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article imageCostco and Family Dollar better than expected

By Joe Gullo     Oct 7, 2009 in Business
In these rough economic times there is some good news for Family Dollar Stores Inc and Costco Wholesale Corp. Both of these companies have reported better-than-expected quarterly profits Wednesday.
Sales have improved during the month of September at these outlets. This news is boosting investor confidence in the discount retail sector.
Joseph Feldman from Telsey Advisory Group told Reuters, "We're not out of the woods yet. Sequentially (sales) continue to get gradually better."
Shares of Costco rose 2.6 percent in early trading, while Family Dollar gained 2.7 percent.
Quarterly profits did fall slightly, but not as much as Wall Street expected. This can be attributed to shoppers cutting back and trying to save money in these tough economic times.
Robert W. Baird & Co analyst Peter Benedict believe Costco's success can be attributed to better cost controls and declines in interest expense and its tax rate.
Family Dollar reported a 13 percent rise in quarterly profit as frugal shoppers sought low prices at its stores.
Howard Levine told Reuters in a statement, "We believe that the current consumer focus on saving money will remain strong in 2010."
Family Dollar is expecting its net sales to rise 5 percent to 7 percent, with same-store sales up 3 percent to 5 percent. Family Dollar is also planning to open 200 new stores.
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