/beverage coolers in its stores since FY 05, as well as adding more shelf stable
foods (with a focus on quick-prep and ready-to-eat products) since FY 07. In our
view, an expanded food assortment enables FDO to drive store traffic by better
meeting customers' fill-in food needs between visits to the supermarket -- much like
convenience stores. Stores equipped with coolers also qualify for the federal food
stamp program, adding a new source of sales dollars for the company.
Second, under its Treasure Hunt Strategy, FDO has been supplementing its basic
assortment with unexpected, limited-time product offerings. Treasure hunt items
drive store traffic by creating customer excitement and by differentiating Family
Dollar from its competitors. The company uses circulars to advertise treasure hunt
items and to reinforce its broader assortment of consumables.
Third, along with sales mix enhancement, FDO has implemented store-level systems
upgrades and organizational and process changes aimed at improving store
manager retention, reducing inventory theft, or "shrinkage," and better managing
inventory and operational workflows. The company's new Store of the Future
technology platform, for example, enables faster customer checkout and facilitates
the acceptance of credit cards and electronic benefit transfers, including food
stamps.
Fourth, FDO's Project Accelerate is aimed at improving its merchandising and
supply chain processes. This multi-year initiative will focus on price optimization,
category management, space planning, assortment planning, and merchandise
financial planning.
Fifth, to enhance the customer shopping experience, the company has created
Concept Renewal lab stores to test improvements in store layout and design, which
are then incorporated into new stores.
In terms of expansion, FDO continues to be one of the fastest-growing retail chains
in the U.S. The company's stores are located in rural, small town, suburban, and,
increasingly, urban markets. A relatively small store size enables FDO to open new
stores in locations that provide neighborhood convenience to its customers in each
of these markets. From FY 05 through FY 11, the company increased its store count
to 7,023 from 5,898, representing a compound annual growth rate of 3.0%. During
this period, FDO's selling square footage increased to 49.9 million sq. ft. from 41.3
million sq. ft., a compound annual growth rate of 3.2%. In FY 12 and FY 13, the
Peer Comparison Chart - 1 Year
Company vs Market Comparison Chart - 1 Year
Family Dollar Stores
Burlington Stores
Canadian Tire'A'
Company
Family Dollar Stores
Index
S&P 500
Sector
Consumer Discretionary
Industry
Multiline Retail
100
60
80
40
60
20
40
20
0
0
-20
-20
-40
-40
-60
-60
-80
-80
-100 Jul
Aug
Sep
2014
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
2015
-100 Jul
Aug
Sep
Oct
2014
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
2015
Page 2 of 14
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Factual Stock Report | July 8, 2015
Family Dollar Stores Inc. (FDO) NYS
GICS Sector: Consumer Discretionary
Sub-Industry: General Merchandise Stores
Summary: This company operates a chain of more than 8,100 retail discount stores in 46 states across the U.S.
Key Growth Rates and Averages
Past Growth Rate (%)
Sales
Net Income
Expanded Ratio Analysis
1 Year
3 Years
5 Years
9 Years
0.94
-35.86
7.48
-8.47
7.92
1.75
6.84
7.98
.................................................................................................................................................................................................................................................
Ratio Analysis (Annual Avg.)
Net Margin (%)
% LT Debt to Capitalization
Return on Equity (%)
2.71
22.35
17.43
3.84
24.74
27.82
4.12
24.34
27.89
3.83
20.62
23.27
Price/Sales
Price/EBITDA
Price/Pretax Income
P/E Ratio
Avg. Diluted Shares Outstg (M)
2014
0.86
11.52
21.44
31.86
114.4
2013
0.72
8.16
10.89
16.96
115.8
2012
0.80
8.22
11.28
17.73
118.1
2011
0.84
8.75
11.63
18.48
124.5
Figures based on calendar year-end price
Company Financials Fiscal Year Ended Aug. 31
Per Share Data ($)
Tangible Book Value
Cash Flow
Earnings
S&P Capital IQ Core Earnings
Dividends
Payout Ratio
Prices:High
Prices:Low
P/E Ratio:High
P/E Ratio:Low
2014
14.61
4.81
2.49
2.49
Nil
Nil
80.97
55.64
33
22
2013
13.89
5.90
3.83
3.83
0.94
25%
75.29
54.06
20
14
2012
11.25
5.36
3.58
3.64
0.78
22%
74.73
53.03
21
15
2011
9.26
4.59
3.12
3.12
0.67
21%
60.53
41.31
19
13
2010
10.90
3.88
2.62
2.55
0.58
22%
51.81
27.15
20
10
2009
10.38
3.21
2.07
2.07
0.52
25%
35.00
24.02
17
12
2008
8.98
2.72
1.66
1.66
0.48
29%
32.50
14.62
20
9
2007
8.19
2.59
