Dollar General Corp. Reports Positive Q3 Earnings

Dollar General Corp.’s stock (DG) showed promising growth, rising by 1.9% early Thursday following the release of the company’s third-quarter earnings report. Despite expressing dissatisfaction with its overall performance, Dollar General beat analysts’ estimates and maintained its guidance.

In the third quarter, the company reported a net income of $276.2 million, which translates to $1.26 per share. This is a decrease from $526.2 million, or $2.33 per share, in the same period last year. However, sales saw a 2.4% increase, reaching $9.694 billion compared to $9.465 billion in the previous year. Analysts had predicted earnings per share of $1.20 on sales of $9.644 billion, making Dollar General’s results even more impressive.

Despite a 1.3% decline in same-store sales, Dollar General sees potential in certain aspects of its business. CEO Todd Vasos acknowledges that the financial results for Q3 were not satisfactory due to inventory shrinkage. However, he highlights positive trends in customer traffic, as well as market share gains in terms of dollars and units.

Vasos, who recently returned to his role as CEO, has conducted a thorough review of all aspects of the business. This evaluation has identified key areas for improvement in the short and long term. In fiscal year 2024, Dollar General plans to undertake approximately 2,385 real estate projects, consisting of 800 new stores, 1,500 remodels, and 85 relocations. Vasos views this as a conservative approach given the current environment.

Dollar General remains confident in its full-year guidance, projecting a sales increase ranging from 1.5% to 2.5%. Additionally, the company expects earnings per share to fall between $7.10 and $7.60. However, it does anticipate a decline of 1% to flat on same-store sales.

Despite a year-to-date decrease of 45.6% in its stock, Dollar General’s positive earnings report offers hope for the future. In comparison, the S&P 500 has achieved a 19% gain during the same period.

Key Highlights:

• Dollar General Corp.’s stock (DG) increased by 1.9% after beating Q3 earnings estimates.
• Net income for Q3 was $276.2 million, with sales reaching $9.694 billion.
• Same-store sales declined by 1.3%, but positive customer traffic and market share gains were noted.
• CEO Todd Vasos plans to implement improvements identified through a comprehensive business review.
• Dollar General plans to undertake approximately 2,385 real estate projects in fiscal year 2024.
• Full-year guidance includes projected sales growth of 1.5% to 2.5% and earnings per share ranging from $7.10 to $7.60.
• Dollar General’s stock is down 45.6% in the year-to-date period, while the S&P 500 has gained 19%.