Discount retailer Family Dollar reported Q3 adjusted earnings of $0.85 per share, which was weaker than the $0.89 expected by analysts.

During the period, comparable store sales fell by 1.8%.

“Our results continue to reflect the economic challenges facing our core customer and an intense competitive environment,” said CEO Howard Levine. “Although our sales results remain below our expectations, we are encouraged by the improving trends.”

Management expects comparable store sales to be flat in the next quarter.

When times are tough, consumers tend to spend less. However, efforts to spend less often include trading down to deep discounters like Family dollar. The chart below from an investor presentation highlights how Family Dollar's sales take off right after economic shocks.

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