Dollar General, Party City Up After Earnings

Shares of Dollar General Corp. DG and Party City Holdco Inc PRTY surged after they reported better-than-expected earnings for the fourth quarter.

Dollar General said its net income grew about 6 percent to $376.2 million, or $1.30 per share, which topped Street view of $1.26 per share. Net sales rose 7 percent to $5.29 billion, but came slightly below the consensus estimate of $5.3 billion. Same-store sales increased 2.2 percent, resulting from increases in both customer traffic and average transaction amount.

Dollar General forecast full-year same-store sales growth of 2-4 percent, sales growth of 7 to 10 percent and EPS growth of 10 to 15 percent. The company also raised its quarterly dividend to $0.25 per share from $0.22. For 2016, the company plans to return approximately $1.3 billion to shareholders through anticipated quarterly cash dividends and consistent share repurchases.

Party City announced better-than-expected fourth quarter profit. Adjusted earnings came in at $0.76 a share, topping Wall Street's forecasts of $0.75 a share. However, revenue of $781.5 million missed estimates of $784.84 million. Brand comparable sales increased 2.8 percent.

Looking ahead, the company expects 2016 earnings to be between the range of $1.17 to $1.25 a share, revenue to come in between the range of $2.35 billion to $2.42 billion and brand comparable sales to range between flat to up slightly. Street expects earnings of $1.19 a share on revenue of $2.44 billion.

Dollar General surged 9.5 percent to touch a 52-week high of $82.41.

Party City shares climbed as much as 21 percent and is now trading at $12.74.