Family Dollar Stores Inc. (FDO) agreed to pay $250 million to Wells Fargo & Co. (WFC) under an accelerated stock-buyback plan, part of the deep-discount retailer's current $750 million repurchase program.
A string of companies continue to step up buyback efforts as many of them remain flush with cash. Discount stores benefited during the recession as shoppers traded down to cheaper products, and continued economic uncertainty have kept customers in their aisles.
On concerns that improved finances could lead shoppers to return to brand names and full-price retailers, Family Dollar and its peers have added more major labels and even food to their stores.
Family Dollar, which has a market capitalization of nearly $6 billion, raised its earnings target for the year by 9 cents a share in the wake of the Wells Fargo deal and its third-quarter target by 1 cent.
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