June 1 (Reuters) - Dollar General Corp’s profit and sales beat analysts’ estimates, as the Dollar-store chain operator benefited from higher consumer spending at its stores and lower advertising costs.
The company’s shares were up 4.2 percent in light premarket trading on Thursday.
Sales at stores open more than a year rose 0.7 percent, slightly above the 0.6 percent growth expected by analysts polled by research firm Consensus Metrix.
Larger rival Dollar Tree Inc had last week reported lower-than-expected quarterly comparable sales, as late tax refunds led low-income customers to rein in spending at its Family Dollar stores.
Dollar General’s expenses rose 8.2 percent in the first quarter ended May 5 on higher wages and training for store managers. However, the company said it cut back on spending on advertising.
The company’s net income fell to $279.5 million, or $1.02 per share, in the quarter, from $295.1 million, or $1.03 per share, a year earlier.
The company said it took a charge of 1 cent per share on early retirement of long-term debt.
Excluding items, the company earned $1.03 per share, beating the average analysts’ estimate of $1 per share, according to Thomson Reuters I/B/E/S.
Net sales rose 6.5 percent to $5.61 billion. Analysts on average had expected revenue of $5.59 billion. (Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Maju Samuel and Arun Koyyur)