Family Dollar (FDO) Plunges

Shares of Family Dollar (FDO) plunged today after the discount chain reported earnings. Family Dollar saw its earnings increase 19% posting earnings of $104.4 million dollars. Sales increased 8% for the quarter and same store sales were up 7%. So, why did the stock drop? Family Dollar guided down for the current quarter expecting earnings to come in between 46 cents and 51 cents. Investors were clearly disappointed and the stock sold off heavy. Shares dropped from $40 to $36. The stock ended the day at $36.36. This was on a day when all 30 Dow components were up and the market rallied big time. Family Dollar would have really gotten clobbered if the Dow was not up over 200 points today. Shares of Family Dollar look reasonably valued with a P/E ratio of 12 and a growth rate of 13.5.