Dollar Tree (DLTR) - Get Report posted first-quarter earnings of 98 cents per share on sales of $5.09 billion, beating analysts' expectations and its own earnings guidance as shoppers continued to snap up its low-cost wares despite the wider downturn in retailing.

Analysts had expected earnings of 81 cents per share on revenue of $5.1 billion.

Dollar Tree shares rose sharply in after-hours trading Thursday morning, climbing to $82.00, up $3.64, or 4.7%, after closing Wednesday at $78.36, up 83 cents, or just over 1%.

"Through what continues to be a challenging economic environment, we delivered sales (at) the mid-point of our guidance range, and earnings that exceeded the high end of our guidance range," said CEO Bob Sasser. "We are part of what I consider, in this economic environment, the most attractive sector in retail."

Consolidated net sales increased 134% on the same quarter last year, boosted by the addition of about 8,000 stores following the July acquisition of Family Dollar Stores for $9.2 billion. Included in the $2.91 billion sales increase was $2.7 billion of revenue from Family Dollar stores, while same-store sales at Dollar Tree outlets increased 2.3% on a constant currency basis.

Dollar Tree said it expects net sales for the second quarter to range from $5.03 billion to $5.12 billion and diluted earnings per share to come in at 66 cents to 72 cents.

The company narrowed its full-year net sales range to between $20.79 billion and $21.08 billion, from $20.76 billion to $21.11 billion. It hiked its earnings per share forecast up to between $3.58 and $3.80, from $3.35 to $3.65.

Dollar Tree, of Chesapeake, Va., released the earnings hot on the heels of first-quarter figures from  Dollar General (DG) - Get Report  . Its rival also beat earnings estimates in the first quarter as gross margins increased. Dollar General reported diluted earnings per share of $1.03, a rise of 23% year-on-year, well above a consensus forecast for earnings per share of 95 cents.

TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, said Wednesday from the floor of the New York Stock Exchange that he liked both Dollar Tree and Dollar General though preferred the former.