Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 29, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-6807
FAMILY DOLLAR STORES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 56-0942963
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. Box 1017, 10401 Old Monroe Road
Charlotte, North Carolina 28201-1017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 704-847-6961
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at March 31, 1996
Common Stock, $.10 par value 56,827,862 shares
<PAGE>
FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES
INDEX
Page No.
Part I - Financial Information
Item 1 - Consolidated Condensed Financial Statements:
Consolidated Condensed Balance Sheets -
February 29, 1996 and August 31, 1995 2
Consolidated Condensed Statements of Income -
Three Months Ended February 29, 1996 and
February 28, 1995 3
Consolidated Condensed Statements of Income -
Six Months Ended February 29, 1996 and
February 28, 1995 4
Consolidated Condensed Statements of Cash Flows -
Six Months Ended February 29, 1996 and
February 28, 1995 5
Notes to Consolidated Condensed Financial
Statements 6-7
Computation of Net Income per Common Share -
Note 7 7
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8-10
Part II - Other Information and Signatures
Item 4 - Submission of Matters to a Vote of
Security Holders 11
Item 6 - Exhibits and Reports on Form 8-K 11
Signatures 11
<PAGE>
<TABLE>
FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
<CAPTION>
February 29, August 31,
1996 1995
Assets
<S> <C> <C>
Current assets:
Cash and cash equivalents (Note 2) $ 18,237,748 $ 8,852,631
Merchandise inventories 446,872,994 443,445,448
Deferred income taxes 17,069,749 16,415,749
Prepayments and other current assets 7,593,375 6,315,880
Total current assets 489,773,866 475,029,708
Property and equipment, net 166,378,061 156,640,224
Other assets 3,966,669 4,563,835
$660,118,596 $636,233,767
<PAGE>
<CAPTION>
Liabilities and Shareholders' Equity
<S> <C> <C>
Current liabilities:
Notes payable (Note 3) $ 19,500,000 $ -
Accounts payable and accrued
liabilities 193,479,468 207,970,292
Income taxes payable 1,665,366 2,387,562
Total current liabilities 214,644,834 210,357,854
Deferred income taxes 18,335,325 18,125,325
Contingencies (Note 4)
Shareholders' equity (Notes 5 and 7):
Preferred stock, $1 par; authorized
and unissued 500,000 shares
Common stock, $.10 par;
authorized 120,000,000 shares;
issued 60,280,684 shares at
February 29, 1996 and 60,196,664
shares at August 31, 1995 6,028,068 6,019,666
Capital in excess of par 16,640,137 15,774,431
Retained earnings 415,819,500 397,305,759
438,487,705 419,099,856
Less common stock held in treasury,
at cost (3,452,822 shares at
February 29, 1996 and August 31, 1995 -
Note 7) 11,349,268 11,349,268
Total shareholders' equity 427,138,437 407,750,588
$660,118,596 $636,233,767
See notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
Three Months Ended
February 29, February 28,
1996 1995
<S> <C> <C>
Net sales $448,274,071 $420,926,957
Costs and expenses:
Cost of sales 308,309,244 288,458,588
Selling, general and
administrative expenses
(Note 6) 113,925,083 104,594,181
422,234,327 393,052,769
Income before provision
for taxes on income 26,039,744 27,874,188
Provision for taxes on income 10,103,000 10,834,000
Net income $ 15,936,744 $ 17,040,188
Net income per common share
(Note 7) $0.28 $0.30
Dividends per common share $0.11 $0.10
Weighted average number of
common shares outstanding (Note 7) 56,815,800 56,691,422
See notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
Six Months Ended
February 29, February 28,
1996 1995
<S> <C> <C>
Net sales $844,438,630 $777,219,156
Costs and expenses:
Cost of sales 567,262,731 517,399,762
Selling, general and
administrative expenses (Note 6) 227,431,386 206,478,818
794,694,117 723,878,580
Income before provision for
taxes on income 49,744,513 53,340,576
Provision for taxes on income 19,300,000 20,714,000
Net income $ 30,444,513 $ 32,626,576
Net income per common share (Note 7) $0.54 $0.58
Dividends per common share $0.21 $0.185
Weighted average number of
