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Factors to Know Ahead of Dollar General's (DG) Q2 Earnings
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Dollar General Corporation (DG - Free Report) is likely to register an increase in the top line when it reports second-quarter fiscal 2020 results on Aug 27, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $8,283 million, indicating growth of 18.6% from the prior-year quarter.
Further, the bottom line of this discount retailer is also expected to improve year over year. We note that the Zacks Consensus Estimate for earnings for the quarter under review has increased by a couple of cents to $2.37 over the past 30 days. Notably, the figure suggests a sharp improvement from $1.74 reported in the year-ago period.
Notably, the company has a trailing four-quarter earnings surprise of 16.9%, on average. In the last reported quarter, this Goodlettsville, TN-based company surpassed the Zacks Consensus Estimate by a significant margin.
Key Factors to Note
Dollar General’s better price management, private label offering, effective inventory management and operational initiatives have been driving sales. The top line is also likely to have benefited from coronavirus-led demand and shift to food-at-home trend as maintaining social distancing have become the “new normal.”
In order to increase traffic, Dollar General has been focusing on both consumables and non-consumables categories. The company has also been offering “better-for-you” products at affordable prices. Additionally, it has been expanding cooler facilities to enhance the sale of perishable items and rolling out DG digital coupon program and DG Go app.
Notably, management’s two transformational strategic initiatives, DG Fresh, designed to enable self-distribution of fresh and frozen products, and Fast Track, an in-store labor productivity and customer convenience initiative have been driving results.
Backed by the aforementioned tailwinds, Dollar General boasts an impressive same-store sales trend. Rise in average transaction and customer traffic have been driving the metric. Management at its last earnings call stated that since the end of the first quarter and through May 26, same-store sales have risen roughly 22% compared with prior-year period.
However, we note that any disruption in supply chain, unprecedented increase in distribution and transportation costs, higher payroll expenses, and rise in expenses associated to maintain safe work and shopping environments are likely to get reflected in margins.
Dollar General Corporation Price, Consensus and EPS Surprise
Our proven model predicts an earnings beat for Dollar General this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Dollar General has a Zacks Rank #2 and an Earnings ESP of +9.64%.
3 Stocks With Favorable Combination
Here are some other companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Ollies Bargain (OLLI - Free Report) currently has an Earnings ESP of +8.67% and a Zacks Rank #2.
Hain Celestial (HAIN - Free Report) has an Earnings ESP of +2.94% and a Zacks Rank #3 at present.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.3% per year.
These 7 were selected because of their superior potential for immediate breakout.
Image: Bigstock
Factors to Know Ahead of Dollar General's (DG) Q2 Earnings
Dollar General Corporation (DG - Free Report) is likely to register an increase in the top line when it reports second-quarter fiscal 2020 results on Aug 27, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $8,283 million, indicating growth of 18.6% from the prior-year quarter.
Further, the bottom line of this discount retailer is also expected to improve year over year. We note that the Zacks Consensus Estimate for earnings for the quarter under review has increased by a couple of cents to $2.37 over the past 30 days. Notably, the figure suggests a sharp improvement from $1.74 reported in the year-ago period.
Notably, the company has a trailing four-quarter earnings surprise of 16.9%, on average. In the last reported quarter, this Goodlettsville, TN-based company surpassed the Zacks Consensus Estimate by a significant margin.
Key Factors to Note
Dollar General’s better price management, private label offering, effective inventory management and operational initiatives have been driving sales. The top line is also likely to have benefited from coronavirus-led demand and shift to food-at-home trend as maintaining social distancing have become the “new normal.”
In order to increase traffic, Dollar General has been focusing on both consumables and non-consumables categories. The company has also been offering “better-for-you” products at affordable prices. Additionally, it has been expanding cooler facilities to enhance the sale of perishable items and rolling out DG digital coupon program and DG Go app.
Notably, management’s two transformational strategic initiatives, DG Fresh, designed to enable self-distribution of fresh and frozen products, and Fast Track, an in-store labor productivity and customer convenience initiative have been driving results.
Backed by the aforementioned tailwinds, Dollar General boasts an impressive same-store sales trend. Rise in average transaction and customer traffic have been driving the metric. Management at its last earnings call stated that since the end of the first quarter and through May 26, same-store sales have risen roughly 22% compared with prior-year period.
However, we note that any disruption in supply chain, unprecedented increase in distribution and transportation costs, higher payroll expenses, and rise in expenses associated to maintain safe work and shopping environments are likely to get reflected in margins.
Dollar General Corporation Price, Consensus and EPS Surprise
Dollar General Corporation price-consensus-eps-surprise-chart | Dollar General Corporation Quote
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Dollar General this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Dollar General has a Zacks Rank #2 and an Earnings ESP of +9.64%.
3 Stocks With Favorable Combination
Here are some other companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Big Lots (BIG - Free Report) presently has an Earnings ESP of +10.57% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ollies Bargain (OLLI - Free Report) currently has an Earnings ESP of +8.67% and a Zacks Rank #2.
Hain Celestial (HAIN - Free Report) has an Earnings ESP of +2.94% and a Zacks Rank #3 at present.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.3% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>