Dollar General Reports Sales Growth Despite Trying Weather Conditions
GOODLETTSVILLE, TN - Dollar General has released its first quarter 2018 financial results, reporting positive sales growth and reaffirming its 2018 guidance despite trying condition.
"Our team delivered strong net sales growth, a solid same-store sales increase, and gross margin expansion, while continuing to execute our cost containment strategy," said Todd Vasos, Dollar General's Chief Executive Officer. "We are proud of our execution and solid performance, particularly given the significant weather-related headwind we faced during the first quarter. We are pleased with the start of the second quarter, and based on our year-to-date performance and outlook for the remainder of 2018, we are reiterating our full-year guidance. We offer a unique value and convenience proposition that continues to resonate with customers, and we are excited about the initiatives we have in place."
According to a press release, the following statistics detail its financial results:
- Diluted Earnings Per Share ("EPS") increased 33.3% to $1.36
- Cash Flows from operations increased 7.5% to $549 million
- $228 Million returned to shareholders through share repurchases and cash dividends
- Company reiterates Fiscal Year 2018 Financial Guidance
- Board of Directors Declares Second Quarter 2018 Cash Dividend of $0.29 per share
- When looking to the future, the company projects that the 52-week fiscal year ending on February 1st of 2019 will show growth, as discussed in its previous store outlook issued on March 15th.
The company’s net sales rose 9 percent to $6.1 billion, due to new stores’ sales contributions. This was moderately impacted by store closures, but the store saw an overall spike. Further, the company’s same-store sales jumped 2.1 percent, which the company expresses were due to higher averages on transactions. The growth in same-store sales was a result of large sales of consumables, which were offset by apparel, seasonal, and home categories.
The cold and damp weather on certain product categories also negatively impacted same-store sales for this first quarter; nevertheless, the company's net sales increased.
Dollar General expects that its 2018 fiscal year will ultimately lead to an unchanged operating margin rate when compared with 2017’s. It also expects that its 2018 diluted EPS will land between $5.95 and $6.15, and its diluted EPS guidance will likely assume an estimated effective tax rate between 22 and 23 percent. In addition to these stats, the company expects a cash benefit of about $300 million for fiscal 2018, as a result of TCJA, according to the press release.
To top off these expectations, Dollar General has its mind set on opening 900 new stores, remodeling 1,000 stores, and relocating 100 stores within this 2018 fiscal year.
For more details on the company’s fiscal results, check out the full press release here.
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