99¢ Only Stores (NDN) continues to see sales increase as cash-strapped consumers pinch every penny.
Company Description
99¢ Only Stores runs 276 stores in the South West, mostly in California, targeting cash-strapped consumers. The stores are filled with name-brand foods.
Same-Store Sales Up
On July 8 99¢ Only Stores reported a 2.7% increase in same-store sales for the fiscal second quarter. Total sales rose to just under $347 million. Both customer transactions and average ticket price improved.
The company also said they expect increase the store count by 5% by the end of this fiscal year.
Estimates Rise
In the past 2 months the full-year consensus estimates for fiscal 2011 and 2012 are both up. This year’s average projection for 99¢ Only Stores is $1.01, up 9 cents.
Next year’s forecasts are averaging $1.14, up 7 cents. If 99¢ Only Stores can meet these expectations, the year-over-year growth rates will be 12% and 13%, respectively.
The conference call for quarterly earnings is scheduled for Aug 4.
Nice Valuations
Shares of NDN are trading around 15 times forward earnings and with a PEG just under 1. Its price to book is ahead of its peers at 1.8 times, compared to the industry average of 2.4 times.
The Chart
99¢ Only Stores is no stranger to volatility, but the earnings estimate have been rising consistently. Consumers struggling on the heels of the recession are still reluctant to ramp up spending as unemployment and double-dip fears are prominent.
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