Discount retailer Dollar General Corp reported a better-than-expected quarterly profit, helped by higher prices and lower transportation costs. The company said on June 02 that it sold more tobacco and healthcare products, perishable food items and candy and snacks in its consumables business in the first quarter.
Demand in the non-consumables business was driven by apparel and home products. Dollar General's shares rose about 4 percent in light premarket trading. The company is set to be dethroned as the top US discount retailer by store count after it lost a takeover battle for smaller rival Family Dollar Stores Inc to Dollar Tree Inc this year.
The combined Family Dollar and Dollar Tree will have more than 13,000 stores. Dollar General had about 12,000 stores as of May 1. Dollar General has said that it would speed up store openings this year. Dollar General's net income rose to $253.2 million, or 84 cents per share, in the quarter ended May 1 from $222.4 million, or 72 cents per share, a year earlier. Sales increased 8.8 percent to $4.92 billion.
Analysts on average had expected a profit of 81 cents per share and sales of $4.94 billion, according to Thomson Reuters I/B/E/S. Dollar General's same-store sales rose 3.7 percent, but fell short of the 4.1 percent growth analysts polled by research firm Consensus Metrix had expected.