1.62
1.71
0.44
27%
35.42
17.95
22
11
2006
8.04
2.13
1.26
1.44
0.40
31%
30.91
21.57
24
17
2005
8.64
1.99
1.30
1.21
0.36
28%
35.25
19.40
27
15
10,489
786
265
30.0
423
32.7%
285
285
10,391
922
239
25.9
691
35.8%
444
444
9,331
910
211
25.1
664
36.4%
422
429
8,548
821
182
22.5
617
37.1%
388
388
7,867
748
172
13.3
564
36.5%
358
349
7,401
617
160
14.1
451
35.4%
291
291
6,984
515
150
15.4
362
35.6%
233
233
6,834
532
144
17.0
382
36.4%
243
257
6,395
452
135
13.1
311
37.3%
195
223
5,825
458
115
Nil
343
36.5%
218
202
149
2,102
3,857
1,129
484
1,666
2,166
436
550
1.9
22.4
2.7
7.5
17.4
145
1,857
3,710
1,080
500
1,599
2,116
744
683
1.7
23.7
4.3
12.5
30.6
98.6
1,768
3,373
1,066
516
1,298
1,830
603
633
1.7
28.2
4.5
13.3
35.4
237
1,534
2,996
1,017
532
1,087
1,636
345
571
1.5
32.6
4.5
13.0
31.0
503
1,660
2,982
1,054
250
1,422
1,672
212
530
1.6
15.0
4.6
12.3
25.0
445
1,599
2,843
1,060
250
1,440
1,690
155
451
1.5
14.8
3.9
10.6
21.6
159
1,344
2,662
1,069
250
1,254
1,555
168
383
1.3
16.1
3.3
8.8
19.2
87.0
1,537
2,624
1,130
250
1,175
1,494
132
387
1.4
16.7
3.5
9.4
20.3
79.7
1,419
2,523
986
250
1,208
1,537
192
330
1.4
16.2
3.1
7.9
8.9
105
1,355
2,410
895
Nil
2,187
2,274
229
332
1.5
Nil
3.7
9.4
10.6
Income Statement Analysis (M $)
Revenue
Operating Income
Depreciation
Interest Expense
Pretax Income
Effective Tax Rate
Net Income
S&P Capital IQ Core Earnings
Bal Sheet & Other Financial Data (M $)
Cash
Current Assets
Total Assets
Current Liabilities
Long Term Debt
Common Equity
Total Capital
Capital Expenditures
Cash Flow
Current Ratio
% Long Term Debt of Capitalization
% Net Income of Revenue
% Return on Assets
% Return on Equity
Data as orig reptd.; bef. results of disc opers/spec. items. Per share data adj. for stk. divs.; EPS diluted. E-Estimated. NA-Not Available. NM-Not Meaningful. NR-Not Ranked. UR-Under Review.
Quantitative Evaluations
Page 3 of 14
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Factual Stock Report | July 8, 2015
Family Dollar Stores Inc. (FDO) NYS
GICS Sector: Consumer Discretionary
Sub-Industry: General Merchandise Stores
Relative Strength Rank
Summary: This company operates a chain of more than 8,100 retail discount stores in 46 states across the U.S.
77/STRONG
Volatility
77
Lowest=1
Average
LOW
AVERAGE
HIGH
Highest=99
Technical Evaluation
BULLISH
Since June, 2015, the technical indicators for FDO
have been BULLISH.
S&P Capital IQ Quality
Ranking
D
C
B-
A+
B
B+
A-
A
A+
Page 4 of 14
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Factual Stock Report | July 8, 2015
Family Dollar Stores Inc. (FDO) NYS
GICS Sector: Consumer Discretionary
Sub-Industry: General Merchandise Stores
Summary: This company operates a chain of more than 8,100 retail discount stores in 46 states across the U.S.
Corporate Information
Corporate History
List of Officers
K.F. Rawlins Investor Contact
H.R. Levine Chrmn & CEO
G.M. Philbin Pres & COO
M.A. Winston EVP, CFO & Chief Acctg Officer
J.C. Snyder Secy, SVP & General Counsel
J.R. Jewett SVP & CIO
E.D.
Gast Cntlr
...................................................................................................................................................................
List of Board Members
H.R. Levine
P.S. Davies
S.A. Decker
E.C. Dolby
G.A. Eisenberg
E.P. Garden
G.R. Mahoney
J.G. Martin
H. Morgan
D.C.
Pond
...................................................................................................................................................................
Founded
1959
...................................................................................................................................................................
Employees
(#)
60,000
...................................................................................................................................................................
Stockholders
4061
...................................................................................................................................................................
Transfer
Agents
Mellon Investor Services LLC
...................................................................................................................................................................
Auditor
PRICEWATERHOUSECOOPERS
...................................................................................................................................................................
Subsidiaries
Family Dollar Distribution, L.P.
Family Dollar Holdings, Inc.
Family Dollar Merchandising, L.P.
Family Dollar Operations, Inc.
Family Dollar Services, Inc.
Family Dollar Stores of Alabama, Inc.
Family Dollar Stores of Arkansas, Inc.