common shares outstanding (Note 7) 56,791,251 56,645,019
See notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Six Months Ended
February 29, February 28,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $30,444,513 $32,626,576
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 11,962,247 10,866,908
Deferred income taxes (444,000) (1,720,000)
Loss on disposition of property
and equipment 151,716 8,467
Changes in operating assets and liabilities:
Inventories (3,427,546) 15,301,992
Income tax refund receivable - 4,569,686
Prepayments and other current assets (1,277,495) (330,872)
Other assets 597,166 322,052
Accounts payable and accrued
liabilities (15,067,313) (9,117,109)
Income taxes payable (722,196) 3,397,396
22,217,092 55,925,096
Cash flows from investing activities:
Capital expenditures (22,798,127) (14,691,037)
Proceeds from dispositions of
property and equipment 946,327 426,868
(21,851,800) (14,264,169)
Cash flows from financing activities:
Net notes payable borrowings (repayments) 19,500,000 (12,300,000)
Exercise of employee stock options 874,108 1,014,745
Payment of dividends (11,354,283) (9,629,060)
9,019,825 (20,914,315)
Net change in cash and cash equivalents 9,385,117 20,746,612
Cash and cash equivalents at beginning
of period 8,852,631 9,882,533
Cash and cash equivalents at end of period $18,237,748 $30,629,145
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 399,732 $ 519,738
Income taxes 20,300,781 14,217,318
See notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited
consolidated condensed financial statements contain all
adjustments (consisting of only normal recurring accruals)
necessary to present fairly the financial position as of
February 29, 1996, and the results of operations for the three
and six months ended February 29, 1996, and February 28, 1995,
and the cash flows for the six months ended February 29, 1996,
and February 28, 1995.
The results of operations for the six month period ended
February 29, 1996, are not necessarily indicative of the
results to be expected for the full year.
2. The Company considers all highly liquid investments with a
maturity of three months or less to be "cash equivalents."
3. The Company has two unsecured bank lines of credit for
short-term revolving borrowings of up to $50,000,000 each, or
$100,000,000 of total borrowing capacity. The lines of credit
expired on February 28, 1996 and February 13, 1996,
respectively, and both lines of credit have been extended
through June 19, 1996. The Company expects that both lines of
credit will be renewed. Borrowings under these lines of credit
are at a variable interest rate equal to the lower of the
bank's prime interest rate minus one-half percent or a rate
based on short-term market interest rates. The Company may
convert up to $50,000,000 of one of the lines of credit into
either a five, seven, or nine year term loan, at the bank's
variable prime rate.
4. The Internal Revenue Service has examined the Company's
consolidated 1993 and 1994 federal income tax returns and has
rendered an initial report and assessment as a result of the
examination. The Company is in the process of appealing the
findings of the report. Although the ultimate outcome of this
matter cannot presently be determined, the Company believes
that any impact on its financial statements will not be
material.
5. The Company's non-qualified stock option plans provide for the
granting of options to key employees to purchase shares of
common stock at prices not less than the fair market value on
the date of grant. Options expire five years from the date of
grant and are exercisable to the extent of 40% after the second
anniversary of the grant and an additional 30% at each of the
following two anniversary dates on a cumulative basis. All
shares available for option as of February 29, 1996, were
issuable under the current plan which expires in November 1998,
covering a maximum of 2,200,000 shares.
<PAGE>
<TABLE>
The following is a summary of transactions uner the plans during the
six months ended February 29, 1996 and February 28, 1995.
