Dollar General Beats Wall Street Expectations in Q2, Cites Increased Sales and New Stores
GOODLETTSVILLE, TN – Coming off a year of growth, Dollar General is seeing some tangible return from its investments. The company released its second-quarter results for the year, citing some sizeable growth in several areas and beating Wall Street expectations for its sales.
"I am pleased with our results at this point in the year. For the quarter, same-store sales grew 2.6%, driven by an increase in our average transaction amount and, importantly, positive customer traffic. In a dynamic retail and consumer landscape, we continue to make targeted investments in our business to execute on our focused strategic and operating initiatives which we believe will contribute to sustainable improvement over time," said Todd Vasos, CEO.
One of the most noted aspects of the report is the company’s jump in net sales. Dollar General stated in a press release that its net sales grew around 8.1%. This revenue of $5.83 billion, Seeking Alpha reported, beat expectations by $30 million.
Dollar General also noted a rise to its comparable same-store sales, which increased 2.6% and beat analysts initial estimations of a 1.6% reporting. The discount retailer noted that this boosted result was driven by positive results in the consumables category, amongst contributions from its other categories as well.
Other aspects to the company’s 2017 Q2 are as follows, when compared to results from this time last year:
- Consumables sales increased 8.9%
- Growth rate (in square footage) of 7.2%, up from 6.4%
- Earnings per share remained $1.08
- Gross profit as a percentage of net sales down to 30.72% from 31.19%
- Net income decreased from $306.5 million to $294.8 million
- Fiscal 2017 Diluted Earnings per Share Guidance updated to $4.35-$4.50, from $4.25-$4.50
Business Insider reported that Dollar General’s boosted comparable sales came from increased foot traffic to its stores, from consumers who spent more on average. Furthermore, the source cited, the small format of the chain allows the chain to boost revenue growth while its bigger competitors such as Walmart and Kroger are slashing grocery prices.
“We’re well priced today and I don’t see us having to do anything that is very dramatic,” Vasos said on a call with analysts, according to Reuters.
Analysts are already expecting more growth from Dollar General in the future. Seeking Alpha also noted that the company’s returns are solid for one that is “high growth,” also emphasizing that Dollar General’s report delivered on better than estimated comparable sales rather than just earnings as the market is “keen to see.”
Will Dollar General continue to grow, and see boosted revenues and foot traffic along the way? AndNowUKnow will continue to report on the competitive status of the buy-side.