Shares of discount-retailer Dollar General (NYSE:DG) were up more than 5% on Thursday's open following the second-quarter report. Analysts had estimated revenue of $4.4 billion and earnings per share of $0.70.Dollar General met on revenue and beat with EPS of $0.74. Profits were up 14% and comparable-store sales grew more than 4%. So Dollar General delivered on the key metrics. But what else was revealed in the earnings release?

Here are three key takeaways from Dollar General's third-quarter press release.  

1. Strength in lead segment 
Consumables remained Dollar General's leading segment in the third quarter with nearly 12% year-over-year growth. Seasonal and home products were tied at 7.3% growth while apparel grew more than 2%. Apparel growth had slowed due to the company's planned reduction in inventory.

Candy and tobacco drove the consumables growth and the segment now accounts for about 76% of total net sales. Discount stores in general remain strong in consumables because the low prices are hard to beat. Growth in the other segments has slowed as Wal-Mart drops prices to remain competitive and eats away some of the customer base that discount stores wooed during the recession. 

But Dollar General has managed particularly good comps growth this quarter. Family Dollar Stores(NYSE:FDO) consumables were up 8.3% but performance in that segment was offset by a nearly 5% comps loss in apparel and accessories that lead to a flat quarter overall.

2. Buyback and leaseback
Dollar General repurchased 3.5 million shares of outstanding common stock in the third quarter to the tune of $200 million. That brings the buyback total up to $1.3 billion since the program began in late 2011. The company used the press release to announce the approval of an additional $1 billion in future buybacks.

The company also has a leaseback program in progress. Last month, Dollar General announced plans to sell and lease back 233 buildings the company currently owns. The process should finish next month and bring in $200 million.

3. Full-year guidance
Dollar General updated its full-year guidance to EPS between $3.18 and $3.22. Analyst estimates are at the high end of that guidance, but Dollar General has a history of outperforming on EPS.

The company expects revenue to increase around 10% on last year's $16 billion, which is down from previous guidance but would come in near analyst estimates. Dollar General expects comps to grow between 4% and 4.5%, which is also down slightly from previous guidance. 

Foolish final thoughts 
Dollar General continues to win on consumables sales but is also making a smart move in scaling back the under-performing apparel segment. The beat over Family Dollar also suggests that Dollar General has the more desirable inventory. Guidance was adjusted down this quarter but the year should still come in around analyst estimates.

 

Brandy Betz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.