<CAPTION>
Six Months Ended
February 29, 1996 February 28, 1995
Number of Number of
shares Option price shares Option price
under option per share under option per share
<S> <C> <C> <C> <C>
Outstanding-beginning 1,114,960 $ 5.88-$21.25 951,290 $ 5.13-$21.25
Granted 17,150 $11.50-$18.75 345,350 $10.25-$13.00
Exercised (84,020) $ 5.88-$17.25 (128,690) $ 5.13-$ 5.88
Cancelled (40,790) (50,110)
Outstanding-ending 1,007,300 $10.00-$21.25 1,117,840 $ 5.88-$21.25
At February 29, 1996, options to purchase 446,205 shares were exercisable
at prices ranging from $10.00 to $21.25 per share, and at February 28,
l995, options to purchase 387,020 shares were exercisable at prices
ranging from $5.88 to $21.25 per share.
</TABLE>
6. Interest expense for the six months ended February 29, 1996, was
$512,076 and for the six months ended February 28, 1995, was
$459,548.
7. Net income per common share is based on the weighted average number
of shares outstanding during each reporting period. Exercise of
outstanding stock options would have no material dilutive effect
on net income per common share.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Company's working capital increased by $10,457,178, from
$264,671,854 at August 31, 1995 to $275,129,032 at February 29, 1996.
The principal source of new working capital continued to be the
reinvestment of a significant portion of the earnings of the Company.
Changes in working capital components during the first six months of
fiscal 1996 included a decrease in accounts payable and accrued
liabilities and an increase in short-term notes payable as the
Company made payments in accordance with trade terms for merchandise
purchased prior to Christmas. Changes in working capital components
during the first six months of fiscal 1995 included a decrease in
merchandise inventories as the Company purchased less apparel
merchandise in anticipation of continued weakness in apparel sales
and purchased lower price point apparel as part of the price
reduction program that was substantially implemented by the
first quarter of fiscal 1995.
Capital expenditures for the six months ended February 29, 1996
were approximately $22,800,000, and are currently planned to be
approximately $45 million for fiscal 1996. The majority of capital
expenditures for fiscal 1996 is related to the Company's retail store
expansion program and to the expansion of the West Memphis, Arkansas
distribution center which is planned to be completed in the fourth
quarter of fiscal 1996. In fiscal 1996, the Company plans to open
approximately 255 stores and close approximately 55 stores for a net
addition of approximately 200 stores, compared with the opening of
213 stores and closing of 12 stores for a net addition of 201 stores
in fiscal 1995. All stores opening in fiscal 1996 have a new
interior layout featuring wider aisles, lower fixtures and updated
signage. In addition to all new stores opening in this layout,
twelve existing stores were remodeled last fall and the Company is
pleased with the sales increases. Up to approximately 250 of the
Company's existing stores are expected to be remodeled or refurbished
with some or all of the features of the new layout between April and
the end of the fiscal year on August 31, 1996. The Company occupies
most of its stores under operating leases. New store opening,
closing, remodeling and refurbishing plans, as well as overall
capital expenditure plans, are continuously reviewed and are subject
to change depending on developments in the economy and other factors.
<PAGE>
RESULTS OF OPERATIONS
NET SALES
Net sales increased 6.5% in the quarter ended February 29, 1996,
as compared with the quarter ended February 28, 1995, and increased
8.7% in the six month period ended February 29, 1996, as compared
with the six month period ended February 28, 1995. The increases
were primarily attributable to increased sales from new stores opened
as part of the Company's store expansion program. Sales in existing
stores decreased 0.6% in the quarter ended February 29, 1996, as
compared with the same period ended February 28, 1995, and increased
1.2% in the six month period ended February 29, 1996, as compared to
the six month period ended February 28, 1995. Sales in the second
quarter of fiscal 1996 were negatively impacted by a reduction in
advertising and promotions in connection with the implementation of
the price reduction program and the everyday low price strategy. One
advertising circular that had been distributed in the last week of
December 1994 and the first week of January 1995 was eliminated, and
the remaining circulars distributed in December 1995 were less
promotional than those distributed in December 1994. In the highly
promotional retail sales environment that existed in December 1995,
the Company's less promotional approach did not attract the same
positive customer response to the everyday low price strategy that
the Company had experienced in prior months. Partially offsetting
the impact of the less promotional approach was the fact that
February 1996 contained 29 days compared to 28 days in February 1995,
and the Company estimates that this extra day aided total and
existing store sales by approximately 1% in the second quarter ended
February 29, 1996. Sales of hardlines merchandise continued to be
stronger than sales of softlines (primarily apparel and shoes).
