Getty Images Family Dollar reported a weaker-than-expected quarterly profit on Wednesday, blaming a delay in tax refunds for hurting sales at the end of January and early February. The discount retailer also forecast full-year profit below Wall Street estimates. Family Dollar Stores Inc. (FDO) shares were down 4.3 percent at $57.20 in premarket trading on Wednesday. The company expects sales of discretionary items such as apparel and home goods to be under pressure heading into the rest of its year. It cited financial pressures facing customers and unseasonably cold spring weather. "Our customers' discretionary spend is expected to remain constrained," Chief Executive Howard Levine said in a statement. In the second quarter ended March 2, net income rose to $140.1 million, or $1.21 a share, from $136.4 million, or $1.15 a share, a year earlier. Analysts looked for a profit of $1.22 a share. Sales rose 17.7 percent to $2.89 billion, meeting Wall Street expectations. For the fiscal year, the company sees earnings of $3.73 a share to $3.93 a share, while analysts, on average, targeted $3.98 a share, according to Thomson Reuters I/B/E/S. The retailer's margins have been pressured by sales of less profitable products that it added recently to compete against the likes of Dollar General Corp. (DG) and Walmart Stores Inc. (WMT). Family Dollar began selling cigarettes and other tobacco products, soft drinks, gift cards, magazines and other high-turnover merchandise in recent months. Selling the goods draws shoppers into its stores more often, but items like cigarettes typically carry lower margins than other merchandise such as apparel.
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