Family Dollar profit misses expectations

U.S. discount chain Family Dollar Stores Inc. (FDO-N) posted a lower-than-expected quarterly profit, hurt by lower gross margins and higher freight costs.

The company forecast a second-quarter earnings of 92-97 cents US a share, against analysts' expectation of $1 US a share, according to Thomson Reuters.

The retailer earned $74.3 million, or 58 cents per share, in the fiscal first quarter ended Nov. 27, versus $67.6 million, or 49 cents per share, a year earlier.

Analysts, on average, expected it to earn 61 cents per share.

Family Dollar caters to low-income shoppers, with much of its merchandise priced at or below $10.

First-quarter sales rose 9.5 percent to $2 billion, while sales at stores open for at least a year rose 6.9 percent. The company also said December same-store sales rose about 4 percent. Analysts were expecting sales of $1.98 billion.