NEW YORK (Reuters) – Discounter Dollar General Corp’s (DG.N) reported a quarterly profit on Thursday as the retailer benefited from higher customer traffic from bargain-seeking shoppers, sending shares up in premarket trading.
Dollar General, which prices most its merchandise for below $10, said profit in its fiscal third quarter ended Oct. 30 was $75.6 million, or 24 cents per share, compared with a loss of $7.3 million, or 2 cents per share, a year earlier.
Analysts, on average, were expecting earnings of 25 cents per share, according to Thomson Reuters I/B/E/S.
Sales rose 12.7 percent to $2.93 billion, while sales at its stores open at least a year, or same-store sales, rose 9.2 percent.
As the recession crimped household budgets, shoppers have flocked to discount chains such as Dollar General, Wal-Mart Stores Inc (WMT.N), Family Dollar Stores Inc (FDO.N) and Dollar Tree Inc (DLTR.O).
Dollar General was acquired in 2007 by private equity group Kohlberg Kravis Roberts & Co [KKR.UL] but the retailer was taken public in November, and its stock now trades on the New York Stock Exchange. KKR still owns about 88 percent of Dollar General.
Goodlettsville, Tennessee-based Dollar General, which operates about 8,700 stores in the United States, said it plans to open 600 new stores in 2010 and remodel or relocate about another 500.
Shares rose 2.5 percent to $24.60 in premarket trading. (Reporting by Phil Wahba; additional reporting by Nicole Maestri in San Francisco, editing by Gerald E. McCormick)