Family Dollar Shares Fall on 4Q Results

Matthews, N.C., Family Dollar’s shares fell Thursday after it lowered same-store sales expectations, while still reporting fiscal fourth-quarter results ahead of analyst expectations.

Family Dollar said earnings in the fourth quarter, ended Sept. 1, 2007, rose 17% to $37.8 million. The retailer reported sales of $1.63 billion, compared to $1.58 billion in the last quarter of 2006. Same-store sales rose 1%.

Improved merchandise markups, a better merchandise sales mix and lower inventory shrinkage offset higher seasonal markdowns, the company said. However, it warned that the rising cost of energy and other goods could keep its low-income customers out of stores.

"We continue to believe that our customers are consolidating trips in response to economic pressures and the volatility of gasoline prices," CFO Kenneth Smith said in a conference call with analysts.

Goldman Sachs analyst Adrianne Shapira said in a note to investors same-store sales were under pressure. The company reduced September same-store sales guidance to flat to 1% from a previous range of 1% to 3% growth.