Family Dollar FY 4Q14 Earnings Call Notes

posted in: Notes | 0

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha

Last FY was really difficult

” From a financial standpoint, fiscal ’14 was one of the most difficult years in our company’s history. Comp store sales declined 2.1% and earnings on an adjusted basis and excluding the extra week last year declined about 19%. While our long term positioning and growth prospects remain strong, our results were pressured on multiple fronts throughout the year.”

Discretionary purchases have continued to struggle

“While discretionary purchases continued to be constrained by economic pressures facing our customers, we’re encouraged by the recent sales trends in all three discretionary categories and we’re confident that we will carry this momentum into fiscal ’15 and deliver a stronger holiday season.”

Low income consumer still struggling

” Our core customer is still struggling. Low income is still not getting the jobs like higher income folks are and in fact some of the data we even questioned as so many people have dropped out of the job market but all that being said, we’re prepared for that.”

You have to manage the pace of change

” think we had a significant management change a few years ago and as part of that there were a lot of other changes and when you look at a business and you have management changes like that coming from different retailers with different ideas and thoughts and you know our effort to try to continue to improve our business, I think we got caught up in that a bit much and what I learned is when you have change like that you have to pace it, you have to think it through a little bit. ”

We do think we’re seeing some improvement in the last 90 days

“I actually think the last 90 days while we are not happy at all with the earnings that we posted that we are seeing improved results in our sales, we do think we’re getting traction in some of these other key metrics and obviously we’ve got work to do on the margin side of things and we think we’ve got the initiatives in place to begin to see stabilization of the margin effort out there.”

Everyone is trying to drive traffic

“Generally I would say pricing is fairly rational but it’s very competitive. I think my observations are that all retailers particularly those in the discount side are looking to drive traffic into their stores and the way retailers do that is by promoting consumables so you see a lot of great pricing in the laundry area for example, across our competitive front”