Family Dollar Stores of Colorado, Inc.
Family Dollar Stores of Connecticut, Inc.
Family Dollar Stores of D.C., Inc.
Family Dollar Stores of Delaware, Inc.
Family Dollar Stores of Florida, Inc.
Family Dollar Stores of Georgia, Inc.
Family Dollar Stores of Indiana, L.P.
Family Dollar Stores of Iowa, Inc.
Family Dollar Stores of Kentucky, Ltd.
Family Dollar Stores of Louisiana, Inc.
Family Dollar Stores of Maryland, Inc.
Family Dollar Stores of Massachusetts, Inc.
Family
Dollar Stores of Michigan, Inc.
...................................................................................................................................................................
INCORPORATED in Delaware Nov. 24, 1969. Business was founded in 1959.
Company Management Bios
H.R. Levine Chrmn & CEO
Mr. Howard R. Levine has been an Executive Chairman and Chief Executive Officer at Family Dollar Stores Inc.
since January 16, 2003 and August 1998 respectively. Mr. Levine served as the President of Family Dollar
Stores of Louisiana, Inc., and Family Dollar Stores of New Mexico, Inc. He served as the President of Family
Dollar Stores Inc., from April 1997 to January 16, 2003. He was employed by Family Dollar Stores Inc., in various
capacities in the Merchandising Department from 1981 to 1987. From 1988 to 1992, he served as the President
of Best Price Clothing Stores Inc., a chain of ladies' apparel stores. From 1992 to April 1996, he was
self-employed as an Investment Manager. He rejoined Family Dollar Stores Inc., in April 1996 and served as its
Vice President and General Merchandise Manager of Softlines since April 1996, the Senior Vice President of
Merchandising and Advertising since September 1996 and the Chief Operating Officer since April 1997. He has
been an Executive Director of Family Dollar Stores Inc., since 1997. He has been a Director of Dollar Tree, Inc.
since July 2015.
G.M. Philbin Pres & COO
Mr. Gary M. Philbin has been the President and Chief Operating Officer of Family Dollar Stores Inc. since July
6, 2015. Mr. Philbin has been Chief Operating Officer of Dollar Tree, Inc. since March 2007 and has been its
President since June 10, 2013. He served as President and Chief Executive Officer of The Grand Union
Company since February 13, 2000. He served as Senior Vice President of Stores at Dollar Tree, Inc. (alternate
name, Dollar Tree Stores Inc.) from December 2001 to March 2007. Prior to joining Dollar Tree, Mr. Philbin held
senior-level positions in both merchandising and operations during his thirty years in the retail grocery
industry. He served as President and Chief Merchandising Officer of The Grand Union Company since joining in
October 1997. From June 1996 to 1997, He served as Executive Vice President in charge of Merchandising and
Operations for the Cub Food Store Division of SuperValu, Inc., Minnesota. Before joining Cub Foods, he served
as Senior Vice President of Merchandising at the Waldbaum's Division, New York, of the Great Atlantic &
Pacific Tea Company, a leading supermarket chain based in New Jersey, from July 1993 to 1996. Prior to his
employment with Waldbaum's, Mr. Philbin also held various positions in Store Operations and Merchandising
over his 20 year career with the Kroger Company, beginning in 1973. He served as a Director of The Grand
Union Company since October 1997.
M.A. Winston EVP, CFO & Chief Acctg Officer
Ms. Mary A. Winston, CPA, has been Chief Financial Officer, Chief Accounting Officer and Executive Vice
President at Family Dollar Stores Inc. since April 05, 2012. Ms. Winston served as the Senior Vice President and
Chief Financial Officer of Giant Eagle, Inc. since September 2008. Ms. Winston founder WinsCo Financial, LLC
and served as its President from July 2007 to September 2008. Ms. Winston served as Executive Vice President
and Chief Financial Officer of Scholastic Corporation from February 2004 to January 2007 and its Principal
Accounting Officer since November 3, 2006. She served as a Vice President of Visteon Corporation from 2002 to
2004 and Pfizer Inc. from 1995 to 2002. She served as controller of Visteon Corporation since April 10, 2003. She
served as Treasurer of Visteon Corporation. Ms. Winston has been an Independent Director of Dover
Corporation since January 1, 2005. Ms. Winston has been a Director of Plexus Corp. since July 28, 2008. She
obtained a B.B.A. from the University of Wisconsin-Milwaukee with Accounting and an M.B.A. from
Northwestern University, Kellogg School of Management in Finance and is a Certified Public Accountant.
Page 5 of 14
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Factual Stock Report | July 8, 2015
Family Dollar Stores Inc. (FDO) NYS
GICS Sector: Consumer Discretionary
Sub-Industry: General Merchandise Stores
Summary: This company operates a chain of more than 8,100 retail discount stores in 46 states across the U.S.
