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Dollar General trims sales view, 'committed' to Family Dollar bid

A customer walks into a Dollar General store near Montpelier, Vermont.
Adam Jeffery | CNBC
A customer walks into a Dollar General store near Montpelier, Vermont.

Dollar General reined in its full-year sales forecast and said it remained committed to buying Family Dollar Stores, a deal that would allow it to keep its position as the No. 1 U.S. discount retailer.

Dollar General will lose its top position if it fails to upend a merger agreement between Family Dollar and Dollar Tree.

Dollar stores are facing increasing competition from small-format stores opened by big-box retailers such as Wal-Mart Stores and online retailers such as Amazon.com.

Dollar General took its $80 per share bid for Family Dollar Stores Inc directly to shareholders in September. Family Dollar shareholders are scheduled to vote this month on Dollar Tree's $74.50 per share offer.

Dollar General said on Thursday it would provide an update on its offer ahead of the shareholder vote on Dec. 23.

Dollar General narrowed its sales forecast for the year ending January to about 8 percent, for the year ending January, from a range of 8-9 percent.

The company reported same-store sales growth of 2.8 percent, for the quarter ended Oct. 31. Analysts polled by research firm Consensus Metrix had expected a rise of 3.2 percent.

Dollar General's net income slipped slightly to $236.3 million in the third-quarter, but earnings per share rose to 78 cents from 74 cents a year earlier due to fewer outstanding shares.

Revenue rose to $4.72 billion from $4.38 billion.

Analysts on an average had expected earnings of 80 cents per share on revenue of $4.78 billion, according to Thomson Reuters I/B/E/S.

Dollar General's shares were down 1 percent at $66 in premarket trading. Up to Wednesday's close, the stock had risen over 10 percent this year.