Family Dollar Stores (FDO), the operator of chain of self-service retail discount stores, has reported a 1.48 percent fall in profit for the quarter ended May 30, 2015. The company has earned $79.94 million, or $0.70 a share in the quarter, compared with $81.15 million, or $0.71 a share for the same period last year. Revenue during the quarter went up marginally by 2.60 percent to $2,728.18 million from $2,658.96 million in the previous year period. Gross margin for the quarter expanded 26 basis points over the previous year period to 34.57 percent. Total expenses were 95.37 percent of quarterly revenues, down from 95.46 percent for the same period last year. This has led to an improvement of 9 basis points in operating margin to 4.63 percent.
Operating income for the quarter was $126.28 million, compared with $120.81 million in the previous year period.
Operating cash flow improves significantly
Family Dollar Stores has generated cash of $342.64 million from operating activities during the nine month period, up 35.43 percent or $89.64 million, when compared with the last year period. The company has spent $220.91 million cash to meet investing activities during the nine month period as against cash outgo of $260.40 million in the last year period. It has incurred net capital expenditure of $251.38 million on net basis during the nine month period, down 18.02 percent or $55.24 million from year ago period.
The company has spent $45.58 million cash to carry out financing activities during the nine month period as against cash inflow of $30.13 million in the last year period. It has made net debt repayment of $16.20 million. It has raised net of $19.18 million by selling common stocks.
Cash and cash equivalents stood at $215.99 million as on May 30, 2015, up 31.92 percent or $52.26 million from $163.73 million on May 31, 2014.
Working capital increases sharply
Family Dollar Stores has recorded an increase in the working capital over the last year. It stood at $1,007.39 million as at May 30, 2015, up 27.62 percent or $218.01 million from $789.38 million on May 31, 2014. Current ratio was at 1.87 as on May 30, 2015, up from 1.61 on May 31, 2014.
Cash conversion cycle (CCC) has decreased to 26 days for the quarter from 49 days for the last year period. Days sales outstanding were almost stable at 1 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 42 days for the quarter compared with 85 days for the previous year period. At the same time, days payable outstanding went down to 16 days for the quarter from 37 for the same period last year.
Debt comes down significantly
Family Dollar Stores has recorded a decline in total debt over the last one year. It stood at $484.34 million as on May 30, 2015, down 37.62 percent or $292.05 million from $776.39 million on May 31, 2014. Total debt was 12.31 percent of total assets as on May 30, 2015, compared with 19.59 percent on May 31, 2014. Debt to equity ratio was at 0.26 as on May 30, 2015, down from 0.47 as on May 31, 2014. Interest coverage ratio improved to 18.58 for the quarter from 15.18 for the same period last year.
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