Company Management Bios Continued
J.C. Snyder Secy, SVP & General Counsel
Mr. James C. Snyder, Jr. also known as Jim, has been a Senior Vice President,
General Counsel and Corporate Secretary at Family Dollar Stores Inc. since April
2009. Mr. Snyder served as a Secretary and Vice President of The Home Depot Inc.
from February 2007 to June 25, 2007 and Acting General Counsel from February 2007
to June 25, 2007. He served as an Interim Head of Legal Department and Risk
Management of Home Depot Inc. since February 14, 2007 and also served as its
Vice President of Litigation and Risk Management from March 2006 to February
2007. He served as Vice President of Legal for Home Depot Inc. from March 2004 to
March 2006 and its Associate General Counsel for Legal and Risk Management. He
served as Director of Legal for Home Depot Inc. from November 2002 to March 2004.
He joined Home Depot Inc. in March 2001, as a Corporate Counsel. Mr. Snyder
served as a Partner at law firm King & Spalding in Atlanta, where he practiced for
12 years. He focused his practice on complex litigation and corporate
investigations. He also advised clients on environmental matters and the
establishment of corporate compliance programs. He is an active member of the
American Bar Association and the State Bar of Georgia. He is licensed to practice
in Georgia, Pennsylvania and the District of Columbia. He also serves on the board
of directors for Special Olympics of Georgia. Mr. Snyder holds Bachelor of Arts
degree in economics from Wake Forest University and his Juris Doctor degree from
George Washington Law School.
J.R. Jewett SVP & CIO
Mr. Joshua R. Jewett has been the Chief Information Officer of Family Dollar Stores
Inc., since August 2002 and also serves as its Senior Vice President of Information
Technology. Mr. Jewett served as Senior Vice President of Information Technology
& Procurement at Family Dollar since August 2002. Prior to Family Dollar, Mr. Jewett
was employed by Answerthink, Inc. from July 1999 to August 2002, where he served
as Senior Director. From October 1993 to July 1999, he was a Principal in CFT
Consulting, Inc.
E.D. Gast Cntlr
Erik D. Gast serves as a Vice President and Controller of Family Dollar Stores Inc.
Erik D. Gast served as Vice President of Finance at Ace Hardware Corporation.
Page 6 of 14
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Factual Stock Report | July 8, 2015
Family Dollar Stores Inc. (FDO) NYS
GICS Sector: Consumer Discretionary
Sub-Industry: General Merchandise Stores
Summary: This company operates a chain of more than 8,100 retail discount stores in 46 states across the U.S.
Stock Performance
Sub-Industry Outlook
Based on S&P 1500 Indexes
Month-End Price Performance as of 6/30/2015
Our fundamental outlook for general merchandisers (or discounters) is neutral. While we see benefits for
discounters as we believe consumers remain cost-conscious and are focusing on buying everyday necessities
and seeking out lower-priced goods, we remain concerned about increased pricing competition in a slowly
growing macro-economic environment. Llow food and gas inflation may support low-income consumer
spending growth, but we think consumers are saving more of their disposable income than in the recent past.
S&P 1500
Sector
Sub-Industry
300
In the discount market, retailers compete heavily on low prices, as core assortments of basic consumables
tend to be the same. Profit margins are generally better on more discretionary-purchase merchandise, but we
think such items carry more markdown risk for retailers. We believe increased levels of direct sourcing and
close-out buys (inventory liquidated by vendors or other retailers) have enabled some discounters to lower
product costs, raise profit margins, and improve the quality of merchandise, while keeping prices fixed in
recent years. In our view, this has created a better price-value proposition for customers.
250
200
In addition to low prices, many discounters are broadening their customer appeal with increased marketing
and expanded assortments of "treasure hunt" items (or "buzz builders") that create excitement in the store, and
convenience foods that better meet customers' frequent fill-in food shopping needs. While a broader food
assortment has positioned discounters to compete more directly with drugstores, supermarkets, and
convenience stores for customer dollars, we think discounters offer consumers a more compelling value
proposition. Also, with most once cash-only chains now accepting debit/credit cards, we believe many middleand upper-income consumers are trading down to discounters from national drugstore and supermarket
chains for everyday needs.
150
100
50
0
2010
2011
2012
2013
2014
2015
Note: All Sectors & Sub-Industry information is based on the Global
Industry Classification Standard (GICS)
Year to date through May 31, the S&P General Merchandise Stores Index was up 3.5% compared to 2.6% gain
for the S&P 1500 Index. In 2014, the sub-industry index increased 20.2%, outperforming the 10.9% rise for the
S&P 1500.
Efraim Levy, CFA
Sub-Industry: General Merchandise Stores Peer Group*: Based on market capitalization within GICS Sub-Industry
Stock
Symbol
Recent
52 Wk
Yield
Quality
Stk Mkt
P/E Fair Val
S&P IQ
Ret on
LTD to
Stk
($)
H/L
($)
Beta
(%)
Ranking
Cap (M)
Ratio
Calc($)
%ile
Rev (%)
Cap (%)
Family Dollar Stores
FDO
NA
79.39
80.97/59.81
0.42
Nil
39
NA
A+
99
2.7
22.4
..................................................................................... ...................................................................................................... ................................................. .............................................................. ............................. ............................... .......................................................................................................................................
