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Thursday, January 8, 2015

Increased discounting eats into Family Dollar's 1st-qtr profit, (NYSE: FDO)

Family Dollar Stores Inc, the target of a heated takeover battle between two rival U.S. dollar store chains, said its quarterly net profit nearly halved due to increased discounting and higher sales of lower-margin items such as food and tobacco.Same-store sales fell 0.4 percent in the first quarter ended Nov. 29. Analysts on average estimated a 1.4 percent increase, according to research firm Consensus Metrix.Gross margins fell to 33.4 percent from 34.3 a year earlier.The company said on Thursday that it is cutting back on promotional activities and focusing on an everyday low-price strategy to arrest the fall in margins.

Family Dollar Stores, Inc. (Family Dollar) operates a chain of more than 7,900 general merchandise retail discount stores in 46 states, providing consumers with a selection of merchandise in neighborhood stores. Shares of FDO traded higher by 0.24% or $0.19/share to $78.86. In the past year, the shares have traded as low as $55.64 and as high as $80.97. On average, 1030980 shares of FDO exchange hands on a given day and today's volume is recorded at 1025651.