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GOODLETTSVILLE, Tenn. — Dollar General Corp. cited an increase in customer traffic and market share gains in posting financial results for its first quarter that surpassed analysts’ forecasts.
Net sales for the 13 weeks to May 3 increased 6.1% to $9.9 billion.
Same-store sales were up 2.4%, with the increase in store traffic partially offset by smaller average transaction amounts, on average. The overall increase included growth in the consumables category, partially offset by declines in home products, seasonal, and apparel categories.
Dollar General reported gross profit as a percentage of net sales at 30.2%, down from 31.6% a year earlier, with the result hurt by higher markdowns and an increase in inventory lost or damaged due to theft, breakage or other factors.
Per-share profit was $1.65, compared with expectations of $1.57.
“We are pleased with our start to 2024, including top- and bottom-line results that exceeded our expectations in the first quarter,” Todd Vasos, Dollar General’s chief executive officer, said in a statement. “I want to thank our entire team for their dedication to fulfilling our mission of serving others every day. Because of their efforts, we continue to make progress executing on our Back to Basics strategy, which we believe is resonating positively with our customers in the store. Looking ahead, we continue to focus on actions designed to enhance the way we support our teams and serve our customers, while creating sustainable long-term value for our shareholders.”
Additions to property and equipment in the first quarter totaled $342 million, including approximately: $132 million for improvements, upgrades, remodels and relocations of existing stores; $117 million related to store facilities, primarily for leasehold improvements, fixtures and equipment in new stores; $78 million for distribution and transportation-related projects; and $13 million for information systems upgrades and technology-related projects.
Dollar General opened 197 new stores during the first quarter, remodeled 463 stores, and relocated 21 stores.
The company expects same-store sales for the current quarter to increase in the low 2% range versus analysts’ expectation of 2.25% growth. It forecasts profit of between $1.70 a share and $1.85 per share, compared with estimates of $1.92.
Dollar General reiterated its forecast for the 52-week fiscal year ending January 31. The company expects net sales to increase in the range of 6% to 6.7%, with same-store sales increasing between 2% and 2.7% from the preceding year. The company expects diluted per-share earnings in the range of $6.80 to $7.55.
