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GOODLETTSVILLE, Tenn. — Dollar General Corp. on Thursday reported third quarter financial results that fell short of analysts’ expectations. It also reiterated its commitment to buy Family Dollar Stores Inc., which has agreed to be acquired by rival Dollar Tree Stores Inc.
Dollar General Corp. on Thursday reported third quarter financial results that fell short of analysts’ expectations. It also reiterated its commitment to buy Family Dollar Stores Inc., which has agreed to be acquired by rival Dollar Tree Stores Inc.
Dollar General said it plans to give an update on its bid before Family Dollar shareholders vote on the Dollar Tree offer. That vote is set for December 23.
For the three months through October, Dollar General said revenue rose 7.8% to $4.7 billion. Same-store sales were up 2.8% on increased store traffic and a bigger average basket.
Net income was $236.3 million, or 78 cents per share. Earnings, adjusted for onetime gains and costs, were 79 cents per share. Wall Street was expecting earnings of 80 cents a share.
"We continued to grow our market share in consumables, and we are very pleased with the performance of our home and apparel categories," noted Rick Dreiling, Dollar General’s chief executive officer.
Dollar General said it expects its earnings for the full year to be in the middle of the $3.45 to $3.55 range it previously provided. It also expects sales growth of 8%, at the low end of the 8% to 9% growth it forecast earlier.
The company expects same-store sales growth of 5% in the current quarter.
Dollar General made a $9.1 billion takeover bid for Family Dollar in September, after Family Dollar had accepted an $8.5 billion buyout offer from Dollar Tree.
Family Dollar’s board has unanimously endorsed the Dollar Tree offer, asserting that the Dollar General bid is unlikely to win approval from the Federal Trade Commission.
Dollar General responded with a pledge to divest up to 1,500 stores to satisfy the antitrust regulators, but the offer was unpersuasive to Family Dollar’s board.
So Dollar General launched a hostile bid directly at Family Dollar shareholders. It recently extended its tender offer to December 31 to see what might emerge from the FTC’s review of its rival’s merger bid and to allow Family Dollar stockholders more time to opt for the more lucrative bid.
