Dollar General announced the promotion of John Garratt to president and CFO as the retailer posted a solid Q2 comparable sales increase.
Garratt retains the CFO role while adding the president title. He joined Dollar General in 2014 as senior vice president, finance and strategy, the company noted, and has served as executive vice president and CFO since December 2015.
In the second quarter, the company posted a net income of $678 million, or $2.98 per diluted share, versus $637 million, or $2.69 per diluted share, in the 2021 period.
Dollar General beat a Yahoo Finance-published analyst consensus estimate of $2.93 in earnings and $9.4 billion in sales.
Comparable sales increased 4.6% in the quarter year over year as net sales increased 9% to $9.43 billion driven by positive comps and new store revenues, partially offset by the impact of store closures. Comp gains included growth in the consumables category, partially offset by declines in the apparel, seasonal and home products segments. Operating profit increased 7.5% to $913.4 million.
Dollar General reported total merchandise inventories in the quarter, at cost, were $6.9 billion versus $5.3 billion as of July 30, 2021, up 25.1% on a per-store basis. The increase primarily reflected the impact of product cost inflation and a greater mix of higher-value products, particularly in the home and seasonal categories, due to the continued rollout of a company non-consumables initiative, Dollar General reported.
In a conference call, Jeff Owen, the company’s CEO, pointed out the non-consumable initiative was available in about 15,000 Dollar General stores at the end of the second quarter. He said the company remains pleased with the strong sales and margin performance seen across the NCI store base. This treasure hunt offering, he indicated, continues to resonate with value-seeking shoppers as 80% of the assortment is priced at $5 or less.
In announcing the second quarter results Todd Vasos, Dollar General’s CEO, said, “The quarter was highlighted by same-store sales growth of 4.6%, a slight increase in customer traffic, accelerated growth in market share of highly consumable product sales, and double-digit growth in EPS. During the quarter, we also made significant progress advancing our operating priorities and strategic initiatives, further enhancing our unique value and convenience proposition. Looking ahead, we are confident that our strategic actions, which have transformed this company in recent years and solidified Dollar General as the clear leader in small-box discount retail, have positioned us well for continued success while supporting long-term shareholder value creation.”