* Dollar Tree Q1 adj profit $0.89/shr vs est $0.81
* Dollar General profit $1.03/shr vs est $0.95
* Dollar Tree raises FY profit forecast
* Dollar General, Dollar Tree shares hit record high (Adds details from conference call, analyst comment; updates shares)
By Sruthi Ramakrishnan
May 26 (Reuters) - Discount retailers Dollar Tree Inc and Dollar General Corp reported better-than-expected profits as more people visited their stores and spent more on average, sending their shares to record highs.
The strong results contrasted with department stores such as Macy's Inc and Target Corp, which have been hit mainly by lower demand for apparel and electronics.
Dollar Tree and Dollar General, which cater mainly to those on low incomes, were also helped by a drop in management payroll costs and lower tax bills.
Shares of Dollar Tree, the biggest U.S. discount chain, jumped 13.8 percent to $89.16 and Dollar General rose as much as 5.7 percent to $88.95.
"We are part of what I consider, in this economic environment, the most attractive sector in retail," Dollar Tree Chief Executive Bob Sasser said in a statement.
The higher-end stores have also been hurt by a surge in online shopping - particularly on Amazon.com Inc - unlike the dollar stores.
The core dollar store shoppers seem to be doing better than their higher-income counterparts, helped by rising employment, wage gains and as they are not impacted by stock market volatility, Brian Yarbrough, consumer discretionary analyst for Edward Jones, said.
Lower fuel prices have also resulted in more savings.
Dollar Tree's best-selling categories in the quarter ended April 30 included household products, food and beverage and party supplies.
Dollar General said it was seeing new categories of shoppers at its stores, including middle-income customers and millennials.
"The millennial shopper represents about 12 percent of our shoppers and 24 percent of our sales. On average, she is shopping our stores about three times a month," Dollar General CEO Todd Vasos said on a conference call.
Dollar Tree said its net sales more than doubled to $5.09 billion in the first quarter, helped by the acquisition of larger rival Family Dollar Stores in July.
This slightly missed the average analyst estimate of $5.1 billion, according to Thomson Reuters I/B/E/S.
However, the company earned 89 cents per share, excluding items, beating the average analyst estimate of 81 cents. Dollar Tree also raised its full-year profit forecast.
While both Dollar General's net sales and comparable store sales fell slightly short of average analyst estimates, net income rose a stronger-than-expected 16.5 percent to $295.1 million, or $1.03 per share. Analysts on average had expected earnings of 95 cents per share. (Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Don Sebastian and Maju Samuel)