In the first quarter of fiscal 2015, corporate payroll as a percentage of sales decreased about 20 basis points compared to the first quarter of fiscal 2014. Operating profit in the first quarter excluding $8.9 million in fees related to our pending merger with Dollar Tree was $79.5 million or 3.1% of sales compared to $120.3 million or 4.8% of sales in the first quarter of fiscal 2014.
Excluding the impact of nondeductible expenses related to our pending merger with Dollar Tree, the adjusted effective income tax rate in the first quarter was 37.1% compared to 35.4% in the first quarter last year. The increase in the adjusted effective tax rate was primarily due to lower federal job tax credits.Many of these federal programs were retroactively reinstated in December 2014. If these provisions had been in effect during the first quarter of fiscal 2015, the adjusted effective tax rate would have been approximately 35.2%. Net income in the first quarter of fiscal 2015 was $41.4 million, excluding fees related to the pending merger with Dollar Tree, adjusted net income for the first quarter was $50.2 million compared to $78 million in the first quarter of fiscal 2014.
Now, a few highlights from the balance sheet and cash flow statements. Merchandise inventories at the end of the first quarter increased 4.1% to $1.71 billion compared with $1.65 billion at the end of the first quarter last year.Average inventory per store at the end of the first quarter was approximately 3% higher in average inventory per store at the end of the first quarter last year. The increase was primarily the result of the company’s expanded assortment of tobacco and food.Despite the softness in discretionary sales, average discretionary inventory per store at the end of the first quarter this year was lower than the average discretionary inventory per store at the end of the first quarter last year.
Working capital at the end of the first quarter was $771.7 million compared to $695.8 million at the end of the first quarter last year. During the first quarter of fiscal 2015, our private placement notes were reclassified as short term, which resulted in an increase in the current portion of our long-term debt and a $169 million decrease in working capital.
Capital expenditures in the quarter were $103.5 million compared to $112.5 million in the first quarter of fiscal 2014. The decrease in capital expenditures was primarily the result of fewer new store openings in the quarter and a reduction in corporate technology investment. These reductions were partially offset by increased investments in existing stores to support the continued rollout of Checkpoint and new merchandise fixtures to support the expansion of our tobacco and adult beverage program.
As we discussed last quarter, we are slowing new store growth. During the quarter, we opened 59 new stores and closed no store, compared to 126 openings and one closure in the first quarter last year. In addition, we expanded, relocated or renovated 178 stores in the quarter compared with 179 stores in the first quarter of last year.In the first quarter of fiscal 2015, we paid $35.3 million in dividends. Consistent with our merger agreement with Dollar Tree, we do not expect to pay any further dividends to shareholders.
And now, I’d like to turn the call back over to Howard for some final comments. Howard?
Howard Levine, Chairman and CEO, Family Dollar Stores Inc
Thanks, Mary. In fiscal ‘14, we implemented a number of initiatives designed to drive sales and reposition our business. The last several quarters have been challenging, as we have transitioned from a high-low pricing strategy to more of an everyday low price strategy. I believe that we are starting to see the benefits of those investments.Our traffic trends are improving. We are beginning to see stabilization in key consumable categories, and we are managing SG&A to reflect the challenging environment.
