Family Dollar Stores Inc. posted a higher quarterly profit as U.S. consumers continued to seek out cheap food and other everyday items as unemployment remains high, but forecast fourth-quarter earnings below expectations.
For the fourth quarter, the retailer, which prices most of its merchandise at $10 or less, projected earnings of 46 cents a share to 51 cents a share.
Analysts were expecting the company to earn 53 cents a share, according to Thomson Reuters I/B/E/S.
For the third quarter ended May 29, the company earned $104.4 million, or 77 cents a share, compared with $87.7 million, or 62 cents a share, a year earlier.
Analysts on average forecast 76 cents a share.
In June, Family Dollar said sales at stores open at least a year rose 7 percent in the third quarter. Total sales rose 8.4 percent to $2.0 billion.
Family dollar has added a new checkout system that accepts more types of payments, including food stamps and gift cards, which have helped boost sales. The company has also been expanding its food offerings.
Shares of the company closed at $39.44 Tuesday on the New York Stock Exchange.
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