Making Sense of 'Dollar Stores'
Declining Sales and Competition
From Big Retailers Lead Some
To Think Growth Has Hit a Peak
The red-hot growth of "dollar stores" is cooling.
In recent years, these stores have sprouted like wildflowers as customers and investors alike embraced the novelty of stores pitching everything from candy to apparel at prices as low as 99 cents. The number of dollar stores operated by publicly traded companies jumped nearly 50% to 17,000 since 2001, according to a Citigroup Inc. analysis.
But this year has brought a slowdown as the stores face tougher competition from traditional retailers such as Target Corp. and grocery chains, which have added dollar aisles and made other tweaks. At the same time, dollar-store customers have felt their wallets pinched by soaring prices at the gasoline pump.
The result: The dollar-store industry's same-store sales -- a key measure of year-over-year sales growth at stores open at least a year -- tumbled to an average rate of 0.4% in the first half of this fiscal year, down from 1.4% for all of 2004 and 4.1% as recently as 2003, according to SunTrust Robinson Humphrey analyst Patrick McKeever.
Market-research firm Retail Forward predicts that the industry's overall sales -- from new and older stores -- will slip to average annual growth of 5.4% over the next five years from 6.2% in the past five.
The slowdown signals that dollar stores are entering a new phase. As its rapid momentum slows, the industry must draw more of its growth from improving the performance of its existing stores. "I wouldn't yet characterize the [industry] as mature -- but probably at the peak of its growth cycle and on the cusp of maturity," said Sandra Skrovan, a Retail Forward vice president.
Investors have mostly voted with their feet so far. Share prices of Fred's Inc. have swooned to $12.04 at yesterday's close on the Nasdaq Stock Market from around $30 in early 2004. The stock of 99 Cents Only Stores sunk to $10.11 a share on the New York Stock Exchange from the high $20s in the same span. Dollar Tree Stores Inc. closed at $22.97 yesterday on Nasdaq, down from the low $30s. Family Dollar Stores Inc. closed yesterday on the Big Board at $20.49 a share, down from the high $30s. Even the industry's largest and strongest company, Dollar General Corp., has seen its stock price, which closed yesterday at $18.77, mostly flat since early 2004.
The news isn't getting any better. Some dollar-store operators revised their earnings-per-share forecasts late last month for their current fiscal year. Dollar Tree, of Chesapeake, Va., lowered its forecast to $1.57 to $1.66 from $1.77 to $1.87. Fred's, of Memphis, Tenn., which offers pharmaceuticals as well as discount goods, lowered its forecast to 74 to 79 cents from 84 to 89 cents due to high gasoline prices and cuts in its home state's Medicaid program.
"We expect our core customer's discretionary spending to continue to be pressured by high gasoline prices and unemployment," David Perdue, chairman and chief executive of Dollar General, told investors in an Aug. 25 conference call.
Some investors think that the selloff of dollar stores is overdone. They predict that the strongest companies will rebound once energy prices begin easing. "Some competitors are better positioned than others," said Adam Newar, managing director of hedge fund Eden Capital Management, which owns shares of Dollar General and Family Dollar.
He and other hedge-fund managers point to Dollar General's strong management, massive scope of 7,600 stores and diverse merchandise mix. More than half of Dollar General's sales are in food and consumables such as detergents, paper products and health and beauty aides. Profit margins are tighter on these items -- especially food -- but customers don't stop buying them when times get tough.
Many investors are less optimistic about the dollar-store chains that are locked into the lowest price points. They say the companies that exclusively offer goods for $1 or less -- namely Dollar Tree and 99 Cents Only -- will be challenged because they lack the flexibility in pricing to adapt to inflation and economic cycles. The $1 limit also precludes them from expanding significantly into the refrigerated-food offerings that are bolstering competitors Dollar General and Family Dollar.
Still, Eric Schiffer, chief executive of 99 Cents Only, said single-price companies will prosper with diverse merchandise mix and unique bargains. Among his company's 99-cent offerings are an assortment of food, including gourmet items, and name-brand merchandise. The Commerce, Calif., company sells three name-brand candy bars in a bundle for 99 cents while its peers often package only two together for $1, Mr. Schiffer said.
Despite the poor results, several dollar-store chains plan to continue their rapid expansion -- at least for this year. Dollar General, of Goodlettsville, Tenn., intends to open 730 stores this year, up from 620 last year. Family Dollar, of Matthews, N.C., opened 500 stores in its fiscal year ended Aug. 31, up from 439 in its previous year.
In contrast, Dollar Tree opted at the beginning of its current fiscal year to slow its expansion. While it traditionally planned to expand its total floor space by 20% each year, Dollar Tree opted for 14% to 16% growth this year. "We thought it was just time to take a big breath," Chief Executive Bob Sasser said.
The industry's slowdown will force Dollar Tree's peers to follow its lead in the next two or three years, analysts say. "It doesn't make much sense for these companies to be growing as aggressively given the environment overall," said SunTrust's Mr. McKeever. He rates Fred's a "buy" because he thinks selling pharmaceuticals puts it in a better position than other dollar stores. He sees the share price of Fred's hitting $19 within the next year. Mr. McKeever is "neutral" on most of the other major players. He doesn't own the stocks, though his company has provided financial services to various dollar-store chains, including Fred's.
