FAMILY DOLLAR STORES INC - 10-K Annual Report

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FORM 10-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended August 31, 1995

Commission File No. 1-6807

FAMILY DOLLAR STORES, INC.
(Exact name of registrant as specified in its charter)

Delaware 56-0942963
(State of incorporation) (I.R.S. Employer Identification Number)

10401 Old Monroe Road, Matthews, North Carolina 28105
(Address of principal executive offices) (Zip Code)

P. O. Box 1017, Charlotte, North Carolina 28201-1017
(Mailing address)
Registrant's telephone number, including area code (704) 847-6961
Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange
Title of each class on which registered
Common Stock, $.10 Par Value New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X

The aggregate market value of the voting stock of the registrant held by
non-affiliates of the registrant on November 10, 1995, was approximately
$748,800,000.

The number of shares of the registrant's Common Stock outstanding as of
November 10, 1995, was 56,784,612.

DOCUMENTS INCORPORATED BY REFERENCE

Incorporated Documents
(To the extent indicated herein) Location in Form 10-K
Annual Report to Stockholders for the Part II (Items 5, 6, 7 and 8)
fiscal year ended August 31, 1995 Part IV (Item 14)

Proxy Statement dated November 22, 1995 Part III (Items 10, 11, 12
for the Annual Meeting of Stockholders and 13)

PART I
ITEM 1. BUSINESS

The original predecessor of Family Dollar Stores, Inc., was
organized in 1959 to operate a self-service retail store in Charlotte,
North Carolina. In subsequent years, additional stores were opened, and
separate corporations generally were organized to operate these stores.
Family Dollar Stores, Inc. (together with its subsidiaries referred to
herein as the "Company"), was incorporated in Delaware in 1969, and all
existing corporate entities became wholly-owned subsidiaries. Additional
stores continued to be opened and operated in wholly-owned subsidiaries
organized in the states where the stores were located. Four wholly-owned
subsidiaries organized as North Carolina corporations provide distribution,
trucking, operations, marketing and other services to the Company.

The Company now operates a chain of self-service retail discount
stores. As of November 1, 1995, there were 2,451 stores in 38 states and
the District of Columbia as follows:

Texas 234 Indiana 82 Iowa 15
North Carolina 209 Illinois 78 Delaware 13
Georgia 167 West Virginia 73 Connecticut 9
Ohio 153 New York 70 Nebraska 8
Florida 143 Mississippi 64 Colorado 8
Virginia 125 Missouri 49 Rhode Island 7
Tennessee 119 Arkansas 45 Minnesota 6
South Carolina 111 Maryland 42 New Mexico 5
Alabama 106 Oklahoma 40 New Hampshire 3
Pennsylvania 101 Massachusetts 32 Vermont 3
Kentucky 98 Wisconsin 23 District of Columbia 1
Louisiana 84 Kansas 21 South Dakota 1
Michigan 84 New Jersey 18 Maine 1

The number of stores operated by the Company at the end of each
of its last five fiscal years is as follows: 1,759 stores on August 31,
1991; 1,885 stores on August 31, 1992; 2,035 stores on August 31, 1993;
2,215 stores on August 31, 1994; and 2,416 stores on August 31, 1995.

During the fiscal year ended August 31, 1995, 12 stores were
closed, 10 stores were relocated within the same shopping center or market
area and 18 stores were expanded in size. In addition, the Company contin-
ued its program of periodic improvements in selected existing stores. All
of the stores are occupied under leases, except 144 stores owned by the
Company. (See "Properties" herein.) The Company has announced plans to
open approximately 235 stores and close approximately 35 stores during
the current fiscal year. Such plans are continually reviewed and subject
to change depending on economic conditions and other factors. From
September 1, 1995, through November 1, 1995, the Company opened 41 new
stores, closed 6 stores and expanded 1 store. All stores opening in the
fiscal year ending August 31, 1996, will have a new interior store layout
that features increased emphasis on promotional goods, improved presentation

of merchandise, lower fixtures and wider aisles for an attractive, customer-
friendly shopping environment. Ten existing stores have been remodeled to
the new prototype, and the Company will consider remodeling additional
stores in the second half of the fiscal year.

