Dollar General (DG) Tops Q1 EPS by 63c, Revenues Beat; Offers FY21 EPS Outlook
Dollar General (NYSE: DG) reported Q1 EPS of $2.82, $0.63 better than the analyst estimate of $2.19. Revenue for the quarter came in at $8.4 billion versus the consensus estimate of $8.13 billion.
- Net Sales Decreased 0.6% to $8.4 Billion
- Same-Store Sales Decreased 4.6%; Increased 17.1% on a two-year stack basis1
- Operating Profit Increased 4.9% to $908.9 Million
- Diluted Earnings Per Share (“EPS”) Increased 10.2% to $2.82
- Cash Flows From Operations of $703.0 Million
- Board of Directors Declares Quarterly Cash Dividend of $0.42 per share
“We are pleased with our strong start to fiscal 2021, and I want to thank our associates for their unwavering commitment to supporting our customers, communities, and each other,” said Todd Vasos, Dollar General’s chief executive officer. “As a testament to their efforts, our first-quarter results exceeded our expectations, reflecting strong underlying performance across the business, which we believe was enhanced by the most recent round of government stimulus payment. Given our first-quarter outperformance, we are raising our financial outlook for fiscal 2021.”
“During the first quarter, we executed more than 800 real estate projects, including new store openings in our pOpshelf and larger footprint Dollar General formats. In addition, we remained focused on serving our customers, while further advancing our key strategic initiatives. Looking ahead, we are excited about our plans and believe we are well-positioned to continue delivering long-term sustainable growth and value for our shareholders.”
GUIDANCE:
Dollar General sees FY2021 EPS of $9.50-$10.20, versus the consensus of $9.58.
Fiscal Year 2021 Financial Guidance and Store Growth Outlook
As noted above, the Company believes its first quarter results were positively impacted by consumer behavior related to government stimulus payments. Nonetheless, significant uncertainty continues to exist regarding the severity and duration of the COVID-19 pandemic, including its impact on the U.S. economy, consumer behavior and the Company’s business, which makes it difficult for the Company to predict specific financial outcomes for the fiscal year ending January 28, 2022 (“fiscal year 2021”). In addition, such outcomes could be impacted by several variables, which include, but are not limited to, any additional government stimulus payments, economic recovery, employment levels, COVID-19 vaccine status, and the ongoing impact of the COVID-19 pandemic.
However, to reflect the strong results in the first quarter, which exceeded the Company’s expectations, the Company is updating its financial guidance issued on March 18, 2021.
For fiscal year 2021, the Company now expects the following:
- Net sales in the range of a 1% decline to an increase of 1%; compared to its previous expectation in the range of a 2% decline to flat
- Same-store sales decline of 5% to 3%, which reflects growth of approximately 11% to 13% on a two-year stack basis2; compared to its previous expectation of a decline of 6% to 4%
- Diluted EPS in the range of $9.50 to $10.20, which reflects a compound annual growth rate in the range of approximately 20% to 24% (or in the range of approximately 19% to 23% compared to 2019 Adjusted diluted EPS) over a two-year period3; compared to its previous expectation in the range of $8.80 to $9.50
- This Diluted EPS guidance assumes an effective tax rate in the range of 22% to 23%
- Share repurchases of approximately $2.2 billion; compared to its previous expectation of approximately $1.8 billion
In addition, the Company continues to expect capital expenditures, including those related to investments in the Company’s strategic initiatives, in the range of $1.05 billion to $1.15 billion.
The Company is also reiterating its plans to execute 2,900 real estate projects in fiscal year 2021, including 1,050 new store openings, 1,750 store remodels, and 100 store relocations.
For earnings history and earnings-related data on Dollar General (DG) click here.