Family Dollar Stores Inc. (NYSE: FDO) reported third-quarter fiscal 2014 results before markets opened Thursday. The discount retailer posted adjusted diluted earnings per share (EPS) of $0.85 on revenues of $2.66 billion. In the same period a year ago, Family Dollar Stores reported EPS of $1.05 on revenue of $2.57 billion. Third-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.89 and $2.61 billion in revenue.

The company is fending off a demand from activist investor Carl Icahn for an immediate sale. When Icahn acquired 9.4% of the company in early June, shares shot up 12.5% to more than $68, but they have lost about $4 since. This earnings report is not going to improve the share price, and the lowered top end of the EPS forecast for the year will add to the weight on the stock.

Same-store sales dropped 1.8% in the third quarter, which Family Dollar attributed to a decline in customer transactions. The decline was partially offset by an increase in the average transaction value. Third-quarter sales were driven by consumables, primarily refrigerated items, frozen foods and tobacco. This is exactly what the company said in its second-quarter report with the only difference being that the decline is not as large as the 3.8% drop in the prior quarter.

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When it reported second-quarter earnings, Family Dollar Stores said it would close about 370 underperforming stores in the second-half of the year. The company took an inventory write-down of $1.5 million and a restructuring charge of $23 million in the third quarter as a result of the restructuring.

The fourth-quarter outlook is unchanged from the second-quarter report: the store expects to post EPS of $0.75 to $0.85 on flat sales and excluding a restructuring charge of $0.37 a share.

The forecast for full-year EPS has been revised from a prior range of $3.05 to $3.25 to a new range of $3.07 to $3.17, excluding some $0.51 in restructuring charges. The consensus estimate calls for EPS of $3.15. Same-store sales for the full year are expected to decline by a low-single-digit amount.

The company’s CEO said:

We are executing our previously announced restructuring initiatives to improve our performance. Our recent investment to permanently lower prices is resonating with customers; we are seeing savings from our workforce optimization efforts; and we are on track to close approximately 370 underperforming stores by the end of the fiscal year.

In addition to the store closings, Family Dollar Stores has lowered prices on about 1,000 basic items, reduced corporate overhead (i.e., fired people) and slowed its pace of opening new stores from an expected 525 this year to 350 to 400 next year. The company’s profit missed the analysts’ target because the lower pricing cost Family Dollar about $40 million.

Shares were down about 2.5% in premarket trading, at $62.65 in a 52-week range of $55.64 to $75.29. Thomson Reuters had a consensus analyst price target of around $60.60 before these results were announced.

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