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MATTHEWS, N.C. - Discount store chain Family Dollar Stores, Inc. reported a 10.8 percent boost in sales for the first quarter ended Nov. 27, but profit was down 14 percent as consumers shifted toward more lower-margin basic goods, including food.
For the first quarter Family Dollar had net income of $55.4 million, or 33 cents a share, compared with $64.5 million, or 37 cents a share, a year earlier.
Sales climbed almost 11 percent to $1.38 billion from $1.24 billion. Family Dollar attributed the increase to better sales in existing stores and to sales in new stores opened as part of the company's store expansion program.
Same-store sales were up 2.5 percent, with 1 percent of the gain attributed to a weekly advertising circular distributed in the first week of November, according to the company.
While sales of basic consumables, including food, were good, Family Dollar said sales of more discretionary merchandise were below its plan.
As previously announced, the company said it plans to open up to 560 stores and close 60 to 70 stores during the fiscal year ending Aug. 27, 2005. Coolers will also continue to be rolled out at existing stores to facilitate the sale of perishable food. By the end of the fiscal year, Family Dollar said it expects to have coolers in at least 500 stores.
Family Dollar operates 5,571 stores in 44 U.S. states.