Burlington Stores
BURL
3,913
52.06
61.94/28.66
NA
Nil
50
NA
NR
18
1.4
105.7
..................................................................................... ...................................................................................................... ................................................. .............................................................. ............................. ............................... .......................................................................................................................................
Canadian Tire'A'
CTC.AC
7,831
106.40
113.54/92.57
0.80
2.0
14
NA
A
NA
5.1
23.4
..................................................................................... ...................................................................................................... ................................................. .............................................................. ............................. ............................... .......................................................................................................................................
Dollar General
DG
23,296
78.41
79.60/53.78
0.39
1.1
22
91.50
NR
92
5.6
31.2
..................................................................................... ...................................................................................................... ................................................. .............................................................. ............................. ............................... .......................................................................................................................................
Gordmans Stores
GMAN
106
5.57
8.92/2.42
0.52
Nil
NM
NA
NR
29
NM
35.7
..................................................................................... ...................................................................................................... ................................................. .............................................................. ............................. ............................... .......................................................................................................................................
NA-Not Available NM-Not Meaningful NR-Not Rated. *For Peer Groups with more than 15 companies or stocks, selection of issues is based on market capitalization.
Page 7 of 14
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Factual Stock Report | July 8, 2015
Family Dollar Stores Inc. (FDO) NYS
GICS Sector: Consumer Discretionary
Sub-Industry: General Merchandise Stores
Summary: This company operates a chain of more than 8,100 retail discount stores in 46 states across the U.S.
S&P Analyst Research Notes and other Company News
July 2, 2015
Family Dollar Stores Inc. reported unaudited consolidated earnings results for the
third quarter and nine months ended May 30, 2015. For the quarter, the company
reported net sales of $2,728,176,000 compared to $2,658,964,000 a year ago.
Operating profit was $126,285,000 compared to $120,808,000 a year ago. Income
before income taxes was $128,003,000 compared to $121,307,000 a year ago. Net
income was $79,943,000 or $0.70 per basic and diluted common share compared to
$81,147,000 or $0.71 per basic and diluted common share a year ago. Adjusted
operating profit was $130,975,000 compared to $145,290,000 a year ago. Adjusted net
income was $84,633,000 or $0.74 diluted per share compared to $96,502,000 or $0.85
diluted per share a year ago. Comparable store sales for the 13-week period
increased 0.7% as a result of an increase in the number of customer transactions,
which was partially offset by a decrease in the average customer transaction value.
For the nine months, the company reported net sales of $8,082,866,000 compared to
$7,875,276,000 a year ago. Operating profit was $314,492,000 compared to
$381,384,000 a year ago. Income before income taxes was $317,232,000 compared to
$382,624,000 a year ago. Net income was $198,026,000 or $1.73 per basic and diluted
common share compared to $250,043,000 or $2.18 per diluted common share a year
ago. Net cash provided by operating activities were $342,638,000 compared to
$253,001,000 a year ago. Capital expenditures were $253,778,000 compared to
$307,183,000 a year ago. Adjusted operating profit was $336,273,000 compared to
$405,866,000 a year ago. Adjusted net income was $219,807,000 or $1.92 diluted per
share compared to $265,398,000 or $2.32 diluted per share a year ago. The reduction
in capital expenditures was primarily due to fewer new store openings and fewer
store renovations. These reductions were partially offset by increased investments
in security equipment and merchandise fixtures in existing stores.
May 21, 2015
10:20 am ET ... S&P CAPITAL IQ KEEPS HOLD OPINION ON SHARES OF DOLLAR
TREE (DLTR 77.71***): We set our FY 17 (Mar.) EPS estimate at $4.05. Our 12-month
target of $80 is 23X our FY 16 estimate of $3.45 on historical and comparative P/E
analysis incorporating expected accretion from the planned purchased of Family
Dollar (FDO 78 ***) not included in our forecasts. The transaction is now expected
to close in July, pending approval from the FTC and including the planned
divestiture of 330 stores. Excluding $0.37 of acquisitions related costs, DLTR posts
Apr-Q EPS of $0.71, vs. $0.67, below the Capital IQ consensus of $0.75, largely due to
the west coast port strike. /E. Levy-CFA
a year ago. Net income was $118.083 million or $1.03 diluted per share against
$168.896 million or $1.47 diluted per share a year ago. Net cash provided by
operating activities was $102.801 million against $111.924 million a year ago.
Adjusted operating profit was $205.298 million against $260.576 million a year ago.
Adjusted net income was $135.174 million or $1.18 diluted per share against $168.896
million or $1.47 diluted per share a year ago.
