New Economy: Dollar Stores Becoming The Next Wal-Mart (FDO, DG, DLTR, NDN, WMT)

Today may seem like a poor example of growth and sector dominance when you consider that the news catalyst has a shadow over its peers. Family Dollar Stores Inc. FDO beat earnings, but its shares are lower after issuing lackluster guidance. This is acting as drag on Dollar General Corp. DG, and it is having a muted reaction in Dollar Tree, Inc. DLTR, and 99¢ Only Stores NDN is actually having a green day. Wal-Mart Stores Inc. WMT might argue against this notion, but the trend of the current economy is that dollar stores could actually become (or may have already become) the next Wal-Mart. Family Dollar Stores Inc. FDO reported that quarterly earnings rose 19% and were $0.77 EPS, which beat Thomson Reuters by $0.01; and revenue rose by over 8% to $1.9 billion, which met estimates. The dollar store chain also said that sales strength continued into June with same store sales showing a 5.5% gain. The company sees 5% to 7% sales growth this quarter, but the problem came when it projected a profit view below analyst estimates. The company also said that it anticipates further caution from shoppers. Family Dollar shares are down over 8% at $36.11 on over 11 million shares so far today. Interestingly enough, S&P’s equity research just raised the stock to Buy from Hold after earnings. To read the rest, head over to 247WallStreet.com