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Dollar General Surges on Outlook

The stock gains 11% after the company raises its 2003 profit forecast.
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Dollar General

(DG) - Get Report

said second-quarter earnings rose from a year ago, and the discount retailer raised its profit guidance for the full year.

The company reported earnings of $59.9 million, or 18 cents a share, compared with $42.4 million, or 13 cents a share, in the year-ago second quarter. Analysts polled by Thomson First Call expected 14 cents a share.

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Sales in the second quarter increased 13.6% to $1.65 billion from $1.45 billion a year ago. The company attributed the increase to 588 net new stores and a same-store sales increase of 4.7%.

Dollar General now believes earnings, excluding restatement-related items, will climb 15% to 20% for the year, up from previous estimates of 11% to 15% growth. The company also forecast a revenue increase of 13% to 15%. Same-store sales should rise 4% to 6%.

Additionally, Dollar General expects to open about 650 new stores, close 50 to 70 stores, and relocate or remodel 60 to 80 stores this year.

Shares of Dollar General were gaining $2.40, or 11%, to $23.32.