April 8, 2015
12:30 pm ET ... S&P CAPITAL IQ MAINTAINS HOLD OPINION ON SHARES OF
FAMILY DOLLAR STORES (FDO 79.75***): We raise our FY 16 (Aug) EPS estimate
$0.10 to $2.88. We increase our 12-month target price $2 to $80 to reflect changes in
the value of planned cash plus stock merger with Dollar Tree (DLTR 81***). FDO
posts X-Q adjusted EPS of $0.74, vs. $0.80, above our $0.68 estimate and the Capital
IQ consensus forecast of $0.73. Separately, based on unconfirmed Dow Jones
reports, the FTC is finalizing its review of the merger with DLTR with an expected
requirement that 340 Family Dollar stores be divested. The transaction is expected
to close in May. /E. Levy-CFA
April 8, 2015
Family Dollar Stores Inc. announced that they will report Q2, 2015 results at 8:00 AM,
US Eastern Standard Time on Apr 08, 2015
March 12, 2015
11:47 am ET ... S&P CAPITAL IQ KEEPS HOLD RECOMMENDATION ON SHARES OF
DOLLAR GENERAL CORP. (DG 73.55***): We increase our 12-month target $11 to
$80. We raise our FY 16 (Aug.) EPS estimate $0.40 to $3.90 and initiate FY 17's at
$4.45. Our target equates to 20X our FY 16 forecast, towards the upper part of its
historical range, reflecting shareholder friendly actions to be taken in the absence
of the planned purchase of Family Dollar Stores (FDO 79 ***). These include
authorization of a $1.3 billion share repurchase program, initiation of a cash
dividend and an acceleration of store openings and sq ft. growth. Posts Jan-Q EPS
of $1.17, vs. $1.01, above our $1.14 projection. /E. Levy-CFA /Erik Oja
April 9, 2015
Family Dollar Stores Inc. reported unaudited consolidated earnings results for the
second quarter and six months ended February 28, 2015. The company reported that
net income per diluted share in the second quarter of fiscal 2015 ended February 28,
2015, was $0.67 compared to $0.80 in the second quarter of fiscal 2014 ended March
1, 2014. Total net sales in the second quarter of fiscal 2015 increased 3.0% to $2.80
billion from $2.72 billion in the second quarter of fiscal 2014. Comparable store sales
for the 13-week period increased 0.5% as a result of an increase in the number of
customer transactions which was offset by a decrease in the average customer
transaction value. Excluding these merger expenses, adjusted operating profit in
the second quarter of fiscal 2015 was $125.8 million, or 4.5% of sales, as compared
to $140.3 million, or 5.2% of sales, in the second quarter of fiscal 2014. Adjusted net
income for the second quarter of fiscal 2015 was $84.9 million, excluding fees
related to the company's pending merger with Dollar Tree, compared with $90.9
million in the second quarter of fiscal 2014. Operating profit was $117.548 million
against $140.257 million a year ago. Income before income taxes was $118.236
million against $140.457 million a year ago. Net income was $76.706 million against
$90.869 million a year ago. Adjusted operating profit was $125.778 million against
$140.257 million a year ago. Adjusted diluted net income per common share was
$0.74 against $0.80 diluted per share a year ago. Capital expenditures were $176.5
million in the first half of fiscal 2015 as compared to $219.7 million in the first half of
fiscal 2014. The reduction in capital expenditures was primarily due to fewer new
store openings and a reduction in technology investments. These reductions were
partially offset by increased investments in security equipment and merchandise
fixtures in existing stores. Net sales were $5,354.690 million against $5,216.312
million a year ago. Operating profit was $188.207 million against $260.576 million a
year ago. Income before income taxes was $189.229 million against $261.317 million
Page 8 of 14
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Factual Stock Report | July 8, 2015
Family Dollar Stores Inc. (FDO) NYS
GICS Sector: Consumer Discretionary
Sub-Industry: General Merchandise Stores
Summary: This company operates a chain of more than 8,100 retail discount stores in 46 states across the U.S.
Consensus Analyst Opinion
Analyst Recommendations
BUY
BUY/
HOLD
HOLD
WEAK
HOLD
SELL
Monthly Average Trend
Buy
Buy/Hold
Hold
Weak Hold
B
BH
H
WH
Sell
S
No Opinion
Buy
Hold Sell
Average
Companies Offering Coverage
B
BH
BB&T Capital Markets
BMO Capital Markets Equity Research
Barclays
Credit Suisse
Deutsche Bank
FBR Capital Markets & Co.
Goldman Sachs
Guggenheim Securities, LLC
Jefferies LLC
Johnson Rice & Company, L.L.C.
MKM Partners LLC
Northcoast Research
Piper Jaffray Companies
Telsey Advisory Group LLC
Zacks Investment Research Inc.
H
WH
S
Number of Analysts Following Stock
30
20
10
Stock Price ($)
80
70
Consensus vs. Performance
For fiscal year 2015, analysts estimate that FDO will earn
$2.76. For the 3rd quarter of fiscal year 2015, FDO
announced earnings per share of $0.70, representing
25% of the total annual estimate. For fiscal year 2016,
analysts estimate that FDO's earnings per share will
grow by 9% to $3.01.
