MATTHEWS, N.C. (AP) -- Family Dollar's third-quarter profit declined more than 3 percent as the discount store seeks firmer footing in an industry that has grown intensively competitive.
Last month activist investor Carl Icahn urged Family Dollar to put itself up for sale, saying its performance is weakening and it faces mounting competition. Icahn _ who has a minority stake in the company _ also wants three of his representatives on the board.
Family Dollar has adopted a shareholder rights plan, commonly known as a “poison pill,” which is a defensive measure used to fend off hostile takeovers.
Shares, which had been slumping almost all year, took off in June after Icahn revealed that he had acquired a 9.4 percent stake in the company.
The company has tried to reinvigorate sales by lowering prices on almost 1,000 basic items. It's also cut some jobs and shuttered underperforming stores.
Chairman and CEO Howard Levine said Thursday that Family Dollar is on track to close about 370 stores by the end of this fiscal year.
For the period ended May 31, Family Dollar earned $81.1 million, or 71 cents per share. A year earlier it earned $120.9 million, or $1.05 per share.
Stripping out 14 cents per share tied to store closings and other restructuring, Family Dollar Stores Inc. earned 85 cents per share.
Analysts were looking for a per-share profit 89 cents per share, according to a FactSet survey, and shares edged lower before the opening bell Thursday.
Revenue for the Matthews, North Carolina company rose just over 3 percent to $2.66 billion from $2.57 billion. That topped Wall Street expectations for revenue of $2.62 billion.
Sales at stores open at least a year, a key indicator of a retailer's health, fell 1.8 percent as customer transactions declined. Family Dollar said sales at stores open at least a year were basically flat in June.
The company maintained its forecast for a fourth-quarter adjusted profit between 75 and 85 cents per share. Family Dollar narrowed its full-year adjusted profit guidance to a range of $3.07 to $3.17 per share. Its prior outlook was for $3.05 to $3.25 per share.
Analysts foresee a 78-cent per share profit for the fourth quarter and $3.14 per share for the full year.
Shares of Family Dollar rose 18 cents to $64.42 in early trading.