Discount retailer Family Dollar said this morning that fourth-quarter net income swelled 17% to $37.8 million, or 26 cents per share. Year-ago results had totaled $32.3 million (21 cents per share), including a $10.5 million pretax stock-compensation charge. The firm's earnings matched adjusted expectations of 24 to 27 cents per share, and edged past analysts' per-share estimate of 25 cents.

Sales rose 3.4% during the reporting period to $1.63 billion as same-store sales edged up 1%, with the average customer transaction amount skewing higher. Customer traffic was flat during the 3-month period.

Looking forward to the full year, FDO expects 2008 per-share earnings in a range between $1.74 and $1.85, compared to analysts' outlook of $1.81 per share. Sales are expected to rise between 4% and 6% next year surrounding the Street's 5% growth prediction with same-store sales growing by 1% to 3%. For the first quarter, FDO expects per-share earnings of 43 cents to 47 cents on a 7% to 9% jump in sales. Analysts are expecting earnings of 42 cents per share.

The company also plans to open 300 new locations in 2008 and, per a statement from company chairman/CEO Howard R. Levine, intend[s] to expand the selling space for food in approximately 2,800 stores.

FDO did warn that September same-store sales were on pace to be flat or fractionally higher, below an earlier forecast for 1% to 3% growth. The company said its customers have been more frugal due to the sluggish housing market, elevated gasoline prices, and the credit crunch.

In pre-market trading, FDO shares have gained nearly 3%.