March 26 (Bloomberg) -- Dollar General Corp.’s debt was raised two levels to investment grade by Moody’s Investors Service because of expectations its profit will continue to increase.
The rating was lifted to Baa3 with a stable outlook from Ba2, New York-based Moody’s wrote today in a note. Dollar General is rated BBB-, the lowest level of investment grade, by Standard & Poor’s, according to data compiled by Bloomberg.
The largest U.S. dollar-store chain has boosted sales and earnings as consumers hunt for bargains amid elevated unemployment and weak economic growth. Net income in the year ended Feb. 1 rose 24 percent $952.7 million.
“Moody’s views the dollar store sector favorably and expect that it will continue to grow given its low price points and its relative resistance to economic cycles,” the firm said in the note.
Dollar General, based in Goodlettsville, Tennessee, rose 2.2 percent to $52.22 at the close in New York. The shares have gained 18 percent this year, compared with a 9.6 percent advance for the Standard & Poor’s 500 Index.
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