Same-Store Sales Jump Powers Dollar General's 4Q Beat

Powered by healthy same-store sales growth, discount retailer Dollar General (NYSE:DG) beat the Street on Thursday with a 31% leap in fourth-quarter profits.

Dollar General said it earned $292.5 million, or 85 cents a share, last quarter, compared with a profit of $222.5 million, or 64 cents a share, a year earlier. Excluding one-time items, it earned 87 cents a share, topping forecasts from analysts of 82 cents.

Sales soared 20% to $4.19 billion, topping the Street’s view of $4.11 billion. Same-store sales rose 6.5%, while gross margins slipped to 32.2% from 32.4%.

“We executed on our operating priorities and delivered strong financial performance, while, at the same time, we were able to make significant investments which, I believe, will enable us to continue to achieve outstanding results,” CEO Rick Dreiling said in a statement.

Looking ahead, Dollar General is eyeing a 10% to 11% rise in full-year total sales and a 3% to 5% gain in same-store sales. The company expects those increases to translate to an operating profit of $1.6 billion to $1.65 billion and non-GAAP EPS of $2.65 to $2.75. Analysts had been calling for non-GAAP EPS of $2.71.

Dollar General also said it plans to remodel or relocate 550 stores as well as open 625 new stores.

Shares of Goodlettsville, Ten.-based Dollar General rallied 3.24% to $46.20 Thursday morning, adding on to its 9% 2012 gain. They have soared nearly 50% over the past 52 weeks.