Dollar General (DG) Tops Q2 Views on Strong Consumable Sales; Sharpens FY11 Outlook
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Dollar General Corp. (NYSE: DG) shares are trading higher following second-quarter earnings results Tuesday morning.
Revenue increased 11.2 percent from $3.214 billion to $3.575 billion. Comparable-store sales in the period accelerated from the first quarter to 5.9 percent.
Net income rose 3.4 percent to $146.04 million, or 42 cents per diluted share. Adjusting for losses related to the early repayment of long-term obligations, earnings rose to 52 cents per share, compared with 42 cents per share in the same period last year.
The Street was looking for revenue of $3.54 billion and earnings of 48 cents per share.
Leading the growth charge was consumables, such as packaged goods, candy and snacks, and perishables, while home, apparel, and seasonal offerings lagged on less discretionary consumer spending.
Gross profit fell 10 basis points to 32.1 percent of total sales due to the increased purchases of lower gross margin consumables.
Looking ahead, Dollar General sees fiscal 2011 sales increasing 12 to 14 percent, to a range of $14.613 billion to $14.862 billion. The Street is currently looking for sales of $14.61 billion. Earnings are expected to grow 18 to 22 percent on an adjusted basis, for a range of $2.22 to $2.30. The guidance is raised from prior guidance of 11-13 percent growth on sales and EPS of $2.20-$2.30.
Dollar General shares are 6.2 percent higher early Tuesday. Investors may want to keep an eye on peers 99 Cents Only Stores (NYSE: NDN), Dollar Tree (Nasdaq: DLTR) and Family Dollar (NYSE: FDO).
Revenue increased 11.2 percent from $3.214 billion to $3.575 billion. Comparable-store sales in the period accelerated from the first quarter to 5.9 percent.
Net income rose 3.4 percent to $146.04 million, or 42 cents per diluted share. Adjusting for losses related to the early repayment of long-term obligations, earnings rose to 52 cents per share, compared with 42 cents per share in the same period last year.
The Street was looking for revenue of $3.54 billion and earnings of 48 cents per share.
Leading the growth charge was consumables, such as packaged goods, candy and snacks, and perishables, while home, apparel, and seasonal offerings lagged on less discretionary consumer spending.
Gross profit fell 10 basis points to 32.1 percent of total sales due to the increased purchases of lower gross margin consumables.
Looking ahead, Dollar General sees fiscal 2011 sales increasing 12 to 14 percent, to a range of $14.613 billion to $14.862 billion. The Street is currently looking for sales of $14.61 billion. Earnings are expected to grow 18 to 22 percent on an adjusted basis, for a range of $2.22 to $2.30. The guidance is raised from prior guidance of 11-13 percent growth on sales and EPS of $2.20-$2.30.
Dollar General shares are 6.2 percent higher early Tuesday. Investors may want to keep an eye on peers 99 Cents Only Stores (NYSE: NDN), Dollar Tree (Nasdaq: DLTR) and Family Dollar (NYSE: FDO).
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