Three months ago, in reviewing the year that was for discount retailer Family Dollar
Jeremy got his wish, as gasoline prices dropped precipitously over the last few months, from staggeringly high to, well, at least slightly less expensive levels. Wednesday, we'll see whether Family Dollar was able to capitalize on the lower gas prices to turn its comparable sales figures around.
The company will report its fiscal Q1 2006 earnings numbers before the market opens, but analysts don't seem particularly interested in waking up early for this one. With profits per diluted share expected to come in $0.02 below last year's performance, the Wall Street suits are more likely to hit the snooze button and sleep in. One reason for the apathy and general downbeat mood on the earnings front: Although gas prices are down about 18% from three months ago, they're still up 12% from where they sat one year ago. With fuel costs still eating into the earnings power of discount shoppers, the feeling is that Family Dollar won't be able to show any growth in fiscal Q1.
You see, another fellow Fool, W.D. Crotty, noted last month that rival five-and-dimer Dollar General
Now I don't mean to say all dollar stores are the same, but it would be wrong to ignore the clear signs of a trend here. Across the board, dollar stores have experienced roughly 10% increases in sales versus the year-ago period. Across the board, they've either boosted earnings, or their profits have declined less than expected. It seems to me entirely possible, therefore, that Family Dollar will do one or the other Wednesday.
Fools, now is the time to open your hearts and wallets to worthy causes! Please support our five Foolish charities at www.foolanthropy.com .
Fool contributor Rich Smith does not own shares of any company named above.