UPDATE 2-Family Dollar forecast tops view, plans more stores
* Q4 EPS $0.56 vs Wall St view $0.51
* To sharply increase store openings
* Sees FY11 EPS $2.95-$3.15 vs Wall St view $2.96
* Sets $750 mln share repurchase
* Shares up more than 4 percent (Recasts; adds details on forecast, new stores, share move, byline)
By Brad Dorfman
CHICAGO, Sept 29 (Reuters) - Family Dollar Stores Inc (FDO.N) forecast profit for the current fiscal year that would beat most analyst estimates and said it will speed up the pace of new store openings, sending its shares up more than 4 percent.
The retailer, which prices most of its goods under $10, has attracted cash-strapped consumers in a weak economy. It expects to reap the sales benefit of longer store hours, introduced earlier this year, and an overhaul to give more room to fast-moving items like food.
The company also posted fourth-quarter profit that beat analysts' estimates and said it had authorized a new $750 million share repurchase plan. It said the repurchases would lower its cost of capital.
The move comes as Family Dollar faces pressure from activist investor Nelson Peltz to improve shareholder value. Peltz's Trian fund group has a 6.6 percent stake in the company.
Family Dollar forecast fiscal 2011 earnings of $2.95 to $3.15 a share on a same-store sales increase of 5 percent to 7 percent. Analysts on average forecast $2.96 a share, according to Thomson Reuters I/B/E/S.
The company plans to open 300 new stores during fiscal 2011, up 50 percent from fiscal 2010, which ended on Aug. 28.
Net income in the June-August quarter was $74.0 million, or 56 cents a share, compared with $60.1 million, or 43 cents a share, a year earlier.
Analysts on average were looking for 51 cents a share before one-time items, 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.
Family Dollar shares rose to $45.12 in premarket trade from a close of $43.34 on Tuesday. (Reporting by Brad Dorfman; editing by John Wallace)
- WTO overcomes last minute hitch to reach its first global trade deal
- Colorado baker discriminated by denying gay couple wedding cake: judge
- Flights delayed as air pollution hits record in Shanghai
- Amish girl in Ohio will not be forced to resume chemo for cancer
- Australia foreign minister downplays China air defense zone tension in visit