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Dollar Tree posts best same-store sales growth since 2011

A view of the sign outside the Dollar Tree store in Westminster

Discount retailer Dollar Tree Inc raised its sales outlook for the year after recording its strongest growth in quarterly same-store sales since 2011.

Shares of the company, which has agreed to buy Family Dollar Stores Inc for $8.5 billion, rose 3 percent premarket.

Dollar General Corp countered with a $9.1 billion bid that has been rejected by Family Dollar over antitrust concerns.

Dollar Tree, which like other discounters is facing competition from small-format stores opened by big retailers such as Wal-Mart Stores Inc , will become the largest dollar store chain if it pulls off its deal with Family Dollar.

Dollar Tree’s same-store sales rose 5.9 percent in the third quarter ended Nov. 1, beating the average analyst estimate of 4 percent, according to research firm Consensus Metrix.

The company said on Thursday it expected sales of $8.52 billion-$8.58 billion for the year ending January, up from its previous forecast of $8.44-$8.55 billion.

Dollar Tree, which also operates Deal$ and Dollar Bills stores, tightened its earnings forecast range to $2.97-$3.04 per share from $2.94-$3.06.

Net income rose 6 percent to $133 million, or 64 cents per share. Excluding items, the company earned 69 cents per share.

Net sales rose 11 percent to $2.1 billion.

Analysts on average had expected earnings of 64 cents per share on revenue of $2.06 billion, according to Thomson Reuters I/B/E/S.

Dollar Tree’s shares were trading at $64.50 premarket. Up to Wednesday’s close, they had risen 15.5 percent since July, when the company made its bid for Family Dollar.

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