Dollar Tree Inc posted a bigger-than-expected increase in quarterly profit on Wednesday after shoppers spent more in its stores and the chain controlled costs, and its shares rose more than 10 percent to their highest level since October.
Dollar Tree, which sells items for $1 or less at its namesake chain and at a variety of prices at its smaller Deal$ stores, has had strong sales at new stores, which it continues to open.
The average amount spent by shoppers per trip increased, and "record numbers" of customers came to the chain during the quarter, Chief Executive Officer Bob Sasser said in a statement.
Dollar Tree earned $228.6 million, or $1.01 per share, in the fourth quarter ended on Feb. 2, up from $187.9 million, or 80 cents per share, a year earlier.
Sales jumped 15.4 percent to $2.25 billion, including a boost of $125 million from an extra week in the quarter.
In November, Dollar Tree had forecast a profit of 97 cents to $1.02 per share on sales of $2.2 billion to $2.26 billion. Analysts on average expected it to earn 99 cents per share on $2.23 billion in sales, according to Thomson Reuters I/B/E/S.
Sales at stores open at least a year rose 2.4 percent after increasing 7.3 percent a year earlier. The company had forecast that such sales would be flat to up by a low single-digit percentage rate in the latest quarter.
Dollar Tree said it expected first-quarter earnings of 53 cents to 58 cents per share on sales of $1.84 billion to $1.89 billion, with same-store sales up by a low single-digit percentage rate.
Analysts anticipate a profit of 58 cents per share on $1.87 billion in revenue for the quarter.
For the full year, Dollar Tree forecast earnings of $2.54 to $2.74 per share, with sales of $7.79 billion to $7.97 billion and a low single-digit percentage increase in same-store sales.
Analysts expect a profit of $2.81 per share on $7.9 billion in revenue for the year.
Dollar Tree is planning for 7.3 percent growth in square footage this year.
Shares of Dollar Tree rose 10.5 percent to end at $45.39 in New York.
© 2013 Thomson/Reuters. All rights reserved.