Discount store chain

Family Dollar


reported sales and earnings well above year-ago levels for the second quarter of its fiscal 2003.

The company also repeated guidance that same-store sales would increase 3% to 5% in the second half of the year and that net income during that period would rise 14% to 16%.

The company attributed the rise to increased comps and to its store expansion program, though it also announced the pace of new-store growth would slow somewhat.

Family Dollar earned $63.8 million, or 42 cents per share, on sales of $1.26 billion. Earnings compared to 37 cents per share on $1.1 billion in the year-ago quarter. The results are in line with the estimates gathered by Thomson Financial/First Call.

The company said sales in existing stores rose 2.9% in the quarter ended March 1, compared to the year-ago period, and the average transaction price rose 2.6%. Gross margin -- the difference between what a retailer pays for merchandise and what it charges -- rose slightly to 33.2% from 33%.

Citing that it had maintained growth despite global uncertainties and poor weather, the company said it would plan its seasonal offerings conservatively. It also said it was slowing planned new-store expansion for the remainder of the fiscal year.

Family Dollar said it would open 475 to 500 new stores and close 65 by the end of the fiscal year in August. Its original plan had been to open 575 stores and close about 50. In its statement, the company said it's focusing a majority of the stores in urban markets, where construction, the permit process and improvements take longer than elsewhere.

Family Dollar also said it had purchased 278,800 shares of the company's stock during the quarter as part of a previously announced buyback program.