As of November 1, 1995, the Company had in the aggregate approxi-
mately 18,600,000 square feet of total store space (including receiving
rooms and other non-selling areas). The typical store has approximately
6,000 to 8,000 square feet of total area. The stores are in both rural and
urban areas, and they are typically freestanding or located in shopping
centers with adequate parking available. As of November 1, 1995, there
were approximately 1,275 stores located in communities with populations of
less than 15,000; approximately 460 stores in communities with populations
of 15,000 to 50,000; and approximately 716 stores in communities with
populations of over 50,000. All stores are similar in appearance and
display highly visible red and white "Family Dollar Stores" or "Family
Dollar" signs.

The Company's stores are operated on a self-service, cash-and-
carry basis, and low overhead permits the sale of merchandise at a
relatively moderate markup. During the fiscal year ended August 31, 1994,
in the face of increasing competition, the Company began to change its
merchandising strategy away from promotional pricing and towards everyday
low prices. In December 1993, prices were reduced on a limited number of
items in 400 stores and in June 1994, this program was expanded to 1,000
stores. In September and October 1994, the number of stores with
merchandise at reduced prices increased to 1,800, and the number of
stockkeeping units with price reductions increased from approximately 500
to approximately 2,500. A lesser number of price reductions were taken in
the balance of the stores in less competitive markets. No single store
accounted for more than one-fifth of one percent of sales during the fiscal
year ended August 31, 1995. Most of the stores are open six evenings a
week, and many remain open on Sunday afternoons.

The stores offer a variety of merchandise including men's,
women's, boys', girls' and infants' clothing, shoes, household products,
health and beauty aids, domestics, toys, school supplies, candy and snack
food, electronics, housewares, paint and automotive supplies. During the
fiscal year ended August 31, 1995, soft goods, including wearing apparel,
shoes, linens, blankets, bedspreads and curtains, accounted for approx-
imately 39 percent of the Company's sales. During the fiscal year
ended August 31, 1995, nationally advertised brand merchandise accounted
for approximately 25 percent of sales, Family Dollar label merchandise
accounted for approximately 6 percent of sales and merchandise sold under
other labels, or which was unlabeled, accounted for the balance of sales.
Irregular merchandise accounted for approximately 2 percent of sales during
such period. The Company does not accept credit cards or extend credit.

The Company has a policy of uniform pricing of items in the
majority of its stores. A zone pricing system in which selected merchandise
in stores in less competitive markets carries higher prices is utilized in
approximately 250 stores. The Company advertises through circulars which
are inserted in newspapers or mailed directly to consumers' residences, and
also advertises to a limited degree in newspapers and on radio in portions
of its operating area. As part of the Company's plan to reduce expenses to
support the program of price reductions on merchandise in its stores, in

the fiscal year ended August 31, 1995, the number of advertising circulars
distributed to consumers' homes was cut from 22 to 15. All seven adver-
tising coupon booklets that were distributed in the fiscal year ended
August 31, 1994, also were eliminated. In the fiscal year ending
August 31, 1996, the plan is to reduce the number of advertising circulars
distributed to consumers' homes from 15 to 14, and to again distribute no
coupon booklets. Advertising circulars that are passed out in the stores
will be utilized. An unadvertised internal maximum price policy is
followed, and the policy currently is to price most items of merchandise
under $17.99. In the fiscal year ended August 31, 1995, as part of the
Company's emphasis on the sale of lower priced merchandise, the Company
reduced the average price point of merchandise sold in its stores.

