Dollar General Corporation (NYSE: DG) is living up to its “stock of the decade” status. The king of dollar stores in retail is surging after beating earnings expectations this morning. In fact, the stock is back to within striking distance of an all-time high.
Net income rose more than 30% to $171.2 million (or $0.50 EPS) and sales rose by about 12% to $3.6 billion. We had the Thomson Reuters consensus estimate of $0.47 EPS and expected sales as about $3.57 billion.
As the quarter was strong and as retail is holding up, the dollar store king has raised the full 2011 guidance to $2.29 EPS to $2.32 EPS, which is more in-line to just above the consensus targets.
Another development may be building that would allow the company’s private equity backers to exit without jettisoning shares in yet another large secondary offering that adds greatly to the float. It has announced a share buyback plan of up to $500 million. This is important because the company is doing it after a mammoth rise.
Warren Buffett’s Berkshire Hathaway recently added to the new position under portfolio manager Todd Combs.
JON C. OGG
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