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Family Dollar Quarterly Sales Rise 3%

Features Reuters

Family Dollar Stores Inc, the No. 2 U.S. dollar store chain, said its second-quarter profit fell 15.6 percent in what is likely to be its last quarterly report as a public company.

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The company's same-store sales rose just 0.5 percent in the second quarter, due to an unusually cold February and a fall in average spend per customer.

Analysts on average had expected comparable sales to grow 1.8 percent, according to research firm Consensus Metrix.

Family Dollar's shareholders approved an $8.5 billion cash-and-stock offer from Dollar Tree Inc in January, scuppering a higher hostile offer from larger rival Dollar General Corp.

Antitrust regulators are still reviewing the deal, but the U.S. Federal Trade Commission has identified about 340 stores for Dollar Tree to divest so it can gain approval for the merger.

The deal will allow Dollar Tree to leapfrog Dollar General and become the largest U.S. discount retailer, with more than 13,000 stores across the United States and Canada and over $18 billion in annual sales.

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Dollar Tree said it expects the deal to close in May.

Family Dollar's net income fell to $76.7 million, or 67 cents per share, in the second quarter ended Feb. 28, from $90.9 million, or 80 cents per share, a year earlier.

Excluding fees related to the Dollar Tree merger, the company earned 74 cents per share, a penny above the average analyst estimate of 73 cents, according to Thomson Reuters I/B/E/S.

Revenue rose to $2.80 billion from $2.72 billion, and was largely in line with the average analyst estimate.

Family Dollar's shares were little changed in premarket trading on Wednesday. (Reporting by Ramkumar Iyer in Bengaluru; Editing by Simon Jennings)