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Dollar store operator Family Dollar Stores, Inc. said on Friday its second quarter profits plunged a whopping 30 percent, as its shoppers limited their discretionary spending. The chain also once again cut its full-year earnings forecast, saying economic conditions have continued to deteriorate, predicted comps to droop as well.
"Our customers continue to react to the current economic environment by limiting their discretionary spending," said Howard Levine, chairman and chief executive.
In the second quarter ended March 1, Family Dollar’s net income fell to $63.3 million, or 45 cents per share, compared to $90.5 million, or 60 cents, a year ago. Sales dropped 6 percent to $1.83 billion in the quarter.
For March, Family Dollar said it expects comparable store sales to fall 4 percent to 5 percent. While sales of consumable items have been strong, it said sales in categories like clothing and lawn and garden items have been weaker.
For its third quarter, it forecast comparable-store sales to be flat to up slightly.
Family Dollar said it now expects fiscal year earnings of $1.50 to $1.60 per share. In January, it said it expected earnings of $1.56 to $1.64 for the year, which was down from a previous forecast of $1.62 to $1.74.