Matthews-based Family Dollar said Wednesday that sales and profits are up over last year, and announced plans to open as many as 500 new stores over the next 12 months as the retailer pursues an aggressive expansion plan.

The company also offered a rosy outlook for next year amid continuing economic anxiety, saying it expects sales to increase 8 to 10 percent as struggling consumers look for bargains.

"In today's uncertain economic environment, value continues to resonate," said CEO Howard Levine. "Our strategy...continues to attract not only our core low-income customer, but also middle-income customers with increased frequency." Executives said the increased sales this year were the result of more customer visits and higher average purchases.

The retailer reported both its fourth-quarter and fiscal 2011 results. For the company's quarter ending Aug. 27, sales rose 9.1 percent, to $2.1 billion. For the full year, Family Dollar's sales were 8.7 percent higher than a year ago, totaling $8.5 billion.

Profit for the year was $388 million, up 4.5 percent from the year before, and the company posted earnings per diluted share of $3.15. Both exceeded analysts' consensus forecast. Sales at stores open a year or more, considered a key indicator of a retailer's health, rose 5.5 percent.

Family Dollar, with about 7,000 stores, has been under pressure from activist investor Nelson Peltz, a hedge fund owner who bought a large stake in Family Dollar last year. Peltz has said Family Dollar needs to match the performance of its larger rival, Dollar General, which has more than 9,500 stores.

Anthony Chukumba, an analyst for BB&T Capital Markets, said he was impressed with the company's performance.

"It was a really nice finish to a successful fiscal 2011," he said, adding that he thinks the company is positioned well for tough economic times. "Unemployment is high, consumer confidence is low...Consumers are looking to save money."

Gross profit declined slightly this year, to 35.5 percent from 35.7 percent. The company says part of the reason is increased sales of consumable goods such as food, which have lower profit margins but drive increased customer visits. Family Dollar expanded the food assortment in all of its stores by about 20 percent this year.

The retailer also spent about $345 million on capital investments in fiscal 2011, $133 million more than in the previous year. This was largely due to the company's renovating nearly 1,000 stores and opening 300 new stores, up from 200 last year.

In fiscal 2012, the company plans to up its capital spending to between $550 and $600 million, largely to finance store renovations and the company's largest wave of new store openings in years.

For the coming year, Family Dollar said its board has authorized the company to repurchase another $250 million worth of stock from shareholders. The company spent $670 million on share buybacks in fiscal 2011, much of it funded by debt.

Family Dollar plans to increase the pace of its new store openings, the retailer said Wednesday, with between 450 and 500 new stores. Family Dollar also plans to close 80 to 100 stores, which would leave the chain with about 7,400 locations.

Executives said that as the economy wobbled this year, they saw lower-income customers pull back from making discretionary purchases. But they also saw middle-income customers still willing to trade-down and shop at Family Dollar.

Levine said he thinks Family Dollar's strategy will keep working in the "tenuous environment" many consumers are experiencing.

Said Levine: "Economic conditions have not improved, as some expected, and in fact have worsened for many families."

Family Dollar's stock closed down 87 cents, or about 1.6 percent, at $53.31 a share on Wednesday.