Dollar Store Stocks Bounce Back

On Tuesday, Dollar General

released its

. The company's earnings per share beat Wall Street estimates and revenues were in-line with the Street. Dollar General also raised its full-year earnings per share guidance, but the updated guidance was still below current consensus of $2.86 per share by a penny. Dollar General's CEO Rick Dreiling sounded a cautious note about his business and the economic atmosphere in a statement. Although our performance over the Thanksgiving weekend and start of the holiday season has been encouraging, we continue to be cautious for the remainder of the year," he said. 'We are facing a significant same-store sales comparison from our 2011 fourth quarter, which included very strong January sales, growing near-term pressures that are impacting our customers' confidence and spending, and a challenging competitive environment,'' Dreiling added. In the wake of the earnings release and the conservative commentary from management, investors on Wall Street took down Dollar General shares as well as the stocks of competitors Dollar Tree

and Family Dollar

, with the latter stock getting hit the hardest. Prior to Tuesday's sell off, both Dollar General and Dollar Tree had seen fairly substantial declines in recent months whereas Family Dollar was slightly positive on the three-month chart. On Wednesday, all three stocks are retracing some of yesterday's losses. The biggest gainer has been Family Dollar, which was last trading up around 3 percent to $66.43. Dollar Tree shares had added 2 percent to $38.74 and Dollar General was up about 1 percent to $43.35. From a near-term technical perspective, however, the charts of dollar store stocks continue to look bearish. All three stocks are trading well-below highs seen earlier in the year and both Dollar General and Dollar Tree are underperforming the S&P 500 in 2012, with DG rising a little over 5 percent and DLTR recording a loss of 6 percent. FDO, on the other hand, has done slightly better than the index with a gain of 15.50 percent.