Nomura Securities Maintains a 'Neutral' on Dollar General (DG); Q1 Preview

Nomura Securities maintains a 'Neutral' on Dollar General (NYSE: DG)

Nomura analyst, Aram Rubinson, said, "Our $0.46 EPS estimate is $0.04 below consensus. A 3% comp projection (vs the Street’s +4.5%) explains half the variance—a lower GM view (-17bp) the remainder. Two-year sales trends at lower-income-focused businesses suggest potential upside to our 3% comp projection. There is less evidence for a gross margin beat, however. While DG’s FIFO-GM spiked to 270bp in Q4 on a two-year basis, we are not confident extrapolating this for another quarter. In addition, inventory growth ahead of sales (+500bp last quarter) may also work against gross margin trends."

For more ratings news on Dollar General click here and for the rating history of Dollar General click here.

Shares of Dollar General closed at $33.89 yesterday.

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