Sector Snap: Dollar Stores Dip

Goldman Sachs analyst Adrianne Shapira called the results "not impressive" in a note to investors on Friday even though they beat her earnings per share estimate. Shapira said the company's price target was under review and rates the company "Neutral."

"Over the medium term, we expect shares to mark time as the stock is likely to remain challenged until the company reverses sales declines and drives higher quality (earnings per share) beats," Shapira said.

However, Deutsche Bank analyst Mike Baker said the company's earnings contained "more good than bad," saying the key question will be the company's March performance given the early Easter holiday during which store were closed and cooler-than-expected weather.

For the quarter ending March 1, Family Dollar reported earnings of $63.3 million, or 45 cents per share, down from $90.5 million, or 60 cents per share, in the year-ago quarter.

Family Dollar lowered its fiscal 2008 outlook to between $1.50 and $1.60 per share. In January, the company forecast annual earnings of between $1.56 and $1.64 per share.

The lowered guidance, however, is still in line with Wall Street forecasts of $1.50 per share, according to a poll of analysts by Thomson Financial.

Shares of Family Dollar lost 29 cents to $20.82.

Here's how other dollar stores were performing:

Shares of 99 Cents Only Stores shed 25 cents, or 2.5 percent, to $9.67.