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Dollar General Q1 profit edges up, but disappoints; opening 700 stores

Goodlettsville, Tenn. -- Dollar General Corp.’s first-quarter profit and sales missed Wall Street estimates as the retailer cited an “unfavorable’ winter, increased competition and economic challenges. The company said Tuesday its profit rose to $222.4 million, from $220.1 million year ago. The retailer also reiterated its plans to open 700 stores in fiscal 2014, and remodel, to varying degrees, another 900 existing locations.

Net sales rose to $4.52 billion, from $4.23 billion. Same-store sales rose 1.5% in the quarter.

Dollar General said sales trends began to improve in April and have continued to gain momentum.

“We are pleased to see that our merchandising strategies are gaining traction with a strengthening of sales in both consumables and non-consumables in our second quarter to date,” said Rick Dreiling, Dollar General’s chairman and CEO. “Looking ahead, we are confirming our sales and EPS guidance for the year, and we are confident that we have the right strategies to drive long-term shareholder value.”

The discounter expects to open 214 new stores in the first quarter. The company also reiterated its plans to open 700 new stores in the 2014 fiscal year and to remodel or relocate another 500. In addition, it plans to complete approximately 400 limited scope (“lifecycle”) remodels.