Sales gains lift Dollar Tree's 1Q profit 4 pct

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RICHMOND, Va. (AP) — Dollar Tree Inc. said Thursday its first-quarter net income rose nearly 4 percent as shoppers spent more at its discount stores.

The company's results beat Wall Street expectations, and its shares rose more than 8 percent in morning trading.

The company, based in Chesapeake, Virginia, said earnings totaled $138.3 million, or 67 cents per share, in the quarter that ended May 3, up from $133.5 million, or 59 cents per share, a year ago.

That edged out analyst expectations by a penny, according to a poll by FactSet.

Dollar Tree saw revenue increase more than 7 percent to $2 billion. Analysts expected $2.01 billion.

Its shares rose $4.07 to $54.07 in morning trading.

Sales at established stores rose 2 percent. That comparison is a key gauge of a retailer's health. It excludes the volatility associated with stores that recently opened or closed.

The top-performing categories during the quarter included candy, products at the checkout counter, stationery and seasonal merchandise for Valentine's Day and Easter, the company said.

Dollar stores offer a wide variety of products, from beach toys to vitamins. They have done well throughout the recession and its aftermath, attracting budget-conscious customers. They've also promoted themselves as easy to navigate and get to, because they're much smaller than big-box stores like Wal-Mart and Target, and often have more locations in cities.

Dollar Tree expects a full-year 2014 profit of $2.94 to $3.12 per share on revenue between $8.37 billion and $8.54 billion. Analysts expect earnings of $3.13 on revenue of $8.51 billion.

Dollar Tree operates more than 5,080 stores in the U.S. and Canada. During the first quarter, the company opened 94 stores, closed six and expanded or moved 28 stores.

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Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum .

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