Dollar-Store Chains Surge After Topping Earnings Estimates

Dollar Tree Inc. and Dollar General Corp. both rallied after their earnings topped analysts’ estimates, raising optimism about discount chains in a shaky retail economy.

Dollar Tree posted first-quarter profit of 89 cents a share, excluding some items, beating the 81 cents predicted by analysts. The company also posted its annual forecast to as much as $3.80 a share, up from a forecast of no more than $3.65 in March. Dollar General, meanwhile, reported first-quarter earnings of $1.03 a share, vaulting past the 95-cent estimate.

Dollar Tree benefited from more customer traffic and a higher ticket price for purchases. It also is reining in payroll and operating expenses, helping lower overhead costs, the company said. Dollar General is keeping a close eye on expenses as well, Chief Executive Officer Todd Vasos said in his company’s earnings report.

“We remained keenly focused on ensuring the effectiveness and efficiency of every aspect of our business,” he said.

Dollar Tree jumped as much as 11 percent to $86.79, its biggest intraday gain since February 2013. Shares of Dollar General climbed as much as 4.1 percent to $87.62, the most since March 10.

Before it's here, it's on the Bloomberg Terminal.