Dollar General is unstoppable
Dollar General overcame seasonal headwinds to post impressive sales growth during its first quarter, and the retailer is moving fast to grow its already large footprint.
Dollar General reported a surge in first-quarter profit during the period ended May 4, and same-store sales increased 2.1%.
“Our team delivered strong net sales growth, a solid same-store sales increase, and gross margin expansion, while continuing to execute our cost containment strategy,” said Todd Vasos, Dollar General’s chief executive officer. “We are proud of our execution and solid performance, particularly given the significant weather-related headwind we faced during the first quarter. We are pleased with the start of the second quarter, and based on our year-to-date performance and outlook for the remainder of 2018, we are reiterating our full-year guidance. We offer a unique value and convenience proposition that continues to resonate with customers, and we are excited about the initiatives we have in place.”
The company, which operates more than 14,700 stores, plans to open approximately 900 new stores, remodel 1,000 stores and relocate 100 stores in fiscal 2018.
Profit at Dollar General jumped 9 percent to $364.9 million, or $1.36 per share, in the period ended May 4. Revenue jumped 30.5 percent to $6.11 billion, but that was also shy of Wall Street projections.
The company repurchased $150 million of its common stock, or 1.6 million shares, under its share repurchase program in the first quarter of 2018, at an average price of $94.41 per share. From the inception of the share repurchase program in December 2011 through the end of the first quarter of 2018, the company has repurchased 83 million shares of its common stock at an average price of $63.80 per share, for a total cost of $5.3 billion. The total remaining authorization for future repurchases was approximately $1.2 billion at the end of the first quarter of 2018.
For the 52-week fiscal year ending Feb. 1, the company expects net sales to increase approximately 9%, with same-store sales growth estimated to be in the mid-two percent range.