Family Dollar (NYSE:FDO) EPS Lowered by UBS (NYSE:UBS) But Outlook the Same

Even though UBS (NYSE:UBS) sees higher expenses cutting into margins of Family Dollar Stores Inc. (NYSE:FDO), they remain bullish on the company.

UBS said, "We have trimmed our FY2011E (Aug.) EPS to $3.20 from $3.26, reflecting a higher expense cadence for the balance of the year than we previously forecasted owing to sales driving initiatives. Our same-store sales growth of +6% and flattish gross margin expectation remain largely unchanged, as does our estimation that FDO will complete its $750M share buyback in this FY. Our F’12E EPS is trimmed to $3.83 from $3.87, tied to higher SG&A, but we do believe share repurchase will continue aggressively. We remain above-consensus in our EPS est."

UBS maintains a "Buy" rating on Family Dollar Stores Inc., which was trading at $44.65, down $0.34, or 0.76 percent, as of 12:41 PM EST. UBS lowered their price target on Family Dollar from $54 to $52.