Hurt by delayed tax returns, discount retailer Family Dollar Stores (FDO) posted a weaker-than-expected 2.7% rise in fiscal second-quarter profits on Wednesday and once again downgraded its outlook for the full year.

Wall Street punished Family Dollar for the earnings miss and gloomier guidance, driving its shares almost 5% into the red.

The company said it earned $140.1 million, or $1.21 a share, last quarter, compared with a profit of $136.4 million, or $1.15 a share, a year earlier. Analysts had been calling for EPS of $1.22 and the company had forecasted EPS of $1.18 to $1.28.

Sales jumped 18% to $2.89 billion, meeting the Street’s view. Same-store sales increased 2.9%, missing the company’s targets of 4% to 5%.

“This quarter we delivered positive results despite financial pressures that continue to challenge our customers,” CEO Howard Levine said in a statement.

Levine said Family Dollar’s results were hurt by the surprise delay of the 2012 tax refunds due to the fiscal cliff stalemate. “We were happy to see sales trends improve towards the end of the quarter as our customers began to receive their tax refunds,” he said.

Family Dollar cut its full-year EPS view to $3.73 to $3.93, down from $3.95 to $4.20. Even the high end of the new range would trail estimates from analysts for $3.98. Same-store sales are expected to grow 3% to 4%.

“Our discretionary sales continue to be challenged by both the financial pressures facing our customers as well as unseasonably cold spring weather," Levine said.

Family Dollar said the new forecast assumes discretionary spending will remain “constrained,” driving lower-than-expected home and apparel sales.

For the fiscal third quarter, Family Dollar projected EPS of 98 cents to $1.08, which compares poorly with the Street’s view of $1.18. Management sees same-store sales at the lower end of a 2% to 4% range.

Fourth-quarter EPS is seen ranging between 85 cents and 95 cents, while same-store sales are expected to be at the upper end of a 2% to 4% range.

Family Dollar said it expects to open about 500 new stores and close approximately 30 to 50 in the fiscal year.

Shares of Matthews, N.C.-based Family Dollar slumped 4.68% to $57.00 in premarket trading on Wednesday. The selloff threatens to extend the stock’s 5.7% retreat so far this year.

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