Dollar General Touts Strong Earnings, Expands Fresh Produce to 400+ Stores with More on the Way
GOODLETTSVILLE, TN - Following the announcement of a strong fourth quarter in 2017, Dollar General announced plans to step further into the fresh produce arena. In total, the company has plans to reach 450 remodeled stores that will include fresh produce, as well as strategic initiatives to keep it on the road for success.
“During the year, we continued to make progress on the implementation of our key initiatives as we seek to capture growth opportunities over both the short and long-term. Our SG&A investments in 2017 were focused primarily on increased compensation structure and additional training for our store managers, as they play a critical role in our customers' experience and the profitability of each store,” CEO Todd Vasos said in a recent conference call the company held. “We also continue to make proactive and targeted investments in support of key strategic initiatives that we believe will help further differentiate us from the competition over time. I'll provide additional details on two of these initiatives pertaining to the digital and non-consumable strategies later in the call.”
He goes on to point out that the company’s financials include the following:
- Full-year net sales increased 6.8 percent to $23.5 billion, compared to 2016’s $22 billion—net sales for 2016 included $398.7 million from the 53rd week; therefore, this year’s 52-week fiscal year net sales would reflect the growth rate by about 2 percentage points higher
- Same-store sales for the year jumped 2.7 percent in comparison with 2016, making this the 28th year the company has seen same-store sales growth
- Same-store sales growth for the fourth quarter, specifically, jumped 3.3 percent in comparison with 2016’s fourth quarter as a result of positive performance in consumables and non-consumable categories, with consumables showing more growth
- For the full year, diluted EPS was $5.63; adjusted diluted EPS was $4.49
- For the fourth quarter, diluted EPS was $2.63; adjusted diluted EPS was $1.48
- The generation of cash increased 12 percent with operations of $1.8 billion, with a return of $863 million to shareholders through the combination of share repurchases and quarterly cash dividends
In addition to new distribution centers that will prop up the company for future growth, Vasos explained that new stores, relocations, and remodels, are on the horizon, as the company continues to enjoy returns moving forward.
“Of the 1,000 planned store remodels for 2018, we expect approximately 400 locations to be in the Dollar General traditional plus format, bringing the total traditional plus store count to about 750 by yearend. These remodels incorporate a cooler set of 34 doors for increased perishable selection. Our cooler door expansion has proven to drive baskets and trips with our existing customer base, while also attracting new customers with an expanded offering,” Vasos shared during the call. “Additionally, across about a third of these locations, we are including an assortment of fresh produce, bringing the total number of Dollar General stores with produce to around 450 by yearend. While it's still early, prior year traditional plus remodels are yielding strong same-store sales results. The ability to offer produce, particularly in areas with limited grocery availability, represents an attractive growth opportunity for Dollar General in the years ahead.”
Further, the company closed 35 underperforming stores, but Vasos clarified that the company’s real estate portfolio is in great shape.
With Dollar General jumping into the ring with a new total of 450 fresh produce featuring markets, how will this projected advancement in Dollar General shake up the industry? AndNowUKnow will continue to report.