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GOODLETTSVILLE, Tenn. — Dollar General Corp. posted mixed financial results for its third quarter, with profits falling while sales topped expectations on the strength of increased customer traffic and the opening of new stores.
The company, which is once again being led by chief executive officer Todd Vasos, also announced leadership changes, including two returning company veterans.
Jeff Mooney has rejoined the company as senior vice president of store operations. In this role, Mooney will oversee retail operations for more than 8,100 stores in Dollar General’s southern geographical divisions. Mooney previously served in various roles of increasing responsibility at Dollar General from 2007 to 2021, including as divisional vice president. In his most recent role, he was responsible for leading the vision and operational strategy to optimize profitability at an educational institution.
Scott Kear has rejoined Dollar General as divisional vice president. He will lead store operations including sales, talent strategies and performance optimizations with leadership over 10 regions. Kear is a tenured retail operations leader with more than 10 years of experience in driving process improvement and building high-performance teams. In his most recent role, he led sales and operations with an emphasis on business development for more than 130 stores across the country. Kear previously served as a regional director at Dollar General.
Dollar General has also named Jeff Rudy to the role of senior vice president of transportation. He will oversee all aspects of the company’s transportation function inclusive of international and domestic inbound, and responsibility for all outbound transportation including DG Private Fleet’s more than 1,800 drivers. Rudy has held roles of increasing responsibility with more than 30 years of extensive international and domestic transportation experience, including high-volume supply chain management, fleet operations, freight procurement and distribution.
And Macedonio Garza has joined Dollar General as managing director for Mexico. Garza will plan and lead Mi Súper Dollar General business operations including store operations, merchandising, supply chain and Store Support Center functions, providing overall direction for driving business growth and amplifying the brand among consumers in Mexico. He is a tenured leader with more than 25 years of retail operations expertise, having led high-performing teams for American companies based in Mexico. Garza will bring his unique understanding of the Mexican consumer and ability to drive business development and brand affinity for emerging markets to Dollar General.
Other highlights from Dollar General’s third quarter results, meanwhile, included a smaller-than-expected 1.3% decline in same-store sales. Dollar General posted a profit of $276.2 million in the quarter ended November 3, which was down from $562.2 million in the comparable period last year. Revenue was up 2.4% year on year to $9.69 billion.
“While we are not satisfied with our financial results for the third quarter, including a significant headwind from inventory shrink, we are pleased with the momentum in some of the underlying sales trends, including positive customer traffic, as well as market share gains in both dollars and units,” Vasos said. “We continue to believe our model is relevant in all economic cycles, and we are working diligently to further enhance our unique combination of value and convenience.”
Vasos rejoined Dollar General as its CEO during the quarter, after Jeff Owens was let go, a change in leadership aimed at restoring stability and confidence in the company. Vasos had previously served as CEO from June 2015 to November 2022.
Third quarter sales were influenced by a decline in average transaction amount, partially offset by increased store traffic. Shoppers spent less on apparel, consumables, home goods and seasonal merchandise.
Gross profit as a percentage of net sales was 29% in the third quarter, down from 30.5% a year earlier. Operating profit declined 41.1% to $433.5 million.
The third quarter closed with total merchandise inventories, at cost, at $7.4 billion compared to $7.1 billion a year earlier, a decrease of 1.8% on a per-store basis.
Dollar General added 990 U.S. stores in the quarter, which took its store count to 19,726. The company said it remodeled 2,000 stores in the quarter and relocated 120 stores.
For fiscal 2024, the company plans to execute about 2,385 real estate projects, with approximately 800 new store openings, including about 30 pOpshelf locations and 15 new stores in Mexico. Dollar General also expects to remodel 1,500 stores next year.
Vasos expressed confidence about Dollar General’s financial prospects going forward following his return to the helm.
“I am excited to be back at Dollar General and working with the team to fulfill our mission of serving others every day,” Vasos said in the earnings statement. “Over the last several weeks, we have spent significant time reviewing all areas of the business, and we have identified key opportunities for improvement both in the near term and over the longer term.”
