Dollar General profit more than triples

BANGALORE (Reuters) - Dollar General Corp's DG.UL quarterly profit more than tripled as higher sales of private-label goods and cost cuts boosted the discount retailer's margins.

The company, which sells most of its merchandise for $10 or less, said net income was $93.6 million in the second quarter, ended July 31, up from $27.7 million a year earlier.

Net sales at the company, backed by powerful private equity firm Kohlberg Kravis Roberts & Co KKR.UL, rose 11.2 percent to $2.90 billion as same-store sales rose 8.6 percent.

As the recession tightens household budgets, more shoppers have flocked to discount chains such as Dollar General, Wal-Mart Stores Inc (WMT.N), Family Dollar Stores Inc (FDO.N) and Dollar Tree Inc (DLTR.O).

Dollar General, which had filed for an initial public offering of up to $750 million in August, said it would not host a conference call as it was legally restricted in its ability to discuss its business until the regulators declared the registration statement effective.

In the quarter, Dollar General's margins were boosted by changes in its merchandise mix to add more private-label goods as well as a cut in its distribution and transportation costs.

While private-label products tend to cost less than brand-name products, they also tend to carry higher margins for retailers, helping profits.

The company also attributed better results to reduced incidence of theft and broken or otherwise unsalable items -- known as "shrink" in retail circles.

The company, which operates 8,577 stores in 35 U.S. states, said it plans to open about 500 more new stores and remodel or relocate 450 others in 2009. It sees capital expenditures of about $300 million to $325 million in the period.

(Reporting by Martinne Geller and Dhanya Skariachan: Editing by Dave Zimmerman)