Family Dollar profit up nearly 10%, 300 stores on tap for 2011

Matthews, N.C. -- Family Dollar Stores said Wednesday that its fiscal first-quarter profit climbed 9.9% on strong candy and food sales and higher customer traffic. The discounter said it will open approximately 300 new stores in fiscal 2011.

Family Dollar reported net income of $74.3 million for the period ended Nov. 27, up from $67.6 million a year ago. Its results, however, were short of analysts expectations, with the disappointing profit attributed primarily due to lower gross margins and higher freight costs.

Revenue increased 9.5% to $2 billion, with double-digit sales increases in candy and food. Same-store sales rose 6.9%.

"Our comparable store sales increase of 6.9% is the best first quarter result we've delivered in more than twelve years," said Howard R. Levine, chairman and CEO.

Family Dollar said first-quarter traffic improved but average transaction value was essentially flat.