60
50
A
S
O
N
D
J
F
M
A
M
2013
J
J
A
S
O
N
D
J
F
M
2014
No. of Rankings
1
Buy
A
M
J
J
2015
% of Total
5
1 Mo. Prior
0
3 Mos. Prior
1
...............................................................................................................................................................................................................................................................................................................................
Buy/Hold
0
0
0
0
...............................................................................................................................................................................................................................................................................................................................
Hold
19
86
0
17
...............................................................................................................................................................................................................................................................................................................................
Weak Hold
1
5
0
1
...............................................................................................................................................................................................................................................................................................................................
Sell
1
5
0
1
...............................................................................................................................................................................................................................................................................................................................
No Opinion
0
0
0
0
...............................................................................................................................................................................................................................................................................................................................
Total
22
100
0
20
...............................................................................................................................................................................................................................................................................................................................
Consensus Earnings Estimates
Estimates
2014
2015
2016
2014 Actual $2.49
5
4
3
2
M
A
M
J
J
A
S
O
N
D
J
2014
Fiscal Years
2016
Avg Est.
3.01
F
M
A
M
J
J
2015
High Est.
3.75
Low Est.
2.67
# of Est.
19
Est. P/E
NM
...............................................................................................................................................................................................................................................................................................................................
2015
2.76
2.92
2.60
18
NM
...............................................................................................................................................................................................................................................................................................................................
2016 vs. 2015
9%
28%
3%
6%
NA
...............................................................................................................................................................................................................................................................................................................................
Q4'16
0.78
0.82
0.73
5
NM
...............................................................................................................................................................................................................................................................................................................................
Q4'15
0.73
0.80
0.66
19
NM
...............................................................................................................................................................................................................................................................................................................................
Q4'16 vs. Q4'15
7%
2%
11%
-74%
NA
...............................................................................................................................................................................................................................................................................................................................
Page 9 of 14
Source: S&P, Capital IQ Estimates, Inc.
Please read the Required Disclosures on the last page of this report. Redistribution is prohibited without written permission
Factual Stock Report | July 8, 2015
Family Dollar Stores Inc. (FDO) NYS
GICS Sector: Consumer Discretionary
Sub-Industry: General Merchandise Stores
Summary: This company operates a chain of more than 8,100 retail discount stores in 46 states across the U.S.
Glossary
Quantitative Evaluations
S&P Capital IQ Fair Value Calculation
The quantitative evaluations covered in this report
and described below are derived from proprietary
arithmetic models. The quantitative model focuses on
a shorter-term horizon and is designed to capture
current information such as performance, market
conditions and certain risk factors. The objectives and
inputs to the model are static and should be viewed as
reflective of current trends and market conditions at
the time of each update and may take a shorter- term
view of a company than the qualitative report on the
same company.
The Fair Value formula uses forward EPS estimates to
calculate a company's projected return on equity. A
stock's "Fair Value" is then derived by comparing its
current valuation relative to the company's projected
ROE relative to historical valuations versus ROE for
the company, industry, and a benchmark index.
S&P Capital IQ Quality Ranking
Growth and stability of earnings and dividends are
deemed key elements in establishing S&P Capital IQ's
Quality Rankings for common stocks, which are
designed to capsulize the nature of this record in a
single symbol. It should be noted, however, that the
process also takes into consideration certain
adjustments and modifications deemed desirable in
establishing such rankings. The final score for each
stock is measured against a scoring matrix
determined by analysis of the scores of a large and
representative sample of stocks. The range of scores
in the array of this sample has been aligned with the
following ladder of rankings:
A+
A
AB+
NR
Highest
High
Above Average
Average
Not Ranked
B
BC
D
Below Average
Lower
Lowest
In Reorganization
S&P Capital IQ Fair Value Rank
Using S&P's exclusive proprietary quantitative model,
stocks are ranked in one of five groups, ranging from
Group 5, listing the most undervalued stocks, to Group
1, the most overvalued issues. Group 5 stocks are
expected to generally outperform all others. A positive
(+) or negative (-) Timing Index is placed next to the
Fair Value ranking to further aid the selection process.
A stock with a (+) added to the Fair Value Rank simply
means that this stock has a somewhat better chance
to outperform other stocks with the same Fair Value
Rank. A stock with a (-) has a somewhat lesser
chance to outperform other stocks with the same Fair
Value Rank. The Fair Value rankings imply the
following:
5-Stock is significantly undervalued
4-Stock is moderately undervalued
3-Stock is fairly valued
2-Stock is modestly overvalued
1-Stock is significantly overvalued
Dividends on American Depository Receipts (ADRs)
and American Depository Shares (ADSs) are net of
taxes (paid in the country of origin).
Insider Activity
Gives an insight as to insider sentiment by showing
whether directors, officers and key employees who
have proprietary information not available to the
general public, are buying or selling the company's
stock during the most recent six months.