The Company purchases its merchandise from approximately 1,400
suppliers and generally has not experienced difficulty in obtaining
adequate quantities of merchandise. Approximately 55 percent of the
merchandise is manufactured in the United States and substantially all such
merchandise is purchased directly from the manufacturer. Purchases of
imported merchandise are made directly from the manufacturer or from
importers. No single supplier accounted for more than 2.5 percent of the
merchandise sold by the Company in the fiscal year ended August 31, 1995.
Each of the Company's 17 buyers specializes in the purchase of specific
categories of goods.

During the fiscal year ended August 31, 1995, approximately
2.5 percent of the merchandise purchased by the Company was shipped
directly to its stores by the manufacturer or importer. Most of the
balance of the merchandise was received at the Company's Distribution
Centers in Matthews, North Carolina, and West Memphis, Arkansas.
Merchandise is delivered to the stores from the Distribution Centers in
Matthews and West Memphis by Company-owned trucks and by common and
contract carriers. During the last fiscal year, approximately 65 percent
of the merchandise delivered was by common or contract carriers. The
average distance between the Distribution Center in Matthews and the
approximately 1,516 stores served by that facility on August 31, 1995, is
approximately 390 miles. The average distance between the Distribution
Center in West Memphis and the approximately 900 stores served by that
facility on August 31, 1995, is approximately 440 miles.

The Company also operates satellite distribution buildings in
Salisbury, North Carolina, and Memphis, Tennessee. High volume, bulk items
of merchandise are shipped by vendors directly to these facilities and then
delivered to the stores by contract carriers. During the fiscal year ended
August 31, 1995, the Company also utilized public freight handlers to a
limited degree to receive from vendors, store and then ship to the
Company's stores selected merchandise.

The business in which the Company is engaged is highly competi-
tive. The principal competitive factors include location of stores, price
and quality of merchandise, in-stock consistency, merchandise assortment
and presentation, and customer service. The Company competes for sales and
store locations in varying degrees with national and local retailing estab-
lishments, including department stores, discount stores, variety stores,
dollar stores, discount clothing stores, drug stores, grocery stores,
outlet stores, warehouse stores and other stores. Many of the largest
retail merchandising companies in the nation have stores in areas in which

the Company operates. The relatively small size of the Company's stores
permits the Company to open new units in rural areas and small towns, as
well as in large urban centers, in locations convenient to the Company's
low and low-middle income customer base. As the Company's sales are
focused on low priced, basic merchandise, the stores offer customers a
reasonable selection of competitively priced merchandise within a
relatively narrow range of price points.

Generally, in a typical store the highest monthly volume of sales
occurs in December, and the lowest monthly volume of sales occurs in
January and February.

The Company maintains a substantial variety and depth of basic
and seasonal merchandise inventory in stock in its stores (and in
distribution centers for weekly store replenishment) to attract customers
and meet their shopping needs. Vendors' trade payment terms are negotiated
to help finance the cost of carrying this inventory. The Company must
balance the value of maintaining high inventory levels to meet customers'
demands with the cost of having inventories at levels that exceed such
demands and that must be marked down in price in order to sell.

The Company has registered with the U. S. Patent and Trademark
Office the name "Family Dollar Stores" as a service mark.

On August 31, 1995, the Company had approximately 10,000 full-
time employees and approximately 8,500 part-time employees. Approximately
900 additional employees were hired on a temporary basis for the 1994
Christmas season. None of the Company's employees are covered by
collective bargaining agreements. The Company considers its employee
relations to be good.

ITEM 2. PROPERTIES

As of November 1, 1995, the Company operated 2,451 stores in 38
states and the District of Columbia. See "Business" herein. With the
exception of 144 stores owned by the Company, all of the Company's stores
were occupied under lease. Most of the leases are for fixed rentals.
A large majority of the leases contain provisions which may require
additional payments based upon a percentage of sales or property taxes,
insurance premiums or common area maintenance charges.

