Discount retailer Dollar General (DG) reported a 38% jump in earnings for the second quarter helped by contributions from its mature store base and robust performance of its new stores. The top and bottom line came in above analysts’ expectations. As expected, Dollar General repeated the bullish trends set by its rivals including TJX Companies (TJX), Ross Stores (ROST) and Kohl’s (KSS), all reported stellar results.
The stock is down about 2% in the pre-market session as investors were concerned about the raised top-line guidance not being carried over to the bottom line, which remained unchanged.
Earnings for the quarter climbed by 38% to $407.2 million or $1.52 per share. Net sales grew by 10.6% to $6.4 billion, aided by the sales contribution from new stores and growth in same-store sales despite the impact of store closures.
Same-store sales increased 3.7% from the prior-year period driven by an increase in average transaction amount and customer traffic. Growth in same-store sales was driven by positive results in the consumables, seasonal and apparel categories, partially offset by sales declines in the home category.
The company declared a quarterly cash dividend of $0.29 per share on its common stock. The dividend is payable on or before October 23, 2018, to shareholders of record on October 9, 2018.
Looking ahead into the fiscal year 2018, Dollar General raised its net sales growth outlook to the range of 9% to $9.3% from prior estimate of about 9%, and its same-store sales growth forecast to the mid-to-high 2% range from the prior estimate of mid-2% range. Diluted EPS is still expected to be in the range of $5.95 to $6.15.
In addition, the company still predicts share repurchases for the full year to be about $850 million, and capital expenditures to be in the range of $725 million to $800 million. Dollar General reiterated its plans to open about 900 new stores, remodel 1,000 stores and relocate 100 stores in the fiscal year 2018.
Shares of Dollar General ended Wednesday’s regular session down 0.13% at $106.70 on the NYSE. The stock had surged 39% in the past year and more than 14% year-to-date.
Most Popular
United Parcel Service (UPS) seems on track to regain lost strength
Cargo giant United Parcel Service, Inc. (NYSE: UPS) ended fiscal 2023 on a weak note, reporting lower revenues and profit for the fourth quarter. The company experienced a slowdown post-pandemic
IPO Alert: What to look for when Boundless Bio goes public
Boundless Bio is preparing to debut on the Nasdaq stock market this week, and become the latest addition to the list of biotech firms that have launched IPOs this year.
Nike (NKE) bets on innovation and partnerships to return to high growth
Sneaker giant Nike, Inc. (NYSE: NKE) has been going through a rough patch for some time, with sales coming under pressure from weak demand and rising competition. Post-pandemic, the company