Thoughts on discount chains
On Monday, April 18, Cynthia Scott of OMC Financial Services had an update on discount chain retailers, and whether they will continue to rack up profits because of high gas prices and unemployment. To consider if you're thinking of investing in them:
- These chain stores offer products at extreme discounts and serve the bargain shopper
- Family Dollar’s profit grew by 23% in the last quarter; it earned 7.2 cents for every dollar of sales
- Dollar Tree’s profit grew by 28% in the last quarter; it earned 11.2 cents for every dollar of sales
- Other chains stores with growing earnings are 99 Cents Only Stores, Dollar General and Big Lots
- There is a lot of interest in private equity companies to purchase this area of retail because of chain stores’ profitability.