Of the Company's 2,307 leased stores at November 1, 1995, all but
97 leases contain options to renew for additional terms; in most cases for
a number of successive five-year periods. The following table sets forth
certain data, as of November 1, 1995, concerning the expiration dates of
all leases with renewal options:

Approximate Number of Approximate Number of
Leases Expiring Leases Expiring
Assuming No Exercise Assuming Full Exercise
Fiscal Years of Renewal Options of Renewal Options

1996 358 0
1997-1999 1,338 4
2000-2002 412 74
2003-2005 99 153
2006 and thereafter 3 1,979

Of the 144 Company-owned stores, 18 are located in Texas, 16 in
North Carolina, 13 each in Georgia and Virginia, 12 in Indiana, 11 in
Illinois, 8 in Tennessee, 7 in Michigan, 6 in Ohio, 5 each in Alabama and
Arkansas, 4 each in South Carolina, West Virginia, Florida, Kentucky and
Louisiana, 3 in Mississippi, 2 each in Iowa and Oklahoma and one each in
New Jersey, Missouri and Kansas. In these owned stores, there are
approximately 1,150,000 total square feet of space.

The Company also owns its Executive Offices and Distribution
Center which are located on a 64.5 acre tract of land in Matthews, North
Carolina, just outside of Charlotte, in a building containing approximately
810,000 square feet of which approximately 740,000 square feet are used for
the Distribution Center which includes receiving, warehousing and shipping
facilities, and approximately 70,000 square feet are used for Executive
Offices.

During the fiscal year ended August 31, 1995, the Company leased
buildings in Salisbury, North Carolina (approximately 300,000 square feet)
and Memphis, Tennessee (approximately 270,000 square feet) to serve as
satellite distribution facilities, and a buiding in Charlotte, North
Carolina (approximately 57,000 square feet) to serve as a reclamation
facility for merchandise returned from the stores. These leases continue
in effect in the fiscal year ending August 31, 1996.

In 1992, the Company purchased a 75 acre parcel of land in West
Memphis, Arkansas, and construction began in 1993 on a 550,000 square foot
full-service distribution center. This facility became operational in the
spring of 1994, and currently serves approximately 900 stores. The
approximate $25 million cost for the land, building and equipment was
financed with cash flow from current operations and short-term borrowing
under the Company's bank lines of credit. In October 1995, construction
began on a 300,000 square foot addition to this facility. It is presently
anticipated that construction will be completed by the end of the Company's
fiscal year on August 31, 1996. The estimated $15 million cost for the
expansion and the related equipment is expected to be financed in the same
manner as the financing of the original facility.

The Company owns and operates a fleet of tractor-trailers and
trucks to distribute its merchandise.

ITEM 3. LEGAL PROCEEDINGS

The Company knows of no material pending legal proceedings, other
than ordinary routine litigation incidental to the business, to which the
Company is a party or of which any of its property is subject.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted during the fourth quarter of the
fiscal year ended August 31, 1995, to a vote of security holders through
the solicitation of proxies or otherwise.

ITEM 4a. EXECUTIVE OFFICERS OF THE REGISTRANT

The following information is furnished with respect to each of
the executive officers of the Company as of November 1, 1995:

Name Position and Office Age

Leon Levine (1) Chairman of the Board 58
and Treasurer

John D. Reier (2) President 55

George R. Mahoney, Jr. (3) Executive Vice President - 53
General Counsel and Secretary

R. David Alexander, Jr. (4) Senior Vice President - 38
Distribution and
Transportation

Albert S. Rorie (5) Senior Vice President - 45
Data Processing

C. Martin Sowers (6) Senior Vice President - 37
Finance

Phillip W. Thompson (7) Senior Vice President - 46
Store Operations

Edward L. Zimmerlin (8) Senior Vice President - 48
Merchandising and
Advertising

Daniel R. Burns (9) Vice President - 48
Loss Prevention

Terry A. Cozort (10) Vice President - 52
Human Resources

Owen R. Humphrey (11) Vice President - 54
Distribution and
Transportation

Gilbert A. LaFare (12) Vice President- 49
Real Estate

Edgar L. Paxton (13) Vice President - 53
Advertising and
Sales Promotion

Kenneth T. Smith (14) Vice President - 33
Controller

(1) Mr. Leon Levine founded the Company's business in 1959 and
was its President, Chief Executive Officer and Treasurer
from 1959 until September 1977 when he was elected Chairman
of the Board, Chief Executive Officer and Treasurer.

