Dollar General Quarterly Sales Rise 7%

Dollar General, the No.2 U.S. discount retailer by store count, reported lower-than-expected quarterly net sales, saying the retail environment was similar to the preceding quarter when it said consumers were holding back on spending.

The company's same-store sales rose 2.3 percent, also below the 2.7 percent growth expected by analysts polled by research firm Consensus Metrix.

Larger rival Dollar Tree reported better-than-expected net sales last week.

Dollar Tree said that higher rents, taxes and healthcare costs were pushing low-income Americans to rein in spending and helping discount retailers to win business.

Dollar General's net income rose to $253.3 million, or 86 cents per share, in the third quarter ended Oct. 30 from $236.3 million, or 78 cents per share, a year earlier.

Excluding items, the company earned 88 cents per share.

Net sales rose 7.3 percent to $5.07 billion. Analysts on an average had expected earnings of 87 cents per share on revenue of $5.09 billion, according to Thomson Reuters I/B/E/S.

The company also named interim Chief Financial Officer John Garratt permanently to the post.

Dollar General also increased its share buyback plan by $1 billion, increasing its total buyback authorization to $1.2 billion. The program has no expiration date.

(Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Shounak Dasgupta)