Dollar General (DG) Q3 Results Alleviate Fears - Goldman
On Thursday morning, Dollar General (NYSE: DG) reported Q1 EPS of $0.72, $0.02 better than the analyst estimate of $0.70. Revenue for the quarter came in at $4.38 billion versus the consensus estimate of $4.42 billion. In the view of Stephen Grambling, results alleviate fears related to weak performance at peers.
"The softer top line was more than offset by less gross margin pressure (-60bp vs. our -70bp) and better SG&A leverage (-40bp vs. our -35bp), leading to a $0.01 EBIT beat. Below the line, lower interest and lower taxes added a penny. Management raised the low end of its FY13 guidance to $3.18-$3.22 from $3.15- $3.22 (vs. GS/Consensus of $3.19/$3.22) on comp growth of 4%-5%. The company also plans to open 700 new stores in FY14 and remodel or relocate 525 stores, resulting in total selling square footage growth of 6-7%," said Grambling.
"With expectations lower after soft results from peers, we believe the better results will alleviate fears despite the softer top line," he added.
For an analyst ratings summary and ratings history on Dollar General (NYSE: DG) click here. For more ratings news on Dollar General click here.
Shares of Dollar General closed at $56.37 yesterday, with a 52 week range of $39.73-$59.87.
"The softer top line was more than offset by less gross margin pressure (-60bp vs. our -70bp) and better SG&A leverage (-40bp vs. our -35bp), leading to a $0.01 EBIT beat. Below the line, lower interest and lower taxes added a penny. Management raised the low end of its FY13 guidance to $3.18-$3.22 from $3.15- $3.22 (vs. GS/Consensus of $3.19/$3.22) on comp growth of 4%-5%. The company also plans to open 700 new stores in FY14 and remodel or relocate 525 stores, resulting in total selling square footage growth of 6-7%," said Grambling.
"With expectations lower after soft results from peers, we believe the better results will alleviate fears despite the softer top line," he added.
Goldman Sachs has a Neutral rating on Dollar General with a price target of $64.00.
For an analyst ratings summary and ratings history on Dollar General (NYSE: DG) click here. For more ratings news on Dollar General click here.
Shares of Dollar General closed at $56.37 yesterday, with a 52 week range of $39.73-$59.87.