(2) Mr. John D. Reier was employed by the Company as Senior
Vice President-General Merchandise Manager in August 1987,
and was promoted to Senior Vice President-Merchandising and
Advertising in that month. He was elected President in
November 1994.

(3) Mr. George R. Mahoney, Jr. was employed by the Company as
General Counsel in October 1976. He was elected Vice
President-General Counsel and Secretary in April 1977,
Senior Vice President-General Counsel and Secretary in
January 1984 and Executive Vice President-General Counsel
and Secretary in October 1991.

(4) Mr. R. David Alexander, Jr. was employed by the Company as
Senior Vice President-Distribution and Transportation in
August 1995. Prior to his employment by the Company, he
was employed by Northern Automotive Co., Inc., a chain of
discount automotive supply stores, from June 1993 to August
1995, where he was Senior Vice President-Distribution and
Transportation. Prior to his employment by Northern
Automotive Co., Inc., he was employed by Best Products Co.,
Inc., a chain of catalogue showroom stores, from June 1985
to May 1993 where he was Senior Vice President-Distribution
and Transportation.

(5) Mr. Albert S. Rorie was employed by the Company in various
capacities in the Data Processing area from March 1973
through January 1981, including employment as Director of
Data Processing. Mr. Rorie was self-employed as a data
processing consultant from January 1981 through May 1982,
when he rejoined the Company and was elected Vice
President-Data Processing. He was elected Senior Vice
President-Data Processing in January 1988.

(6) Mr. C. Martin Sowers was employed by the Company as an
Accountant in October 1984 and was promoted to Assistant
Controller in January 1985. He was elected Controller in
January 1986, Vice President-Controller in July 1989 and
Senior Vice President-Finance in December 1991.

(7) Mr. Phillip W. Thompson was employed by the Company in
January 1984 in the Store Operations Department. He was
elected Vice President-Store Operations in January 1985,
and Senior Vice President-Store Operations in January 1992.

(8) Mr. Edward L. Zimmerlin was employed by the Company in
March 1995 as Senior Vice President-Merchandising and
Advertising. For more than five years prior to his
employment by the Company, he was employed by Hills Stores,
a chain of discount stores, where he was Vice President-
Merchandising.

(9) Mr. Daniel R. Burns was employed by the Company as Vice
President-Loss Prevention in October 1994. For more than
five years prior to his employment by the Company, he was
employed by Kay-Bee Toy Stores where he was Vice President-
Loss Prevention and Shortage Control.

(10) Mr. Terry A. Cozort was employed by the Company as Director
of Human Resources in April 1988. He was elected Vice
President-Human Resources in July 1989.

(11) Mr. Owen R. Humphrey was employed by the Company in August
1979, and was promoted to Distribution Center Operations
Manager in December 1983. Mr. Humphrey was promoted to
Director of Distribution in January 1988, and was elected
Vice President-Distribution and Transportation in July 1989.

(12) Mr. Gilbert A. LaFare was employed by the Company in August
1992 as Vice President-Real Estate. For more than five
years prior to his employment by the Company, he was Vice
President-Real Estate with Little Caesars Enterprises,
Inc., a restaurant chain.

(13) Mr. Edgar L. Paxton was employed by the Company in December
1985 as Director of Advertising. He was elected Vice
President-Advertising and Sales Promotion in January 1988.

(14) Mr. Kenneth T. Smith was employed by the Company as a
financial analyst in October 1990. Mr. Smith was promoted
to Director of Information Services-Operations in February
1992 and to Director of Accounting in October 1992. He was
elected Vice President-Controller in October 1995.