Hardlines as a percentage of total sales increased to approximately
65% in the second quarter of fiscal 1996 compared to approximately
63% in the second quarter of fiscal 1995, and increased to
approximately 64% in the first six months of fiscal 1996 compared to
approximately 62% in the first six months of fiscal 1995. While the
Company is generally pleased with customer response to its everyday
low price strategy in hardlines, the response in softlines has been
disappointing. The Company intends to continue to place more
emphasis on lower priced basic apparel and on closeout and other
opportunistic purchases of apparel that offer values to the Company's
low and low-middle income customer base. Also, the new interior
store layout referred to in "Financial Condition" above offers a more
efficient fixture layout for softlines, allowing the Company to
reduce the space allocated to softlines without appreciably reducing
the selection of apparel. This space is now available for
promotional and seasonal goods as well as new hardlines categories of
merchandise that are being tested.
The average number of stores open during the first six months of
fiscal 1996 was 8.2% more than during the six months of fiscal 1995.
The Company had 2,488 stores in operation at February 29, 1996, as
compared with 2,327 stores in operation at February 28, 1995,
representing an increase of approximately 6.9%.
<PAGE>
COST OF SALES
Cost of sales increased 6.9% in the quarter ended February 29,
1996, as compared with the quarter ended February 28, 1995, and
increased 9.6% in the six months ended February 29, 1996, as compared
to the six months ended February 28, 1995. These increases primarily
reflected the additional sales volume between years. Cost of sales,
as a percentage of net sales, was 68.8% in the quarter ended February
29, 1996, compared with 68.5% in the quarter ended February 28, 1995,
and was 67.2% in the six months ended February 29, 1996, compared
with 66.6% in the six months ended February 28, 1995. The increases
in the cost of sales percentage for the quarter and six months ended
February 29, 1996, were due primarily to the continuing effect of the
merchandise price reductions that were taken as part of the expansion
of the price reduction program and shift toward an everyday low price
strategy. The Company expects that the effect of the price reduction
program on the comparability of the cost of sales percentages will be
less in the second half of fiscal 1996 as by the second half of
fiscal 1996 the Company will have passed the one-year anniversary of
the substantial implementation of the program. The shift in the
sales mix more toward hardlines merchandise referred to in "Net
Sales" above also contributed to the increases in the cost of sales
percentages, as hardlines typically carry a lower gross margin than
softlines. Also merchandise shrinkage losses and freight costs as a
percentage of net sales were slightly higher during the quarter and
six months ended February 29, 1996, versus the comparable periods
last year.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased 8.9% in
the quarter ended February 29, 1996, as compared with the quarter
ended February 28, 1995, and increased 10.1% in the six months ended
February 29, 1996, as compared with the six months ended February 28,
1995. The increases in these expenses were due primarily to
additional costs arising from the continued growth in the number of
stores in operation. Selling, general and administrative expenses,
as a percentage of net sales, were 25.4% in the quarter ended
February 29, 1996, as compared with 24.8% in the quarter ended
February 28, 1995, and were 26.9% in the six months ended February
29, 1996, as compared with 26.6% in the six months ended February 28,
1995. The increases in the percentages for the quarter and six
months ended February 29, 1996 were due in part to increases in
distribution facility expenses, employee medical benefits expenses
and incentive compensation accruals. These increases were partially
offset by a decrease in advertising expenses as the Company
eliminated an advertising circular in the second quarter of fiscal
1996 that had been distributed in the last week of December 1994 and
the first week of January 1995.
