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    Family Dollar Impacted by Slower Sales of Apparel and Domestics

    MATTHEWS, N.C. - Discount chain Family Dollar Stores, Inc. experienced solid sales increases in August and its fourth quarter, although sales in existing stores were down slightly due in part to slower-moving softlines, the Matthews, N.C.-based company said yesterday.

    MATTHEWS, N.C. - Discount chain Family Dollar Stores, Inc. experienced solid sales increases in August and its fourth quarter, although sales in existing stores were down slightly due in part to slower-moving softlines, the Matthews, N.C.-based company said yesterday. In particular, sales of more discretionary merchandise, such as hanging apparel and domestics, were below the company's plan. As a result, Family Dollar said it expects the gross profit margin for the quarter to be adversely impacted by additional markdowns and lower sales of higher margin merchandise.

    For the four-week period ended Aug. 28, 2004, Family Dollar's sales were approximately $406.1 million, or 8.6 percent above sales for the similar period in the prior fiscal year. Sales in existing stores for the four-week period decreased 0.1 percent. While sales of hardlines were up approximately 2.5 percent, sales of softlines decreased approximately 8.9 percent.

    For the 13-week period ended Aug. 28, sales were $1,324.2 million, or 9.6 percent above sales for the similar period in the prior fiscal year. Sales in existing stores for the fourth quarter increased 0.7 percent, including an increase of approximately 2.9 percent in sales of hardlines and a decrease of approximately 7.2 percent in sales of softlines.

    Family Dollar, which sells cereal, coffee, and other packaged food products in its stores, said sales of basic consumable merchandise continued to be satisfactory. However, sales of more discretionary merchandise, such as hanging apparel and domestics, were below the company's plan. As a result, the gross profit margin for the quarter will be adversely impacted by additional markdowns and lower sales of higher margin merchandise.

    The company currently expects that net income per diluted share of common stock will be in the range of $.25 to $.26 in the quarter, compared to $.28 in the similar period in the prior fiscal year.

    For the fiscal year ended Aug. 28, 2004, Family Dollar opened 500 stores and closed 61 stores. As previously reported by Progressive Grocer, the company's plan is to open about 500 to 560 stores and close 60 to 70 stores during the fiscal year ending Aug. 27, 2005.

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