The dollar store sensation may be a played-out investment thesis at this point, especially since the big-box players have fought back hard, but that may not be enough to stop Dollar General (DG 0.87%). The store released its earnings Wednesday morning to a Wall Street anticipating the continuation of attractive growth and industry outperformance. High analyst expectations have a habit of disappointing investors, but, luckily, not this time. Moreover, in the long run, Dollar General holds some appealing traits as a retailer. As the market digests earnings, here's what you should focus on for the heavy-discount, small-format retailer.

Great expectations
With a stock up nearly 140% over a five-year period, at its 52-week high, and with same-store sales figures that far, far outpace the behemoths of discount retail (read: Wal-Mart (WMT 0.60%)), the risk of falling flat has become an increasing concern for Dollar General investors and analysts. Earlier in 2013, analysts cut estimates as management issued cautious outlook -- now proven to be a prophetic statement for all of the retail industry.

This quarter, though, Dollar General continued to deliver on expectations and beyond. For the second quarter, the company brought in $245.5 million in net income, or an adjusted $0.77 per share. Last year's number was $0.64 per share, and analysts were expecting around $0.74 per share, giving this quarter solid gains all around and aiding in sending the stock up nearly 5% on the day.

Same-store sales rose an impressive 5.1%. This is particularly encouraging given that three months ago management warned of moderating sales growth, increasing competition, and pressured margins. According to Yahoo! Finance, Dollar General's same-store sales growth came in ahead of its competitors -- Dollar Tree and Family Dollar at 3.7% and 2.9%, respectively.

Despite all of the great news for the just-ended quarter, management remained very cautious looking forward and stuck by its lowered full-year profit guidance of $3.15 to $3.22 per share.

Does this mean Dollar General's big gains are over with for the time being? Not necessarily.

Good value all around
Even though the stock has done quite well and the big-box competitors are offering more and more $1-or-less goods, the prospects for Dollar General remain compelling, especially considering valuation.

The stock trades at just more than 15 times forward earnings -- more expensive than Wal-Mart's 13 times forward earnings but with a more attractive business. In the previous quarter, Wal-Mart saw its same store sales fall, prompting a stock sell-off and fear that the retailing giant couldn't find growth. Compared to its dollar store peers, Dollar General trades at a P/E discount to Family Dollar (16.88 times) and Dollar Tree (16.58 times).

Though not trading at a steep discount, the company's strong same-store sales growth, new product introductions (namely tobacco), and cautious yet commendable management team make for one of the best discount retail picks around.