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Aug 31 (Reuters) - Dollar General Corp reported a better-than-expected increase in quarterly comparable sales on Thursday as more shoppers visited its stores and spent more on average.
The Tennessee-based discount retailer’s sales from stores open more than 12 months rose 2.6 percent in the second quarter ended Aug. 4, above the 1.6 percent expected by analysts polled by Consensus Metrix.
The small format of dollar stores and their popularity with lower-income customers have helped Dollar General and larger rival Dollar Tree sustain revenue growth at a time when big retailers such as Wal-Mart and Kroger are slashing prices of groceries and household essentials.
Dollar Tree reported better-than-expected quarterly profit and same-store sales last week, helped by cost cuts, fewer discounts and as its Family Dollar unit reported better-than-expected comparable sales for the first time.
Dollar General’s net income fell to $294.8 million from $306.5 million, as it spent more on wages and training for store managers. On a per share basis, net income was flat at $1.08 per share as the company had fewer shares outstanding.
Excluding items, Dollar General earned $1.10 per share, beating analysts’ average estimate of $1.09, according to Thomson Reuters I/B/E/S.
Net sales climbed 8 percent to $5.83 billion, beating analysts’ estimates of $5.80 billion.
The company lifted the lower end of its profit forecast range for the year ending January. It now expects earnings of $4.35 to $4.50 per share, compared with a previous forecast of $4.25 to $4.50.
Dollar General also said it now expects full-year comparable sales at the high end of its forecast of up to 2 percent growth.
Shares of the company were slightly higher at $76.90 in premarket trading. (Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Sai Sachin Ravikumar)