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GOODLETTSVILLE, Tenn. — Second quarter sales rose more than 10% at Dollar General Corp. as new stores and a 5.1% increase in same-store sales drove the top line. In addition, net income soared 47% to $214 million, or 64 cents per diluted share.
Second quarter sales rose more than 10% at Dollar General Corp. as new stores and a 5.1% increase in same-store sales drove the top line. In addition, net income soared 47% to $214 million, or 64 cents per diluted share.
Excluding special items, primarily debt repurchase, adjusted net income rose 27.3% to $230.9 million, or 69 cents per share. Analysts polled by Thomson Reuters had predicted profit of 64 cents per share on average.
The company benefited from a decrease in its effective tax rate due to the favorable resolution of income tax audits that added $14.5 million, or 4 cents per share, to the bottom line.
Net sales, meanwhile, rose 10.1% to $3.95 billion, led by sales of consumable items, which rose 11.9% to $2.92 billion, or 74% of the top line. Executives attributed the strong consumables performance to changes in and expansion of its offerings in candy and snacks as well as perishable food. Sales were also strong in the home and seasonal categories.
The chain finished the quarter with 10,203 stores in 40 states, including 90 Dollar General Markets and 70 Dollar General Plus outlets. According to chairman and chief executive officer Rick Dreiling, the company’s 27 stores in California are “off to a great start.” The store base in the Golden State thus far consists of just four traditional Dollar General outlets, 14 Dollar General Plus units (which measure about 10,000 square feet) and nine Dollar General Markets.
Dollar General has opened 295 stores during the first half of fiscal 2012 while remodeling or relocating 416. Plans call for the chain to open about 625 stores in the course of the fiscal year, including 40 Dollar General Markets, while remodeling or relocating approximately 575 units.
Based on the second quarter performance, Dollar General has raised its full-year earnings guidance to a range of $2.77 to $2.85 per share, including the 4 cents-per-share benefit from the favorable tax audit settlement. Analysts’ average forecast was $2.81 per share.
