(Reuters) - Dollar General Corp reined in its full-year sales forecast on Thursday and said it remained committed to buying Family Dollar Stores Inc, which would solidify its place as the No. 1 U.S. discount retailer.
Dollar General took its $80-per-share bid for Family Dollar FDO.N directly to shareholders in September. Family Dollar shareholders are scheduled to vote this month on Dollar Tree’s $74.50-per-share offer.
Chairman and Chief Executive Officer Rick Dreiling said the company will give an update on its offer for Family Dollar ahead of the shareholder vote on Dec. 23.
Dollar General narrowed its sales growth forecast for the year ending in January to about 8 percent, for the year ending January, from a range of 8 percent to 9 percent.
The discount chain said same-store sales will increase at or below the previous forecast of 3 percent to 3.5 percent for the year.
Dollar General, which got 75 percent of its third-quarter sales from products priced under $5, is increasing more of its $1 consumable items like food, home cleaning and paper products, he said.
The company reported same-store sales growth of 2.8 percent for the quarter ended Oct. 31. Analysts estimated a rise of 3.2 percent, according to a poll by research firm Consensus Metrix.
It estimated same-store sales of 5 percent in the fourth quarter, driven by holiday sales, better weather versus the same period last year and improved performance in home and apparel categories.
Dollar General’s net income slipped to $236.3 million in the third quarter from $237 million, but earnings per share rose to 78 cents from 74 cents a year earlier due to fewer outstanding shares.
Revenue increased to $4.72 billion from $4.38 billion.
Analysts, on average, expected earnings of 80 cents per share on revenue of $4.78 billion, according to Thomson Reuters I/B/E/S.
Dollar General shares rose 2 percent to $68.02 at midday. Up to Wednesday’s close, the stock has risen over 10 percent this year.
Reporting by Sruthi Ramakrishnan, Yashaswini Swamynathan in Bengaluru and Nandita Bose in Chicago; Editing by Saumyadeb Chakrabarty and Jeffrey Benkoe