Oct. 8--Bargain-minded shoppers propelled Family Dollar to record earnings in its 2009 fiscal year, which ended Aug. 29, the Matthews-based neighborhood discount chain reported Wednesday.

The company's net income rose 25 percent in the year, to $291.3 million, or $2.07 per diluted share. That compares with $233.1 million, or $1.66 a share, for the previous year, and beat analysts' expectations. Sales at stores open a year or more, an important gauge of retail health, were up 4 percent.

In a year that proved one to forget for most retailers, Family Dollar has been one of the few to benefit from consumers' heightened penny-pinching. The 6,600-store chain also made changes to grab a wider range of customers as a result of the shift, attracting more middle-income shoppers on top of its longtime base of lower-income buyers.

"I am especially proud of how quickly our team worked to position Family Dollar to serve an expanding customer base," chairman and CEO Howard Levine said in a news release. "Understanding the increased pressures facing consumers, we accelerated key investments to enhance the convenience and shopability of our stores."

The company ramped up a rollout of technology that enables more stores to accept credit cards and food stamps; it's now in 80 percent of locations, and will be in all of them by next spring, Levine said. Family Dollar has also boosted its selection of the household necessities that consumers are still buying despite the recession, such as food and cleaning products. Those moves have paid off, Levine said, with higher traffic and customers spending more per visit.

Levine said he's pleased with the company's progress and believes it is in a good position to continue to meet shoppers' needs as the economy improves. However, the company expects that the current consumer focus on saving money will continue in 2010, and aims to build on that by expanding its private-label offerings. The chain wants to open about 200 new stores in the year, more than in the current year, and expects sales to rise 5 to 7 percent.

For the fiscal year, Family Dollar's sales were up 6 percent, to $7.4 billion, compared with $7 billion in 2008. Results were strongest in what the retailer calls consumables, including food.

In the fourth quarter, the company's net income rose 13 percent, to $60.1 million, compared with $53.2 million. Sales were $1.8 billion, up 2.6 percent, with same-store sales up 1 percent.

The period was the most challenging of the year, Levine said, in part because the company spent upwards of $12 million to revamp the sales floor at about half of its stores, to allow for improved signage and more space for popular necessity items.

Shares of Family Dollar closed Wednesday at $28.21, down 27 cents, or 1 percent.

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