Family Dollar Stores Inc reported a higher-than-expected quarterly profit as the discount retailer drew more shoppers, and it forecast earnings for the current quarter above Wall Street estimates.
This quarter began on November 29, and Family Dollar estimated that sales at stores open at least a year rose 4 percent in the busy holiday shopping month of December.
The North Carolina retailer, which sells most of its merchandise for below $10, said net income rose 14 percent to $67.6 million, or 49 cents per share, in the first quarter that ended November 28 from $59.3 million, or 42 cents per share, a year earlier.
Analysts on average were expecting earnings of 47 cents per share, according to Thomson Reuters I/B/E/S.
Last month, Family Dollar reported that first-quarter net sales rose 3.9 percent to $1.82 billion, while same-store sales rose 2.4 percent -- below its estimate for growth of 3 percent to 5 percent.
At the time, it said it still expected earnings to fall within its forecast of 45 cents to 50 cents per share.
For the second quarter, the retailer forecast same-store sales would rise by 2 percent to 4 percent, and that earnings per share would range from 65 cents to 70 cents. Wall Street analysts are forecasting a profit of 64 cents per share during the current quarter.
For the full fiscal year, Family Dollar forecast net sales will rise 4 percent to 6 percent, with earnings per share ranging from $2.15 to $2.35.
The company's shares rose $1.51, or 5.5 percent, to $29.00 in premarket trading.
(Reporting by Phil Wahba and Nicole Maestri; Editing by Lisa Von Ahn)