AP News

Discount retailers up on Dollar General's gains


Discount retailer shares jumped Wednesday after Dollar General Corp. reported a better-than-expected second quarter.

Dollar and extreme discount stores have done well throughout the recession and its aftermath, attracting budget-conscious customers. They've also promoted themselves as easier to shop, because they're much smaller and have more stores than big-box stores like Wal-Mart and Target.

Dollar General showed that demand does not appear to be slowing. It reported that its quarterly net income jumped 15 percent, driven by more shoppers in its stores who spent more on each transaction.

The company earned 77 cents per share on an adjusted basis, beating analyst forecasts of 74 cents per share, according to FactSet. Revenue for the period jumped 11 percent to $4.39 billion, exceeding market expectations of $4.35 billion.

Sterne Agee analysts Charles Grom and Renato Basanta upgraded their rating on Dollar General's stock to "Buy" from "Neutral" on the report. They found the performance particularly impressive given the somewhat recent mixed retail backdrop.

Consumers have been slowing their spending at some retailers, such as clothing stores, as they either limit spending overall or opt to spend on bigger-ticket items like cars and home repairs.

Dollar General's performance follows Dollar Tree's report last month that its quarterly net income increased 5 percent on shoppers spending more in its stores.

Here's a look at how some of the discount retailer's shares fared by early afternoon:

Dollar General Corp.: Climbed $2.22, or 4.1 percent, to $56.10

Dollar Tree Inc.: Up $1.65, or 3.1 percent, to $54.18

Family Dollar Stores Inc.: Added 39 cents to $69.92

Big Lots Inc.: Gained 50 cents, or 1.5 percent, to $34.90

Fred's Inc.: Up 19 cents, or 1.2 percent, to $15.87


Coke's Big Fat Problem
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus