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Family Dollar 3Q Same-store Sales Rise

The Associated Press

MATTHEWS, N.C. (AP) — Discount retailer Family Dollar Stores Inc. said Thursday its same-store sales rose 6.2 percent during its fiscal third-quarter, and said based on the results it would meet or beat the high end of its earnings outlook.

The Matthews, N.C., company said net sales for the period ended May 30 rose 8.2 percent to $1.84 billion from $1.7 billion last year.

Analysts polled by Thomson Reuters expected third-quarter revenue of $1.86 billion.

Chief Executive Howard R. Levine said in a statement that the company's strong same-store sales momentum continued from the previous quarter. Same-store sales, or sales at stores open at least a year, is a key measure of retailer performance because it measures growth at existing stores rather than at newly opened ones.

Levine said sales of consumable merchandise rose 13 percent in the quarter, marking continued gains. He also noted that sales in several discretionary categories improved from the second quarter.

Consumers — worried about the recession — have been cutting their spending and focusing on basics.

Family Dollar said it now says it expects earnings per share to be at or above the upper end of its earlier estimate of 54 and 58 cents. Analysts predict it will earn 57 cents per share, according to Thomson Reuters.

Family Dollar is scheduled to report quarterly results on July 8. The company operated 6,654 stores at the end of May, with 26 new stores opening during the quarter.

Shares of Family Dollar fell $1.57, or 4.9 percent, to $30.83 in morning trading.