(Reuters) - Family Dollar Stores Inc
The discount retailer, which caters to lower income shoppers, many of whom live paycheck to paycheck, reported a 35 percent decline in profit in the quarter that ended March 1, while sales at stores open at least a year fell 3.8 percent. It expects same-store sales to decline this quarter, too.
Family Dollar, which has struggled to compete with rivals Dollar General Corp
To remedy that, the retailer will cut prices on 1,000 basic items, Chief Executive Howard Levine said in a statement.
Family Dollar, which operates 8,100 stores across the United States, also said it would close 370 weak performing stores, and slow its expansion of new stores. The company will open between 350 and 400 new stores next fiscal year, rather than the 500 initially planned.
The job cuts and store closures are expected to reduce annual operating costs by $40 million to $45 million beginning third quarter of fiscal 2014, the company said.
Overall sales in the second quarter fell 6.1 percent to $2.72 billion, below the $2.77 billion analysts were expecting, according to Thomson Reuters I/B/E/S.
A bright spot for Family Dollar were strong sales of frozen food and tobacco products.
Net income was $168.9 million, or $1.47 per share, down from $220.4 million, or $1.90 per share.
Family Dollar shares were down 3.4 percent in premarket trading.
(Reporting by Phil Wahba and Shailaja Sharma in Bangalore; Editing by Savio D'Souza and Sofina Mirza-Reid)