Dollar General said Thursday that profit rose 14% from the year-earlier period to $237 million, or 74 cents a share. Adjusted income rose 10% to $231 million, or 72 cents a share, 2 cents higher than consensus estimates for the quarter.
Same-store sales rose 4.4% in the quarter, fueled by increased traffic and average transaction value, while total sales rose 10.5% to $4.38 billion, the company said. The revenue number was lower than the $4.42 billion that analysts had expected, according to Thomson Reuters.
Dollar General noted that sales of tobacco, perishables and candy and snacks had the most significant growth. Same-store sales were also helped by seasonal and home products, while apparel sales were lower due to a "planned merchandising initiative that reduced apparel inventories in more than 4,000 stores" during the quarter.
The company also announced $200 million of share repurchases in the quarter and increased its buyback authorization by $1 billion.
The stock was surging 5.2% to $59.31 at last check.
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"Dollar General once again delivered strong results in the third quarter, even in the face of an ongoing challenging consumer environment," said Rick Dreiling, Dollar General's chairman and CEO. "Our merchandising initiatives have continued to be successful in driving traffic and sales. We had solid financial performance across key metrics, including better than anticipated gross margin performance and solid SG&A leverage."
Dreiling said the company is forecasting full-year adjusted earnings per share between $3.18 and $3.22, 3 cents higher on the low end than previously stated. Analysts, according to Thomson Reuters, forecast earnings of $3.22 a share.