Dollar General 1Q Tops Street

By Kathryn Glass Retail FOXBusiness

Dollar General Corp. (DG) said improved customer traffic and a higher average transaction amount boosted revenue in the fiscal first quarter, prompting the company to beat expectations and raise its full-year view.

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The discount retailer increased its full-year forecast for adjusted earnings per share in the range of $2.68 and $2.78, up from its previous guidance for between $2.65 and $2.75 a share.  The company now expects full-year same-store sales to rise between 3% and 5%, with net sales up between 8% and 9% compared to net sales in 2011. That forecast is mostly better than the Street’s estimates for full-year earnings of $2.77 a share and revenue growth of 8.4%.

For the fiscal first quarter, Dollar General reported net income rose 36% to $213 million, or 63 cents a share, compared with year ago profit of $157 million, or 43 cents a share, one year ago.

Net sales rose 13% to $3.9 billion, up from $3.45 billion, in the first quarter of last year. Same-store sales rose 6.7% and gross margin came in at 31.5%.

The results beat expectations, as analysts polled by Thomson Reuters had predicted earnings of 60 cents a share on revenue of $3.83 billion.

"I believe we are positioned well to invest in the future of our business as we continue to redefine small-box retailing and reinforce Dollar General's role as America's general store," said Rick Dreiling, chairman and chief executive officer, in a release.

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In a separate release, the company announced a secondary public offering of 25 million common shares, to be sold by existing shareholders. Dollar General said it will not receive any proceeds from the offering. Citigroup (C), Goldman Sachs (GS) and KKR (KKR) will serve as lead underwriters.

Shares of Dollar General fell 13 cents in the regular session, closing at $48.49.  The stock initially edged higher in after-hours trading, before sliding 2.6%.