• Q3 earnings down 33%
  • Sales climb 3.3%
  • Comparable sales drop 1.8%

Family Dollar said it hopes its efficiency measures will improve profits after the US discount retailer booked a 33% drop in earnings in its third-quarter.

In the three months to the end of May, net income amounted to US$81.1m. This compared to earnings of $120.9m a year earlier.

The drop, Family Dollar said, reflects the economic challenges facing its core customer and an intense competitive environment. The company also incurred a $23m charge in the quarter as part of its previously announced restructuring initiatives including planned store closures and workforce optimisation.

Net sales, however, increased 3.3% to $2.66bn, while comparable store sales dropped 1.8% due to fewer customer transactions.

"We are executing our previously announced restructuring initiatives to improve our performance," said CEO Howard Levine. "Our recent investment to permanently lower prices is resonating with customers. We remain confident that these steps will position the company to improve our financial performance and deliver higher long-term shareholder returns."

The company narrowed its earnings guidance for the full year to between $3.07 and $3.17 per share, from previous guidance of $3.05 to $3.25 per share.