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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.
Revenue rose 2.3 percent to $2.56 billion.
Family Dollar is being pursued by both Dollar General Corp and
Dollar Tree Inc, which see an acquisition of the company as way
to help fend off rising competition from Wal-Mart Stores Inc and
Amazon.com Inc.
Family Dollar has agreed to be bought by smaller rival Dollar
Tree for about $8.5 billion in cash and stock, saying Dollar
General's $9.1 billion all-cash offer does not address
anti-trust concerns.
Dollar General, the biggest U.S. discount retailer, has taken
its offer directly to Family Dollar shareholders, who are
scheduled to vote on Dollar Tree's offer on Jan. 22.
Family Dollar's net income fell 47 percent to $41.4 million, or
36 cents per share.
Excluding merger-related expenses, the company earned 44 cents
per share.
Analysts on average had expected a profit of 62 cents per share
and revenue of $2.57 billion, according to Thomson Reuters
I/B/E/S.
Family Dollar shares were down 0.8 percent at $78.20 in
premarket trading on Thursday.
(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by
Simon Jennings)
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