“1元店”能否重振旗鼓？
2005年09月21日18:34
美国“1元店”公司的迅猛增长势头眼下正在降温。
近年来，这类商店像雨后春笋一样层出不穷，消费者和投资者都非常欢迎这些新奇的小店──在店里，经常只需99美分就能买到各种各样的物品，从糖果到服装应有尽有。花旗集团(Citigroup Inc.)的研究报告透露，自从2001年以来，上市公司经营的“1元店”数量猛增近50%，已经达到17,000家。
但Target Corp.等传统零售店以及各种连锁便利店也开始增添专门销售1元商品的区域或采取类似举措，这一市场的竞争态势开始加剧。今年至今，“1元店”开始出现下滑势头。此外，飞涨的油价也让“1元店”顾客感到钱包有点吃紧了。
据SunTrust Robinson Humphrey分析师帕特里克?麦克基沃(Patrick McKeever)提供的数据，本财政年度的上半年，“1元店”的同店销售额平均增幅降至0.4%，低于2004年全年的1.4%以及2003年的4.1%。同店销售额是零售业的一个重要指标，衡量开业至少一年的店铺的销售情况。
市场研究公司Retail Forward预计，如果不论开业多久，未来5年“1元店”的总体销售额增幅将从过去5年的6.2%降至5.4%。
上述迹象显示，“1元店”行业已经进入一个新阶段。随著快速增长动力的逐步放缓，该行业必须从改善已有店铺的业绩入手来实现增长。Retail Forward副总裁桑德拉?斯科文(Sandra Skrovan)说，她并不认为该行业已经成熟，但或许可以说，它已经处在增长循环的顶端，在成熟期的过渡点。
目前来看，投资者已经在用脚投票了。比如那斯达克市场Fred's Inc.的最新股价收在12.04美元，而2004年初时还是30美元左右。纽约证交所99 Cents Only Stores的股价也从同一时期的20多美元降到了10.11美元。
Dollar Tree Stores Inc.周一收盘从30多美元降至22.97美元；Family Dollar Stores Inc.从接近40美元降至20.49美元。该行业规模最大、实力最强的Dollar General Corp.自2004年初以来股价基本上表现平平，周一收于18.77美元。
坏消息不止于此。上个月底，一些“1元店”修订了本财年的每股收益预期。Dollar Tree就将预期从1.77-1.87美元下调至1.57-1.66美元。销售药品和折扣商品的Fred's将预期从84-89美分下调到74-79美分，归咎于汽油涨价以及其所在的田纳西州削减了联邦医疗保险(Medicaid)计划。
Dollar General董事长兼首席执行长戴维?波迪(David Perdue)在8月25日的电话会议上对投资者表示，预计消费者的可支配性收入会继续承受高油价和失业担忧的压力。
一些投资者认为，这类股票的下跌有点过头了。他们预计，一旦油价走势开始缓和，那些实力雄厚的公司股价将出现反弹。对冲基金公司Eden Capital Management的董事总经理亚当?纽沃(Adam Newar)说，该行业中有些公司的处境还比较好。该基金持有Dollar General和Family Dollar的股票。
他和一些对冲基金经理认为，Dollar General的优势在于强有力的管理层、广泛的地区分布以及品种丰富的商品组合。该公司在全美共有7,600家店铺，一半以上的销售收入来自食品，以及洗涤剂、纸制品、保健和美容用品等日常消费品。虽然这些商品的利润率较低，特别是食品，但即使经济状况再糟，消费者也不会减少这些商品的消费。
但许多投资者对这些价格锁定在低档区的连锁店却没这么乐观。他们说，只销售1美元以下商品的商店（也就是Dollar Tree和99 Cents Only这类商店）因为在定价方面缺乏灵活性、难以顺应形式变化而面临严峻挑战。1美元的价格限制还使它们不能增加需要冷藏的食品，而正是这类食品大大提升了Dollar General和Family Dollar的业绩。
不过，99 Cents Only首席执行长埃里克?希弗(Eric Schiffer)仍表示，以单一价格销售商品的商店可以凭藉丰富的品种和真正低廉的价格实现良好效益。在他们的商店里，以99美分销售的有多种食品（其中包括真正的美食）和一些品牌商品。比如有一款包括三块名牌糖块的包装只销售99美分，而他们的同行通常一个包装只有两块糖，价格也是1美元。
虽然业绩不佳，但仍有一些“1元店”计划迅速扩大业务，至少今年是这样。比如Dollar General就计划今年新开730家店铺，去年的数字是620家。Family Dollar在截至8月31日的财政年度新开了500家店铺，上财年的数字是439家。
而Dollar Tree在本财年开始的时候决定放慢扩张速度。一直以来它每年都会将营业面积扩大20%，但本财年的计划是14%-16%。首席执行长鲍伯?萨瑟(Bob Sasser)说，公司认为现在正是好好喘息一下的时候。
分析师表示，“1元店”行业增长放缓将使Dollar Tree的同行在未来两到三年内效仿塔的做法。SunTrust的麦克基沃说，从目前的总体形势来看，这些公司急速扩张并无太大意义。他将Fred's的评级定为买进，认为该公司的药品业务使其与其他“1元店”相比有独特优势。
他预计明年Fred's股价将达到19美元。麦克基沃对其他大多数“1元店”的股票评级都是中性。他不持有这类公司的股票，不过他所在的公司与一些“1元店”公司有金融服务业务往来，其中包括Fred's。
