Dollar General's sales, profit beat expectations

Industries Reuters

Dollar General'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.

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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.

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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)