Family Dollar Stores, Inc. (NYSE:FDO) released the results from its third fiscal quarter before opening bell this morning. The retail chain posted adjusted diluted earnings of 85 cents per share on net sales of $2.66 billion, an increase of 3.3%. Analysts had been expecting earnings of 89 cents on revenue of $2.62 billion. Reported earnings per share were 71 cents.

Family Dollar Stores FDO

Breaking down Family Dollar’s results

Family dollar reported a 1.8% decline in comparable store sales due to fewer customer transactions and comparable store sales for June that were about flat. The average customer transaction value did increase, however, partially offsetting the decline in the number of customer transactions.

The discount retail chain reported that this year’s adjusted third quarter results exclude a 14-cent per share negative impact in connection with its restructuring initiatives and plans to improve efficiency and financial performance and strengthen its value proposition.

“We are executing our previously announced restructuring initiatives to improve our performance,” said Howard R. Levine, Chairman and CEO, in a statement. “Our recent investment to permanently lower prices is resonating with customers; we are seeing savings from our workforce optimization efforts; and we are on track to close approximately 370 underperforming stores by the end of the fiscal year.”

Gross profits were $910.9 million or 34.3% of net sales. Family Dollar took a $1.5 million inventory write-down charge to sell through items at stores that it plans to close. Excluding that write-down, gross profits rose 2.2% to $912.3 million or 34.3% of net sales. Family Dollar reported that lower inventory shrinkage partially offset impacts from stronger sales of consumables with lower margins, lower markups, and higher markdowns.

Family Dollar updates strategic plans

The retail chain also provided an update on its restructuring plans. It cut prices on almost 1,000 basic items by investing more than $50 million annualized to “deliver more compelling values to customers.” Family Dollar also cut down on corporate overhead and improved execution by realigning some important organizational functions.

In addition, the chain began the process of shutting down 370 underperforming stores during the second half of the 2014 fiscal year and made plans to slow down new store growth in the 2015 fiscal year. Family Dollar now plans to open between 350 and 400 stores in fiscal 2015.

Other updates including expanding its cooler program to “capture more food trips,” expanding categories that drive traffic like rolling out beer and wine, and improving store productivity.

Family Dollar gives guidance

Management for the retail chain reaffirmed the previously provided guidance. They expect fourth quarter adjusted earnings per share of between 75 cents and 85 cents. That’s compared to analyst expectations of 78 cents. The retail chain also said restructuring charges should amount to about 37 cents. it expects same store sales for the fourth fiscal quarter to be about flat.

Family Dollar projects full-year adjusted earnings per share of between $3.07 and $3.17, compared to analyst expectations of $3.14 per share. Earnings per diluted share are expected to be between $2.56 and $2.66 per share. The company’s fiscal year ends Aug. 30.