UPDATE 3-Dollar Tree profit jumps 20 pct, shares rise

* Q3 share 47 cents vs 44 cents analysts' view

* Sees Q4 shr $1.07 to $1.15 vs analysts' view $1.12

* Shares rise 4.7 pct (Adds more CEO comments, byline)

By Nicole Maestri

NEW YORK, Nov 25 (Reuters) - Discount retailer Dollar Tree Inc (DLTR.O) said on Tuesday quarterly profit rose 20 percent as more customers came into its stores for low prices on basic items like food and cleaning supplies.

While other retailers have cut their sales and profit forecast for the crucial year-end holiday quarter, Dollar Tree, which sells most of its merchandise for $1, expects its momentum to continue into the fourth quarter as shoppers look to stretch limited budgets.

"We are gaining new customers and increasing market share," Dollar Tree Chief Executive Bob Sasser told analysts on a conference call. "Our customer traffic and transaction size has increased. More people are shopping our stores and they're buying more when they visit."

Shares rose 4.7 percent to $40.09 on the New York Stock Exchange, off an earlier high at $41.35.

Sasser also sees opportunities for Dollar Tree in finding better commercial real estate at lower costs, as some retail chains cut back on store openings while others plan to close existing outlets under bankruptcy proceedings.

"I believe that there's going to be going forward a lot of opportunity with taking space where other retailers have pulled back," he said.

Dollar Tree said net income rose to $43.1 million, or 47 cents per share, for its fiscal third quarter that ended Nov. 1, from $35.9 million, or 38 cents per share, a year earlier.

Analysts on average had expected a profit of 44 cents a share, according to Reuters Estimates. Dollar Tree had forecast a profit in the range of 40 to 43 cents.

TRADING DOWN

As the U.S. economy has weakened and job losses mount, Dollar Tree has said customers are "trading down" from other retailers to its stores for bargains on everything from beauty supplies to seasonal merchandise, such as Halloween candy.

But the retailer, which operates 3,572 stores in 48 states, has also cautioned that margins would be pressured this year by higher diesel prices and stronger demand for lower-margin products such as food.

"It's just so uncertain out there," Sasser said, adding: "There's a flight to value and everything we sell is $1.00. "I'd pick my spot over most others."