MATTHEWS, N.C. — Investment funds affiliated with activist investor Nelson Peltz and his Trian Group have acquired a 6.58% stake in Family Dollar Stores and said they seek to improve the company's operating performance.
In a filing with the Securities and Exchange Commission yesterday, New York-based Trian Group, which has exerted its influence at H.J. Heinz Co., Arby's and Wendy's, among other companies, said it has met with Howard Levine, chairman and chief executive officer of Family Dollar, about driving shareholder value.
Trian "looks forward to working with [Family Dollar] on operating initiatives such as increasing sales per square foot to peer levels, improving the issuer’s operating leverage and optimizing the number of new store openings," the filing stated.
The Trian Group also said it has discussed with Levine how Family Dollar "could utilize its capital structure and significant free-cash flow, including by considering the use of prudent amounts of leverage to increase the size of the issuer's stock repurchase program."
In response, Family Dollar issued a statement saying it was "dedicated to building value for all shareholders."
"Over the last several years, Family Dollar has invested to improve processes and capabilities throughout the organization. As a result, the Company has achieved nine consecutive quarters of double-digit earnings per share growth, significantly expanded operating margins and improved inventory productivity."
Family Dollar's stock has been one of the market's better perfromers in recent years, with shares up 41% year to date and more than 30% over the past three years.