In the third quarter ended May 26, Family Dollar Stores, Inc. has reported that net income increased to $124.5 million, or $1.06 per diluted share, versus $111.1 million, or 91 cents per diluted share, for the fiscal 2011 period. Total net sales increased 9.6% to $2.36 billion in the quarter versus the year-earlier period while comparable store sales increased by 5%.

Morgan Stanley analyst Joseph Parkhill noted that, while comps came in better than the 4.4% that Family Dollar posted last quarter, they didn’t meet his 6% expectation even as earnings per share were a penny short of what he anticipated.

For their part, Family Dollar executives believe the company is on the road to improvement where financial returns are concerned.

 “I am especially pleased that we delivered these record results even as we launched multiple initiatives late in the quarter to increase our relevancy to the customer and drive greater store productivity,” said Howard Levine, Family Dollar chairman and CEO. “Delivering stronger shareholder returns begins with increasing sales per square foot, and this quarter, we began to implement a number of initiatives to broaden our consumable assortment and satisfy more of our customers’ shopping trips. As planned, most of these initiatives began late in the quarter and had little impact on our third quarter sales results. We are on schedule, and I am very pleased with the progress our teams have made in such a short period of time. As we complete most of these initiatives in the fourth quarter, we will have a fully competitive assortment and will be well-positioned to accelerate sales productivity further.”

In the first three quarters, Family Dollar opened 287 new stores, closed 43 stores and renovated, relocated or expanded 583 stores.