All executive officers of the Company are elected by and serve at
the pleasure of the Board of Directors.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS

The information required by this item is included in the Company's
Annual Report to Stockholders for the fiscal year ended August 31, 1995, on
page 16 under the captions "Market Price and Dividend Information" and
"Market Prices and Dividends" and is incorporated herein by reference.

ITEM 6. SELECTED FINANCIAL DATA

The information required by this item is included in the Company's
Annual Report to Stockholders for the fiscal year ended August 31, 1995, on
pages 14 and 15 under the caption "Summary of Selected Financial Data" and
is incorporated herein by reference. The Company did not have any long-
term debt at the end of each of its last five fiscal years.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information required by this item is included in the Company's
Annual Report to Stockholders for the fiscal year ended August 31, 1995, on
pages 14 through 16 under the caption "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and is incorporated
herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this item is included in the Company's
Annual Report to Stockholders for the fiscal year ended August 31, 1995, on
pages 17 through 24 and is incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this item as to Directors is included
in the Company's proxy statement dated November 22, 1995, on pages 5 and 6
under the caption "Election of Directors" and is incorporated herein by
reference. The information required by this item as to executive officers
is included in Item 4A in Part I of this report.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is included in the Company's
proxy statement dated November 22, 1995, on pages 6 through 12 under the
caption "Executive Compensation" and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this item is included in the Company's
proxy statement dated November 22, 1995, on pages 3 and 4 under the caption
"Ownership of the Company's Securities" and is incorporated herein by
reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is included in the
Company's proxy statement dated November 22, 1995, on page 12 under the
caption "Related Transactions" and is incorporated herein by reference.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) Documents filed as part of this report:

1 and 2. Financial Statements and Financial Statement Schedules:

The consolidated financial statements of Family Dollar Stores,
Inc., and subsidiaries which are incorporated by reference to the
Annual Report to Stockholders for the fiscal year ended August 31,
1995, are set forth in the index on page 16 of this report.

All schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission
are not required under the related instructions, are inapplicable
or the information is included in the consolidated financial
statements, and therefore, have been omitted.

The financial statements of Family Dollar Stores, Inc. (Parent
Company) are omitted because the registrant is primarily an
operating company and all subsidiaries included in the consoli-
dated financial statements being filed, in the aggregate, do not
have minority equity and/or indebtedness to any person other than
the registrant or its consolidated subsidiaries in amounts which
together exceed 5 percent of the total assets as shown by the
most recent year-end consolidated balance sheet.

3. Exhibits:

Exhibits incorporated by reference:

3(a)(i) Certificate of Incorporation, dated November 24, 1969,
(filed as Exhibit 3(a) to the Company's Registration
Statement on Form S-1, No. 2-35468).

(ii) Certificate of Amendment, dated February 2, 1972, of
Certificate of Incorporation (filed as Exhibit
3(a)(ii) to the Company's Form 10-K (File No. 1-6807)
for the year ended August 31, 1980).

(iii) Certificate of Amendment, dated January 23, 1979, of
Certificate of Incorporation (filed as Exhibit 2 to
the Company's Form 10-Q (File No. 1-6807) for the
quarter ended February 28, 1979).

(iv) Certificate of Amendment, dated January 20, 1983, of
Certificate of Incorporation (filed as Exhibit 4(iv)
to the Company's Registration Statement on Form S-3,
No. 2-85343).

(v) Certificate of Amendment, dated January 16, 1986, of
Certificate of Incorporation (filed as Exhibit 3(a)(v)
to the Company's Form 10-K (File No. 1-6807) for the
year ended August 31, 1986).

(vi) Certificate of Amendment, dated January 15, 1987, of
Certificate of Incorporation (filed as Exhibit
3(a)(vi) to the Company's Form 10-K (File No. 1-6807)
for the year ended August 31, 1987).

(b) By-Laws, as amended as of November 6, 1987 (filed as
Exhibit 3(b) to the Company's Form 10-K (File No.
1-6807) for the year ended August 31, 1987).