<PAGE>
PROVISION FOR TAXES ON INCOME
The provision for taxes on income for the quarter ended
February 29, 1996, decreased 6.8% as compared with the quarter
ended February 28, 1995, and decreased 6.8% in the six months ended
February 29, 1996, as compared with the six months ended February 28,
1995. The variance between the periods is primarily due to the
decrease in income before the provision for income taxes. The
effective tax rate was 38.8% for the quarter ended February 29, 1996,
as compared to 38.9% for the quarter ended February 28, 1995, and
was 38.8% for both the six months ended February 29, 1996, and
February 28, 1995.
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Stockholders of the Company held
on January 18, 1996, stockholders voted to:
(a) Elect to the Board of Directors of the Company the
six nominees named in the Proxy Statement for the
Annual Meeting as follows:
<TABLE>
<CAPTION>
Shares Shares Withholding
Nominee Voting For Authority to Vote
<S> <C> <C>
Leon Levine 53,329,413 321,948
John D. Reier 53,333,553 317,808
George R. Mahoney, Jr. 53,333,933 317,428
Thomas R. Payne 53,311,063 340,298
Mark R. Bernstein 52,459,543 1,191,818
James H. Hance, Jr. 52,399,390 1,251,971
</TABLE>
(b) Ratify the action of the Board of Directors in selecting Price
Waterhouse LLP as independent accountants to audit the consolidated
financial statements of the Company and its subsidiaries for the
year ending August 31, 1996, with 53,570,510 shares voted for,
20,724 shares against and 60,127 shares abstaining.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits filed herewith:
11 Statements Re: Computations of Per Share Earnings
(b) Reports on Form 8-K - None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
.
FAMILY DOLLAR STORES, INC.
(Registrant)
Date: April 8, 1996 JOHN D. REIER
JOHN D. REIER
(President)
Date: April 8, 1996 C. MARTIN SOWERS
C. MARTIN SOWERS
(Senior Vice President-Finance)
Date: April 8, 1996 KENNETH T. SMITH
KENNETH T. SMITH
(Vice President-Controller
Principal Accounting Officer)
<TABLE>
<CAPTION>
EXHIBIT 11
PAGE 1 of 2
FAMILY DOLLAR STORES, INC.
STATEMENT RE COMPUTATIONS OF PER SHARE EARNINGS
THREE MONTHS ENDED THREE MONTHS ENDED
FEBRUARY 29, 1996 FEBRUARY 28, 1995
PRIMARY FULLY DILUTED PRIMARY FULLY DILUTED
AS PRESENTED
<S> <C> <C> <C> <C>
AVERAGE SHARES OUTSTANDING FOR
THE THREE MONTHS ENDED 56,815,800 56,815,800 56,691,422 56,691,422
NET INCOME $15,936,744 $15,936,744 $17,040,188 $17,040,188
EARNINGS PER SHARE $ .28 $ .28 $ .30 $ .30
PRO FORMA DILUTION IMPACT OF COMMON STOCK EQUIVALENTS
ADDITIONAL WEIGHTED AVERAGE
SHARES FROM ASSUMED EXERCISE AT
THE BEGINNING OF THE YEAR OF
DILUTIVE STOCK OPTIONS 413,897 414,230 228,460 328,010
WEIGHTED AVERAGE SHARES ASSUMED
REPURCHASED FROM ASSUMED PROCEEDS
OF EXERCISES USING TREASURY STOCK
METHOD (AVERAGE MARKET PRICE FOR
PRIMARY AND, IF GREATER, ENDING
MARKET PRICE FOR FULLY DILUTED) (392,583) (383,125) (176,886) (269,381)
<PAGE>
<CAPTION>
<S> <C> <C> <C> <C>
NET PRO FORMA COMMON STOCK
EQUIVALENT INCREMENTAL SHARES 21,314 31,105 51,574 58,629
PERCENTAGE DILUTION FROM PRO FORMA
COMMON STOCK EQUIVALENT
INCREMENTAL SHARES 0.04% 0.05% 0.09% 0.10%
TOTAL COMMON STOCK AND COMMON
STOCK EQUIVALENTS 56,837,114 56,846,905 56,742,996 56,750,051
NET INCOME $15,936,744 $15,936,744 $17,040,188 $17,040,188
PRO FORMA EARNINGS PER SHARE (INCLUDING
DILUTIVE COMMON STOCK EQUIVALENTS) $ .28 $ .28 $ .30 $ .30
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 11
PAGE 2 OF 2
FAMILY DOLLAR STORES, INC.
