Family Dollar Stores Inc reported a 36 percent jump in quarterly profit topping market estimates and forecast fourth quarter in line or above analysts' view as more shoppers scoured its aisles for low prices on food, shampoo and household cleaners.
The discount retailer said lower inventory shrinkage and higher purchase mark-ups more than offset stronger sales of lower-margin consumable merchandise.
The (fourth) quarter is off to a good start, with sales in comparable stores increasing an estimated 2 percent in June, Chief Executive Howard Levine said in a statement.
The company, which sells most of its merchandise for below $10, earned $87.7 million, or 62 cents per share, for its third quarter ended May 30 -- up from $64.7 million, or 46 cents per share, a year ago.
Analysts on average had expected earnings of 59 cents per share, according to Reuters Estimates.
The company expects fourth-quarter earnings of 39 cents to 43 cents per share, while analysts on average were looking for a profit of 39 cents per share.
Last month, Family Dollar said its quarterly sales rose 8.2 percent to $1.84 billion, while sales at stores open at least a year, or same-store sales, rose 6.2 percent.
Family Dollar shares were up 8 percent in trading before the bell Wednesday. They closed at $27.75 Tuesday on the New York Stock Exchange.
(Reporting by Nivedita Bhattacharjee in Bangalore; Editing by Gopakumar Warrier)