* 10 (i) Incentive Profit Sharing Plan (filed as Exhibit 13(b)
to the Company's Registration Statement on Form S-1,
No. 2-35468).

* 10 (ii) 1979 Non-Qualified Stock Option Plan, amended as of
April 17, 1991 (filed as Exhibit 10(vii) to the
Company's Form 10-K (File No. 1-6807) for the year
ended August 31, 1991).

* 10 (iii) 1989 Non-Qualified Stock Option Plan, amended as of
April 17, 1991 (filed as Exhibit 10(viii) to the
Company's Form 10-K (File No. 1-6807) for the year
ended August 31, 1991).

* 10 (iv) Savings and Retirement Plan and Trust of Family Dollar
Stores, Inc. adopted as of August 1, 1986 (filed as
Exhibit 10(ix) to the Company's Form 10-K (File No.
1-6807) for the year ended August 31, 1986).

* 10 (v) Amendment No. One dated August 18, 1988, to Savings
and Retirement Plan and Trust of Family Dollar Stores,
Inc. adopted August 1, 1986 (filed as Exhibit 10 (xi)
to the Company's Form 10-K (File No. 1-6807) for the
year ended August 31, 1988).

10 (vi) Revolving/Term Loan Agreement dated as of February 28,
1993, between the Company and NationsBank of North
Carolina, N.A., as amended by letter agreement dated
March 31, 1993 (filed as Exhibit 10(vii) to the
Company's Form 10-K (File No. 1-6807) for the year
ended August 31, 1993).

* 10 (vii) Employment Agreement dated November 10, 1994, between
the Company and John D. Reier (filed as Exhibit 10
(viii) to the Company's Form 10-K (File No. 1-6807)
for the year ended August 31, 1994).

Exhibits filed herewith:

* 10 (viii) Family Dollar Employee Savings and Retirement Plan and
Trust, amended and restated as of January 1, 1987.

11 Statement Re: Computations of Per Share Earnings.

13 Annual Report to Stockholders for the fiscal year
ended August 31, 1995 (only those portions
specifically incorporated by reference herein shall be
deemed filed).

21 Subsidiaries of the Company.

27 Financial Data Schedule

* Exhibit represents a management contract or compensatory plan.

(b) No reports on Form 8-K have been filed by the Company
during the last quarter of the period covered by this
report.

FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES

Index

The consolidated financial statements of Family Dollar Stores, Inc., and
subsidiaries together with the report of Price Waterhouse LLP incorporated
in this report appear on the following pages of the Annual Report to
Stockholders for the fiscal year ended August 31, 1995.

Page of the
Annual Report

Report of Independent Accountants 17

Consolidated Statements of Income 17

Consolidated Balance Sheets 18

Consolidated Statements of Shareholders'
Equity 19

Consolidated Statements of Cash Flows 20

Notes to Consolidated Financial Statements 21-24

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

FAMILY DOLLAR STORES, INC.
(Registrant)

Date November 16, 1995 By LEON LEVINE
LEON LEVINE
Chairman of the Board

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant
and in the capacities and on the date indicated.

Signature Title Date

LEON LEVINE Chairman of the Board and November 16, 1995
LEON LEVINE Director (Chief Executive
Officer and Chief Financial
Officer)

JOHN D. REIER President and Director November 16, 1995
JOHN D. REIER

GEORGE R. MAHONEY, JR. Executive Vice President November 16, 1995
GEORGE R. MAHONEY, JR. and Director

C. MARTIN SOWERS Senior Vice President- November 16, 1995
C. MARTIN SOWERS Finance

KENNETH T. SMITH Vice President-Controller November 16, 1995
KENNETH T. SMITH (Principal Accounting
Officer)

THOMAS R. PAYNE Director November 16, 1995
THOMAS R. PAYNE

MARK R. BERNSTEIN Director November 16, 1995
MARK R. BERNSTEIN

JAMES H. HANCE, JR. Director November 16, 1995
JAMES H. HANCE, JR.