Candy, Tobacco Sales Help Dollar General's Profit Top Estimates

Reuters

Dollar General, the No.2 U.S. discount retailer by store count, reported a better-than-expected rise in quarterly profit, helped by strong demand for candy, snacks and tobacco products.

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The company slipped from the No.1 spot after it lost a takeover battle for smaller rival Family Dollar Stores to Dollar Tree this year. The deal closed on July 6.

Family Dollar and Dollar Tree together have 13,600 stores. Dollar General had about 12,000 stores as of May 1.

Dollar General, which has said that it would speed up store openings this year, on Thursday reiterated the full-year profit and sales forecast it had given on June 2.

The company's net income rose 12.4 percent to $282.3 million, or 95 cents per share, in the second quarter ended July 31.

Analysts on average had expected a profit 94 cents per share, according to Thomson Reuters I/B/E/S.

Dollar General's sales rose 7.9 percent to $5.10 billion, slightly below analysts' estimate of $5.14 billion.

Same-store sales rose 2.8 percent. Analysts had expected a 3.60 percent rise, according to research firm Consensus Metrix.

Dollar General's shares were trading at $74 before the bell. Up to Wednesday's close of $76.71, the stock had risen about 9 percent this year.

(Reporting by Subrat Patnaik in Bengaluru; Editing by Don Sebastian and Savio D'Souza)