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March 14, 2024

Dollar General Beats Street in Q4 Despite Earnings Decline

Posted In: Retail Articles

Dollar General beat a fourth-quarter Wall Street estimate, although net income declined even as comps edged higher.

The company reported net income of $401.8 million, or $1.83 per diluted share, versus $659.1 million, or  $2.96 per diluted share, in the year-before period, the company noted.

An analyst consensus estimate published by Yahoo Finance forecast earnings per diluted share of $1.75 and revenues of $9.78 billion.

Comparable sales increased 0.7% in the quarter year over year, driven by an increase in customer traffic, partially offset by a decline in average transaction amount. Fourth-quarter comp growth came from the consumables category, partially offset by declines in the home products, seasonal and apparel segments, according to Dollar General. 

Net sales decreased to $9.86 billion from $10.2 billion in the year-earlier quarter, which included net sales for the 53rd week of $678.1 million. The net sales decrease primarily resulted from the period containing one less week of sales than in the fiscal 2022 quarter, Dollar General maintained, as well as the impact of store closures partially offset by positive sales contributions from new stores and comp growth. Operating profit was $579.7 million versus $933.2 million in the period a year prior.

Dollar General reported fiscal-year net income of $1.66 billion, or  $7.55 per diluted share, versus $2.42 billion, or $10.68 per diluted share, in the year before. The decrease included negative impacts of four percentage points because of lapping the fiscal 2022 53rd week and four points because of higher interest expense.

Net sales increased to $38.69 billion from $37.84 billion in the year earlier, which included the $678.1 million in net sales for the 53rd week. The net sales increase primarily resulted from positive sales contributions from new stores and 0.2% comp growth, partially offset by the impact of store closures. Operating profit was $2.45 billion versus $3.33 billion in the year prior. 

“We were pleased to deliver fourth quarter top and bottom-line results at the upper end of our internal expectations,” said Dollar General CEO Todd Vasos. “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.”

Vasos added, “We have made solid progress executing on our ‘Back to Basics’ strategy, which we believe supported our improved operational performance during the quarter. While we are pleased with the operational improvement we have seen, we believe that significant opportunity remains as we continue to focus on enhancing the way we support our teams and serve our customers.”

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