The Matthews, NC discount retailer, which opened 100 new stores in the fourth quarter, said earnings for the period rose 33% to $38.8 million, or 26 cents a share, due largely to increased sales of electronics, clothing, food and pre-paid cell phones. Earnings for the fourth quarter of 2005 were $29.2 million, or 18 cents a share. Sales for the quarter ended Aug. 26 increased 10.3% to $1.58 billion while sales at stores open at least a year grew 4.9%.

Despite the uptick in earnings, the retailer said sales in hurricane-affected areas fell below expectations, causing overall sales at comparative stores to rise just 2% in September, missing the company's 3% to 5% prediction. The company, which has more than 6,100 stores in the United States, said strong sales of higher margin items like apparel, electronics, food and pre-paid cellular phones helped boost sales for fiscal 2006 by 9.8% to $6.4 billion.

Net income fell 7% to $201.7 million, however, due to a verdict against the chain in a lawsuit over overtime pay for store managers. Family Dollar said it will appeal that ruling, which resulted in a $45 million, or 18 cents a share, charge against fiscal 2006 earnings.