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Dollar General (DG) Q4 Earnings Beat, Sales Increase Y/Y
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Dollar General Corporation (DG - Free Report) came up with fourth-quarter fiscal 2022 results, wherein the top line missed the Zacks Consensus Estimate, while the bottom line beat the same. Markedly, both net sales and earnings grew year over year. This Goodlettsville, TN-based company witnessed same-store sales growth and gained market share in consumables and non-consumables categories.
Let’s Delve Deeper
The quarterly earnings came in at $2.96 per share, which beat the Zacks Consensus Estimate of $2.94 and increased 15.2% from the prior-year period.
Net sales of $10,202.9 million rose 17.9% from the prior-year period on sales contributions from new stores and growth in same-store sales, partly offset by the impact of store closures. The top line fell short of the Zacks Consensus Estimate of $10,236 million.
Dollar General’s same-store sales increased 5.7% year over year, driven by higher average transaction amount, partly offset by a modest decrease in customer traffic. Same-store sales reflected an increase in the Consumables category, offset by a decline in each of the Seasonal, Apparel and Home Products categories.
Dollar General Corporation Price, Consensus and EPS Surprise
Based on categories, sales increased 22.7% year over year to $8,054.1 million for Consumables. Sales rose 5.7% to $1,191.7 million for Seasonal and 3.1% to $658.4 million for Home Products. However, the same declined 7.3% to $298.7 million in the Apparel category.
Gross profit increased 16.6% to $3,148.3 million in the reported quarter, while the gross margin shrunk 35 basis points to 30.9%. The contraction in gross profit margin can be attributed to higher LIFO provision, a greater proportion of sales coming from the consumable category, which carries a lower margin, as well as increases in inventory shrink, damages and markdowns. These were partly offset by higher inventory markups and a reduction in transportation costs.
SG&A expenses, as a percentage of net sales, decreased 29 basis points to 21.7% in the quarter. Operating profit jumped 17.1% to $933.2 million.
Store Update
In fiscal 2022, Dollar General opened 1,039 new stores, remodeled 1,795 stores, and relocated 127 stores. The company now anticipates carrying out 3,170 real estate projects, including 1,050 new store openings, 2,000 remodels, and 120 store relocations, in fiscal 2023.
Other Financial Details
Dollar General ended the quarter with cash and cash equivalents of $381.6 million, long-term obligations of $7,009.4 million and shareholders’ equity of $5,541.8 million.
Management incurred capital expenditures of $1.6 billion during fiscal 2022. For fiscal 2023, the company anticipates capital expenditures in the band of $1.8-$1.9 billion.
During fiscal 2022, Dollar General repurchased 11.6 million shares for $2.7 billion. The company had $1.4 billion remaining under its authorization at the end of the quarter. The company expects to make share repurchases of $500 million in fiscal 2023. The company also raised its quarterly dividend to 59 cents a share from 55 cents.
Outlook
Dollar General expects fiscal 2023 net sales growth in the band of roughly 5.5% to 6%, including an anticipated negative impact of about two percentage points due to the lapping of the 53rd week in fiscal 2022. The company now foresees same-store sales growth between 3% and 3.5%.
The company now expects earnings per share growth in the range of 4- 6% for the fiscal year 2023. The view includes estimated negative impacts of approximately three percentage points due to higher interest expense in fiscal 2023, and about four percentage points due to lapping the fiscal 2022 53rd week.
Shares of this Zacks Rank #4 (Sell) company have declined 11.1% in the past six months against the industry’s rise of 0.2%.
3 Stocks Looking Red Hot
Here we have highlighted three top-ranked stocks, namely Kroger (KR - Free Report) , Ollie's Bargain Outlet Holdings (OLLI - Free Report) and General Mills (GIS - Free Report) .
Kroger, which operates as a supermarket operator, currently carries a Zacks Rank #1 (Strong Buy). The expected EPS growth rate for three to five years is 6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Kroger’s current financial-year revenues and EPS suggests growth of 2.5% and 6.2%, respectively, from the year-ago reported figure. Kroger has a trailing four-quarter earnings surprise of 9.8%, on average.
