NEW YORK ( TheStreet) -- Family Dollar Stores ( FDO) is tanking Wednesday morning, after its first-quarter profit missed Wall Street's forecast.

During the quarter, the discounter earned $74.3 million, or 58 cents a share, from $67.8 million, or 49 cents, in the year-ago period. Analysts were calling for a profit of 61 cents a share for Family Dollar .

The disappointing profit was primarily due to lower gross margins and higher freight costs. Gross margin slipped to 36% from 36.1%.

Nonetheless, on the top line, Family Dollar Chairman and Chief Executive Howard R. Levine said was the best first-quarter performance in more than 12 years.

Family Dollar revenue rose 10% to $2 billion, while same-store sales grew 6.9%, receiving a boost from candy and food sales.

Looking ahead, Family Dollar expects full-year earnings in the range of $3.08 to $3.23 a share, in-line with forecasts of $3.18 a share. For the second quarter, the company is calling for a profit between 92 cents and 97 cents a share, slightly shy of analysts' predictions of $1 a share.

Shares of Family Dollar are tumbling 7.9% to $45.40 in pre-market trading.

--Written by Jeanine Poggi in New York.

>To contact the writer of this article, click here: Jeanine Poggi.

>To follow the writer on Twitter, go to http://twitter.com/jpoggi.

>To submit a news tip, send an email to: tips@thestreet.com.

If you liked this article you might like

Starbucks' Howard Schultz Reveals the Sight of Feared Activist Carl Icahn Causes Him to Look Away

Here's What Carl Icahn Bought and Sold in the First Quarter

Dollar Tree Intends to Be 'Mindful' of New Price Slashing Campaigns By Walmart and Target

The Value of a Dollar (Tree)

Strategy for the Months Ahead; Twitter Will Fly Solo: Best of Kass