US discount retailer Dollar General said it delivered a "strong" third-quarter after recording an increase in earnings.

Net income increased by 14% in the three months ended 1 November to US$237m from $208m in the comparable period last year. The figure includes a benefit of $6m, resulting from the reversal of income tax reserves established in 2009.

Net sales increased 10.5% to $4.38bn in the quarter, while same-store sales were up 4.4%, with increases in both customer traffic and average transaction value.

Dollar General said it recorded a "better than anticipated" gross margin performance in the period.

"Dollar General once again delivered strong results in the third quarter, even in the face of an ongoing challenging consumer environment," said CEO Rick Dreiling. "Our merchandising initiatives have continued to be successful in driving traffic and sales.

"Looking ahead, while we are cautious on the current macroeconomic trends, we remain excited about the long-term growth prospects for our business."