Dollar General sales picking up
Dollar General said it saw increases in sales and earnings for the first quarter despite the challenges of poor weather and tough economic conditions.
Dollar General’s first quarter same-store sales improvement of 1.5 percent “reflected the challenges of unfavorable winter weather, heightened competition and the current economic environment,” said Rick Dreiling, Dollar General’s chairman and ceo.
The company reported net income of $222 million, or 72 cents per diluted share, in the 2014 first quarter ended May 2, compared to net income of $220 million, or 67 cents per diluted share. Dollar General delivered EPS of 72 cents, in line with its guidance.
Dreiling said customer traffic and average transaction amounts increased for the 25th consecutive quarter. He said that business began to improve in April and that the momentum continues.
Net sales increased 6.8% to $4.52 billion in the first quarter compared to $4.23 billion in the 2013 first quarter. Sales were impacted by unfavorable weather conditions during much of the quarter, a competitive retail environment and continued financial pressures on its core customers, the company said.
Gross profit, as a percentage of sales, was 30.0% in the 2014 first quarter, a decrease of 57 basis points from the 2013 first quarter. Markdowns were higher in the 2014 first quarter, because of increased promotional activity.
David Tehle, cfo, said the company managed its inventory effectively in the first quarter. As of May 2, total merchandise inventories, at cost, were $2.61 billion compared to $2.41 billion as of May 3, 2013, an increase of one percent on a per-store basis.
During the 2014 first quarter, the company opened 214 new stores and plans to open approximately 700 new stores in 2014 and to relocate or remodel approximately 500 stores.
For the 2014 fiscal year, the retailer expects total sales to increase 8% to 9% over the 2013 fiscal year, with same-store sales expected to increase 3% to 4%. Diluted EPS for the fiscal year is expected to be approximately $3.45 to $3.55.
Source: Home Textiles Today