Dollar General topped analyst estimates on revenue and earnings during a second quarter when non-consumables had a strong showing for the retailer.
Net income was $550.3 million, or $2.48 per diluted share, versus $411.4 million, or $1.86 per diluted share, in the year-previous quarter, the company stated.
An analyst consensus estimate published by Zacks Investment Research pegged Dollar General earnings at $2 per diluted share on sales of $11.18 billion.
In the quarter, comparable sales increased 3.5% year over year. The comp included a 2% gain in customer traffic and a 1.5% gain in average transaction amount.
Net sales were $11.29 billion versus $10.73 billion in the year-prior quarter, Dollar General pointed out. Operating profit was $769.2 million versus $595.4 million in the year-earlier period.
Sales in the home products category increased 4.8% year over year, the company noted, while consumables gained 5%, seasonal gained 7.4% and apparel gained 4.5%.
Dollar General upgraded its full-year outlook, which now has net sales up 4% to 4.3% compared to the previous range of 3.7% to 4.2%, comp growth in the range of 2.5% to 2.9% compared to the previous expectation of 2.2% to 2.7% and diluted EPS in the range of $7.80 to $8 compared to the previous expectation of $7.20 to $7.45.
Dollar General estimated that a refund of IEEPA tariffs benefited its diluted earnings per share, which came in at $2.48 as noted, by 25 cents.
In a conference call, Todd Vasos, Dollar General CEO, noted how sales in non-consumables product categories outpaced consumables in the second quarter.
He added, “Within our merchandising initiatives, our efforts to improve the non-consumable product offering continues to resonate with the customer, as evidenced by the 4.5% increase in combined non-consumable comp sales during Q2.”
Vasos said, “We are pleased with our second-quarter performance, which included balanced topline growth, healthy operating margin expansion and strong double-digit EPS growth. These results, which exceeded our expectations even before considering the benefit from tariff refunds after related reinvestments, are a testament to the strong execution, strategic direction and continued dedication of our team.”
He added Dollar General results in the quarter “reflect continued momentum across the business, including our fifth consecutive quarter of customer traffic growth and the sixth consecutive quarter of positive comparable sales growth across all four merchandising categories. This broad-based performance reflects the strength of our unique combination of value and convenience and the important role Dollar General plays in the communities we serve.”