Funds From Operations (FFO)
A financial measure used by Real Estate Investment
Trust's to reflect their operating performance. As
reported by co. based on NAREIT definition.
Volatility
Rates the volatility of the stock's price over the past
year.
Technical Evaluation
In researching the past market history of prices and
trading volume for each company, S&P Capital IQ's
models apply special technical methods and formulas
to identify and project price trends for the stock.
Relative Strength Rank
Shows, on a scale of 1 to 99, how the stock has
performed versus all other companies in S&P's
universe on a rolling 13-week basis.
Global Industry Classification Standard (GICS)
An industry classification standard, developed by
Standard and Poor's in collaboration with Morgan
Stanley Capital International (MSCI). Under the GICS
structure, companies are classified in one of 154
sub-industries, which are grouped into 68 industries,
24 industry groups, and 10 economic sectors
(consumer discretionary, consumer staples, energy,
financials, health care, industrials, information
technology, materials, telecom services, and utilities).
This four-tier structure accommodates companies
across the world and facilitates sector analysis and
investing.
Exchange Type
ASE - American Stock Exchange; AU - Australia Stock
Exchange; BB - Bulletin Board; NGM - Nasdaq Global
Market; NNM - Nasdaq Global Select Market; NSC Nasdaq Capital Market; NYS - New York Stock
Exchange; OTN - Other OTC (Over the Counter); OTC Over the Counter; QB - OTCQB; QX - OTCQX; TS Toronto Stock Exchange; TXV - TSX Venture
Exchange; NEX - NEX Exchange.
Page 10 of 14
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Factual Stock Report | July 8, 2015
Family Dollar Stores Inc. (FDO) NYS
GICS Sector: Consumer Discretionary
Sub-Industry: General Merchandise Stores
Disclosures
The data and information provided in S&P Capital IQ's
Factual Reports (the "Factual Reports") are selected by
financial writers who obtain this data from multiple
sources, including, but not limited to, S&P Capital IQ's
quantitative research models, S&P Capital IQ's
research commentaries from equity analysts and
consensus opinions from analysts who are not
employees of S&P Capital IQ and/or any of its
affiliates. Factual Reports may contain some
estimates, opinions and other types of non-factual
information.
Some Factual Reports may contain S&P Fair Value
Ranking information. Refer to the Glossary Section of
this report for detailed methodology and definition of
S&P Fair Value Rank.
S&P Capital IQ also produces STARS Stock Reports
and Quantitative Stock reports. These reports rank
stocks in accordance with the following ranking
methodologies:
STARS Stock Reports:S&P Capital IQ's qualitative
STARS recommendations are determined and
assigned by S&P Capital IQ equity analysts.
Quantitative Stock Reports: S&P Capital IQ's
quantitative evaluations are derived from S&P Capital
IQ's proprietary Fair Value quantitative ranking model.
The Fair Value Ranking methodology is a relative
ranking methodology. As a quantitative model, Fair
Value relies on history and consensus estimates and
does not introduce an element of subjectivity.
Factual Reports, STARS Stock Reports and
Quantitative Stock Reports: The methodologies used
in Factual Reports, STARS Stock Reports and
Quantitative Stock Reports (collectively, the "S&P
Capital IQ's Research Reports" or "Research Reports")
reflect different criteria, assumptions and analytical
methods and may have differing recommendations.
S&P Capital IQ believes that the methodologies and
data used to generate the different types of Research
Reports are reasonable and appropriate. Generally,
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However, in the event that different methodologies or
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Factual Reports:
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Summary: This company operates a chain of more than 8,100 retail discount stores in 46 states across the U.S.
STARS Stock Reports:
S&P Capital IQ Global STARS Distribution as of
March 31, 2015
Ranking
Buy
Hold
Sell
Total
North
America
37.6%
50.0%
12.4%
100%
Europe
Asia
Global
21.0%
48.0%
31.0%
100%
33.7%
38.8%
27.5%
100%
34.4%
48.4%
17.2%
100%
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Quantitative Stock Reports:
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Page 11 of 14
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Factual Stock Report | July 8, 2015
Family Dollar Stores Inc. (FDO) NYS
GICS Sector: Consumer Discretionary
Sub-Industry: General Merchandise Stores
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Summary: This company operates a chain of more than 8,100 retail discount stores in 46 states across the U.S.
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Page 12 of 14
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Factual Stock Report | July 8, 2015
Family Dollar Stores Inc. (FDO) NYS
GICS Sector: Consumer Discretionary
Sub-Industry: General Merchandise Stores
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Summary: This company operates a chain of more than 8,100 retail discount stores in 46 states across the U.S.
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Page 13 of 14
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Factual Stock Report | July 8, 2015
Family Dollar Stores Inc. (FDO) NYS
GICS Sector: Consumer Discretionary
Sub-Industry: General Merchandise Stores
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Summary: This company operates a chain of more than 8,100 retail discount stores in 46 states across the U.S.
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