Dollar General earnings rise; still eyeing acquisition

Dollar General Corp. reported a 2% rise in second quarter earnings on Thursday as markdowns boosted store traffic. The retailer also reiterated its commitment to acquire rival Family Dollar Stores Inc.

The company reported net income of $251 million in the period, up from $245 million a year earlier.

GOODLETTSVILLE, Tenn. — Dollar General Corp. reported a 2% rise in second quarter earnings on Thursday as markdowns boosted store traffic. The retailer also reiterated its commitment to acquire rival Family Dollar Stores Inc.

The company reported net income of $251 million in the period, up from $245 million a year earlier.

Sales were up 7% to $4.7 billion, boosted by sales of 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," said chairman and chief executive officer Rick Dreiling.

"As we enter the third quarter, we are seeing our sales momentum pick back up and expect that momentum to build as our initiatives gain traction with our customers," he said. "For the second half of the year we are well positioned to serve our customers and provide them with the everyday-low pricing they count on from us."

Dreiling also 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."

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%.