Family Dollar Stores posted a better-than-expected quarterly profit as cash-strapped consumers continued to seek low prices on everyday items like food.
The retailer, which prices most items at under $10, forecast a first-quarter profit of 55 cents to 60 cents a share and first-quarter comparable store sales increase of 5 percent to 7 percent.
It also forecast 2011 earnings that could beat analyst expectations.
Family Dollar is facing pressure to improve shareholder value from activist investor Nelson Peltz's Trian fund group, which has a 6.6 percent stake in the company.
Net income at Family Dollar was $74.0 million, or 56 cents a share, in the June-August quarter, compared with 60.1 million, or 43 cents a share, a year earlier.
Analysts on average were looking for a profit of 51 cents a share, before items, on revenue of $1.96 billion, according to Thomson Reuters I/B/E/S.
Earlier this month, Family Dollar said sales rose 8 percent to $1.96 billion during the quarter.
Sales at stores open at least a year rose 6.1 percent.
Shares of the retailer closed at $43.34 Tuesday on the New York Stock Exchange.
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