Q2 2013 Earnings Call Transcript

Transcript Call Date 04/10/2013

Operator: Good morning. My name is Jessica, and I'll be your conference facilitator today. I would like to welcome everyone to the Family Dollar Earnings Conference Call.

All lines have been placed on mute to prevent any background noise. Today's call is being recorded. After the Company's prepared remarks, there will be a brief question-and-answer period. The question-and-answer queue will not be available until after the Company has concluded their prepared remarks. So, please wait until after the speakers have finished their remarks before attempting to enter the queue.

I would now like to introduce Ms. Kiley Rawlins, Vice President of Investor Relations and Communications. Ms. Rawlins, you may begin your conference.

Kiley F. Rawlins - VP, IR and Communications: Thank you, Jessica and good morning, everyone. Thank you for joining us today. Before we begin, you should note that our comments today will include forward-looking statements regarding various operating initiatives, sales and profitability metrics, and capital expenditures, as well as our expectations for future financial performance. While these statements address plans or events, which we expect will or may occur in the future, a number of factors, as set forth in our SEC filings and press releases, could cause actual results to differ from our expectations.

We refer you to and specifically incorporate the cautionary and risk statements contained in today's press release and in our SEC filings. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today, April 10, 2013. We have no obligation to update or revise our forward-looking statements except as required by law, and you should not expect us to do so.

Our call today will begin with some opening comments from Howard Levine, Chairman and CEO; then Mary Winston, CFO, will review our financial results for the second quarter of fiscal 2013 and our outlook for the rest of the year; then Mike Bloom, President and COO, will share an operational update. Following our prepared comments, you will have an opportunity to ask questions. In consideration of others on the call, please limit your time to one question and one follow-up question, if necessary.

Now, I'd like to turn the call over to Howard Levine. Howard?

Howard R. Levine - Chairman and CEO: Thanks, Kiley, and good morning, everyone. This morning we reported that earnings per share in the second quarter increased 5.2% to a $1.21 and the comparable store sales increased 2.9%. Our investments to drive trips and become more relevant to our customers continue to deliver results. More customers are visiting their local Family Dollar for great values on their basic needs as evidenced by our double-digit market share gains in consumables over the last 12, 26 and 52-week periods. Maintaining our strong value image is paramount as our customers balance their finances during these uncertain times. We know from our customer survey that our price and value perception remain strong. Similar to other retailers, a confluence of factors pressuring our customers discretionary spends, led to sales volatility during the quarter. Whether it's the payroll tax increase, tax refund delay, gas prices or difficult weather comparisons, all of these factors make near-term trends difficult to predict. The unforeseen income tax refund delay had a particularly large impact on the business in late January and early February, but we saw sales trends improve as the tax refund started to make their way into our customer's wallets.

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