Dollar General (DG) Reports In-Line Q1 EPS; Guides FY13 EPS Below Views
Dollar General (NYSE: DG) reported Q1 adjusted EPS of $0.71, in-line with the analyst estimate of $0.71. Revenue for the quarter came in at $4.23 billion versus the consensus estimate of $4.24 billion.
Comps up 2.6 percent and net sales rose 8.5 percent.
Gross profit fell 89 basis points to 30.6 percent. Dollar General cited higher markdowns, higher mix of consumables, increased inventory shrinkage, and lower initial markups on the lower margin.
We have updated our outlook for the year to reflect moderating sales growth and a lower expected gross profit rate than we previously anticipated,” commented CEO Rick Dreiling. "...Sales of non-consumables are expected to remain challenging, and we anticipate a continued shift to lower margin items within consumables and higher inventory shrink. We believe that our customers’ dependence on our everyday low pricing and convenient locations has never been greater.
Sees FY2013 EPS of $3.15 to $3.22, versus the consensus of $3.28. The company also sees sales increasing 10 percent to 11 percent with comps up 4 percent to 5 percent.
Capital expenditures are expected to be in the range of $575 million to $625 million in 2013. Approximately 50 percent of planned capital spending is for investment in store growth and development, including new stores, remodels, relocations and purchases of existing store locations; approximately 30 percent is planned for transportation, distribution and special projects; and the remaining 20 percent is expected to be spent on maintenance capital.
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