STATEMENT RE COMPUTATIONS OF PER SHARE EARNINGS
SIX MONTHS ENDED SIX MONTHS ENDED
AS PRESENTED FEBRUARY 29, 1996 FEBRUARY 28, 1995
PRIMARY FULLY DILUTED PRIMARY FULLY DILUTED
<S> <C> <C> <C> <C>
AVERAGE SHARES OUTSTANDING FOR THE
SIX MONTHS ENDED 56,791,251 56,791,251 56,645,019 56,645,019
NET INCOME $30,444,513 $30,444,513 $32,626,576 $32,626,576
EARNINGS PER SHARE
$ .54 $ .54 $ .58 $ .58
PRO FORMA DILUTION IMPACT OF COMMON STOCK EQUIVALENTS
ADDITIONAL WEIGHTED AVERAGE SHARES FROM
ASSUMED EXERCISE AT THE BEGINNING
OF THE YEAR OF DILUTIVE STOCK OPTIONS 434,447 434,447 231,465 288,257
WEIGHTED AVERAGE SHARES ASSUMED REPURCHASED FROM
ASSUMED PROCEEDS OF EXERCISES USING TREASURY STOCK
METHOD (AVERAGE MARKET PRICE FOR PRIMARY AND, IF
GREATER, ENDING MARKET PRICE FOR FULLY DILULTED) (374,206) (374,099) (171,399) (218,323)
NET PRO FORMA COMMON STOCK
EQUIVALENT INCREMENTAL SHARES 60,241 60,348 60,066 69,934
PERCENTAGE DILUTION FROM PRO FORMA COMMON
STOCK EQUIVALENT INCREMENTAL SHARES 0.11% 0.11% 0.11% 0.12%
TOTAL COMMON STOCK AND COMMON
STOCK EQUIVALENTS 56,851,492 56,851,599 56,705,085 56,714,953
NET INCOME $30,444,513 $30,444,513 $32,626,576 $32,626,576
PRO FORMA EARNINGS PER SHARE (INCLUDING DILUTIVE
COMMON STOCK EQUIVALENTS) $ .54 $ .54 $ .58 $ .58
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF FAMILY DOLLAR STORES, INC.
AND SUBSIDIARIES FOR THE QUARTER ENDED FEBRUARY 29, 1996, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000034408
<NAME> FAMILY DOLLAR STORES, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-START> SEP-01-1995
<PERIOD-END> FEB-29-1996
<EXCHANGE-RATE> 1
<CASH> 18,237,748
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 446,872,994
<CURRENT-ASSETS> 489,773,866
<PP&E> 279,319,950
<DEPRECIATION> 112,941,889
<TOTAL-ASSETS> 660,118,596
<CURRENT-LIABILITIES> 214,644,834
<BONDS> 0
0
0
<COMMON> 6,028,068
<OTHER-SE> 421,110,369
<TOTAL-LIABILITY-AND-EQUITY> 660,118,596
<SALES> 844,438,630
<TOTAL-REVENUES> 844,438,630
<CGS> 567,262,731
<TOTAL-COSTS> 794,694,117
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 49,744,513
<INCOME-TAX> 19,300,000
<INCOME-CONTINUING> 30,444,513
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 30,444,513
<EPS-PRIMARY> .54
<EPS-DILUTED> .54
</TABLE>
