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GOODLETTSVILLE, Tenn. — Dollar General Corp. said financial results for its fiscal 2023 fourth quarter demonstrate progress in the “back to basics” approach adopted last year when Todd Vasos returned to the company as chief executive officer.
“We were pleased to deliver fourth quarter top- and bottom-line results at the upper end of our internal expectations,” Vasos said March 13 in reporting the results. “With customer traffic growth and market share gains during the quarter, we believe our actions are resonating with customers as they turn to Dollar General for our unique combination of value and convenience.”
Net sales declined 3.4% to $9.9 billion in the quarter ended February 3, Dollar General said.
Full-year sales increased 2.2% to $38.7 billion, primarily driven by contributions from new stores and a 0.2% uptick in comparable-store sales.
Same-store sales increased 0.7% in the fourth quarter. Comps in the current quarter could be the lowest of fiscal 2024, but the company anticipates improvement in the remaining quarters, said Kelly Dilts, Dollar General’s chief financial officer.
Dollar General said fourth quarter operating profit fell 37.9% to $579.7 million. For the full year, operating profit declined 26.5% to $2.4 billion.
“We have made solid progress executing on our Back to Basics strategy, which we believe supported our improved operational performance during the quarter,” Vasos said. “While we are pleased with the operational improvement, we believe significant opportunity remains as we continue to focus on enhancing the way we support our teams and serve our customers.”
Despite relatively strong results, Vasos said shoppers remain constrained by inflation. With prices still high, customers are forced to make trade-offs, Vasos said, and that is pressuring DG’s discretionary sales categories.
Net sales growth in fiscal 2024 is projected to fall in the range of 6% to 6.7% while same-store sales growth is expected to be between 2% and 2.7%.
Dollar General noted that it did not buy back any shares in fiscal 2023, and its guidance for the current year assumes no share repurchases.
After opening its 20,000th store last month, in Alice, Texas, Dollar General plans on opening 800 more stores this year.
The company recently marked the one-year anniversary of the opening of its first store in Mexico and it is planning to have up to 15 more up and running there by year’s end.
Dollar General also is expanding its pOpshelf concept, with 30 pOpshelf stores expected to open this year. DG has said promising new formats, like pOpshelf could pave the way for expansion into the suburbs. Vasos said this month that the company is moving cautiously on the pOpshelf rollout in light of the format’s core offering in nonconsumables, making it more susceptible to weakness in discretionary spending.
“We continue to believe that the pOpshelf concept provides an additional growth opportunity but are cognizant of the near-term pressures,” Vasos said.
Dollar General reiterated its plans to execute 2,385 real estate projects in fiscal 2024, including 1,500 remodels and 85 store relocations.
