Dollar General Corp., locked in a takeover battle for smaller rival Family Dollar Stores Inc., said it's "firmly" committed to the deal.
Earnings in the second quarter ended Aug. 1 were 83 cents a share, the Goodlettsville, Tennessee-based retailer said today in a statement, matching the average of estimates compiled by Bloomberg. Sales rose 7.5 percent to $4.72 billion, short of the $4.77 billion average projection.
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Dollar General, whose $9 billion offer was rejected by Family Dollar last week on antitrust concerns in favor of a lower bid from Dollar Tree Inc., is trying to keep its perch atop the dollar-store industry. A merger between its two peers would create a new market leader and intensify competition at a time when Wal-Mart Stores Inc. is pushing smaller-format stores.
"We continue to believe the potential antitrust issues are manageable and that our transaction as proposed is both superior and achievable," Dollar General Chief Executive Officer Rick Dreiling said in the statement.
The company offered to buy Family Dollar for $78.50 a share in cash last week, topping Dollar Tree's $74.50 a share cash- and-stock offer made last month. Family Dollar's shares closed at $79.80 yesterday.
Dollar Stores are a bright spot in the retail industry which is suffering amid a reluctance to spend by shoppers as wage gains remain sluggish. Wal-Mart, Target Corp. and Macy's Inc. have all reported disappointing results this month.
Dollar General's pursuit of Family Dollar after the smaller company agreed to a buyout from Dollar Tree has created tension between the two. The companies have publicly traded barbs, accusing the other of misstating the facts surrounding a meeting on June 19 to discuss a possible combination.
Family Dollar, based in North Carolina, is willing to consider Dollar General's offer if it agrees to sell as many stores as regulators would require, people familiar with the matter said last week. Dollar General's current proposal to close 700 stores as part of a merger of the two discount retailers probably won't pass antitrust hurdles, Family Dollar has said.
(Dollar General will host a conference call to discuss the results at 10 a.m. New York time. To listen, visit DG US EVT