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GOODLETTSVILLE, Tenn. — Dollar General Corp. reported a 2% rise in fiscal second quarter earnings as markdowns brought shoppers into its stores.
Dollar General Corp. reported a 2% rise in fiscal second quarter earnings as markdowns brought shoppers into its stores.
Chairman and chief executive officer Rick Dreiling also reiterated the retailer’s commitment to acquire Family Dollar Stores Inc., despite the rival’s rejection of its $9.2 billion bid on the grounds it was unlikely to pass muster with antitrust regulators.
On August 28, Dollar General reported net income of $251 million, up from $245 million a year earlier. Sales in the quarter rose 7% to $4.7 billion, boosted by strength in tobacco products, candy, snacks and perishables, as well as contributions from new stores. Dollar General opened 426 stores in the 26 weeks through August 1, and closed 23 stores.
Sales met analysts’ expectations, as did per-share earnings of 83 cents.
"We grew both customer traffic and average ticket for the 26th consecutive quarter," Dreiling said.
For fiscal 2014, Dollar General expects sales to rise 8% to 9% from 2013 levels, with sales at stores open at least a year increasing by 3% to 3.5%.
Dreiling said the company remains “firmly committed” to the Family Dollar acquisition.
"The financial benefits of our offer to Family Dollar shareholders are indisputable, and the proposed combination would unlock tremendous value for Dollar General shareholders. We continue to believe the potential antitrust issues are manageable and that our transaction as proposed is both superior and achievable."
Dollar Tree Stores Inc. offered $8.5 billion for Matthews, N.C.-based Family Dollar in July, a deal that would create a company with 13,000 stores and annual sales of about $18 billion.
In contrast, a Dollar General-Family Dollar merger would create a company with more than 19,000 stores and combined sales of $28 billion.
