Family Dollar to close 370 stores, cut prices on 1,000 items

A customer shops at a Family Dollar store in Sterling, Ill. (Daniel Acker / Bloomberg / March 27, 2012)

Family Dollar Stores Inc. said it would close 370 under-performing stores later this year and slash prices on 1,000 products after its profit for the second quarter plunged more than 30%.

The North Carolina discount retail chain, which has more than a dozen stores in the Los Angeles area, also said it would curb store openings in the next fiscal years to 350 to 400. The company planned to launch 525 new stores this year.

Family Dollar has 8,100 stores across the country.

The so-called strategic actions also include “reducing corporate overhead,” a move that will result in job cuts. The company said it hopes the effort will save $40 million to $45 million annually in operating costs.

Howard R. Levine, Family Dollar’s chief executive, said in a statement that “a more promotional competitive environment and a more financially constrained consumer” were partly to blame for the chain’s disappointing performance.

“Severe winter weather” also didn’t help, forcing stores to close and disrupting merchandise deliveries, he said.

During the second quarter, which ended March 1, Family Dollar revenue slid 6.1% to $2.7 billion. The chain, which competes with Dollar General Corp., 99 Cents Only and Dollar Tree Inc., said customers bought less often but spent more per transaction amid higher markups.

Net income tanked 34% to 80 cents a share, or $90.9 million, from $1.21 per share, or $140.1 million. Same-store sales at locations open at least a year dipped 3.8% -- a trend the company said it expects to continue in the third quarter.

Family Dollar stock was down 1.5%, or 89 cents, to $58.18 a share in morning trading in New York.

Source:

www.latimes.com

A customer shops at a Family Dollar store in Sterling, Ill. (Daniel Acker / Bloomberg / March 27, 2012)

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Boeing freezes pensions for 68,000 employees

Boeing says the move will curb the "unsustainable growth" of its long-term pension liability

US aerospace company Boeing has frozen defined-benefit pensions for 68,000 employees, including management and executives.

From January 2016, the funds paid out by new Boeing pensions will be market-dependent.

The switch affects non-unionised employees and follows a pension deal struck with unions in January.

Boeing said the move would curb the "unsustainable growth" of its long-term pension liability.

Pensions for most Boeing employees will move from defined benefits, such as a fixed final-salary scheme, to a defined contribution scheme from 1 January 2016.

People on the original scheme will receive benefits for contributions to the end of 2015, while benefits accrued from the beginning of 2016 will be under the new scheme.

The pension switch, which affects non-unionised employees, follows a deal that was narrowly accepted by unionised Boeing workers in Seattle in January.

Under the deal, workers voted to accept the change to their pensions as part of an agreement that Boeing would assemble 777X jets in Washington state.

Large US companies that have changed pension schemes to minimise costs include General Motors, which announced plans to reduce its pension burden by $26bn (£17bn) in June 2012.

News Source: www.bbc.com

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Macy's Grows 4Q Profits 11%, Weak January Drives Sales Miss

Macy’s (M) logged a better-than-expected 11% jump in fourth-quarter profits on Tuesday, but the department store’s sales missed targets as harsh winter weather kept shoppers away.

Shares of the retailer ticked lower in premarket action following the mixed quarterly report card.

Macy’s said it earned $811 million, or $2.16 per share, last quarter, compared with a profit of $730 million, or $1.83 a share, a year earlier.

Excluding one-time items, it earned $2.31 a share, topping forecasts from analysts for $2.17.

Revenue dipped 1.6% to $9.2 billion, trailing the Street’s view of $9.27 billion. Same-store sales increased 1.4% during the fourth quarter. Gross margins were flat at 40.6%, compared with estimates for a drop to 40.3%.

Macy’s acknowledged January sales fell more than the company had been bracing for due to “unusually harsh winter weather” across much of the U.S. The company said at one point or another 244 of its Macy’s and Bloomingdale’s stores were closed because of bad weather in January.

“Once warm spring weather arrives and our full assortment of fresh spring merchandise is in place, we believe customers will return to a more normalized pattern of shopping. But based on our experience in January and early February, we are watching business trends closely,” Macy’s CEO Terry Lundgren said in a statement.

Still, Macy’s reaffirmed its call for full-year EPS of $4.40 to $4.50 on same-store sales growth of 2.5% to 3%.

Shares of Cincinnati-based Macy’s fell 1.43% to $52.30 ahead of Tuesday’s opening bell.

News Source: www.foxbusiness.com/

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