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Dollar Tree profit beats estimates on higher customer traffic

A Dollar Tree store in Miami
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Dollar Tree, the biggest U.S. dollar-store chain operator, on Tuesday reported third-quarter comparable store sales and profit that beat Wall Street estimates, helped by higher customer traffic and spending at its stores.

Sales at stores open for more than a year rose 3.3 percent, above the 2.4 percent rise expected by analysts, while same-store sales at Dollar Tree's namesake chain rose 5.2 percent, beating the 3.2 percent rise analysts had expected, according to Thomson Reuters I/B/E/S.

While other grocery retailers like Wal-Mart Stores and Kroger have been cutting prices to compete with the likes of Amazon, Dollar Tree has been relying more on its smaller store sizes and smaller product assortments to draw in customers.

Net income rose to $239.9 million, or $1.01 per share, in the third quarter ended Oct. 28, from $171.6 million, or 72 cents per share, a year earlier.

Net sales rose 6.3 percent to $5.32 billion.

Analysts on average had expected earnings of 90 cents per share on sales of $5.28 billion, according to Thomson Reuters I/B/E/S.

Shares of Dollar Tree, which is reporting its first quarterly results under the leadership of new Chief Executive Gary Philbin, where slightly up in premarket trading.