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Family Dollar Profit Drops as Pricing Changes Crimp Margins

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Family Dollar Stores Inc., the discount retailer at the center of a takeover battle, posted a 47 percent decline in first-quarter earnings after a new pricing strategy and a shift to lower-margin products took a toll on profit.

Net income fell to $41.4 million, or 36 cents a share, from $78 million, or 68 cents, a year earlier, the chain said in a statement. Excluding some items, profit was 44 cents a share in the period, which ended Nov. 29. Analysts had projected 62 cents on average, according to data compiled by Bloomberg.