Ollie's Bargain, the largest retailer of closeout merchandise and excess inventory, carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 12.1%.
The Zacks Consensus Estimate for Ollie's Bargain’s current financial-year revenues suggests growth of 3.8% from the year-ago reported figure.
General Mills, which manufactures and markets branded consumer foods, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 7.5%.
The Zacks Consensus Estimate for General Mills’ current financial year sales and earnings suggests growth of 5% and 6.1% from the year-ago period. GIS has a trailing four-quarter earnings surprise of 8.7%, on average.
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Dollar General (DG) Q4 Earnings Beat, Sales Increase Y/Y
Dollar General Corporation (DG - Free Report) came up with fourth-quarter fiscal 2022 results, wherein the top line missed the Zacks Consensus Estimate, while the bottom line beat the same. Markedly, both net sales and earnings grew year over year. This Goodlettsville, TN-based company witnessed same-store sales growth and gained market share in consumables and non-consumables categories.
Let’s Delve Deeper
The quarterly earnings came in at $2.96 per share, which beat the Zacks Consensus Estimate of $2.94 and increased 15.2% from the prior-year period.
Net sales of $10,202.9 million rose 17.9% from the prior-year period on sales contributions from new stores and growth in same-store sales, partly offset by the impact of store closures. The top line fell short of the Zacks Consensus Estimate of $10,236 million.
Dollar General’s same-store sales increased 5.7% year over year, driven by higher average transaction amount, partly offset by a modest decrease in customer traffic. Same-store sales reflected an increase in the Consumables category, offset by a decline in each of the Seasonal, Apparel and Home Products categories.
Dollar General Corporation Price, Consensus and EPS Surprise
Dollar General Corporation price-consensus-eps-surprise-chart | Dollar General Corporation Quote
Based on categories, sales increased 22.7% year over year to $8,054.1 million for Consumables. Sales rose 5.7% to $1,191.7 million for Seasonal and 3.1% to $658.4 million for Home Products. However, the same declined 7.3% to $298.7 million in the Apparel category.
Gross profit increased 16.6% to $3,148.3 million in the reported quarter, while the gross margin shrunk 35 basis points to 30.9%. The contraction in gross profit margin can be attributed to higher LIFO provision, a greater proportion of sales coming from the consumable category, which carries a lower margin, as well as increases in inventory shrink, damages and markdowns. These were partly offset by higher inventory markups and a reduction in transportation costs.
SG&A expenses, as a percentage of net sales, decreased 29 basis points to 21.7% in the quarter. Operating profit jumped 17.1% to $933.2 million.
Store Update
In fiscal 2022, Dollar General opened 1,039 new stores, remodeled 1,795 stores, and relocated 127 stores. The company now anticipates carrying out 3,170 real estate projects, including 1,050 new store openings, 2,000 remodels, and 120 store relocations, in fiscal 2023.
Other Financial Details
Dollar General ended the quarter with cash and cash equivalents of $381.6 million, long-term obligations of $7,009.4 million and shareholders’ equity of $5,541.8 million.
Management incurred capital expenditures of $1.6 billion during fiscal 2022. For fiscal 2023, the company anticipates capital expenditures in the band of $1.8-$1.9 billion.
During fiscal 2022, Dollar General repurchased 11.6 million shares for $2.7 billion. The company had $1.4 billion remaining under its authorization at the end of the quarter. The company expects to make share repurchases of $500 million in fiscal 2023. The company also raised its quarterly dividend to 59 cents a share from 55 cents.
Outlook
Dollar General expects fiscal 2023 net sales growth in the band of roughly 5.5% to 6%, including an anticipated negative impact of about two percentage points due to the lapping of the 53rd week in fiscal 2022. The company now foresees same-store sales growth between 3% and 3.5%.
The company now expects earnings per share growth in the range of 4- 6% for the fiscal year 2023. The view includes estimated negative impacts of approximately three percentage points due to higher interest expense in fiscal 2023, and about four percentage points due to lapping the fiscal 2022 53rd week.
Shares of this Zacks Rank #4 (Sell) company have declined 11.1% in the past six months against the industry’s rise of 0.2%.
3 Stocks Looking Red Hot
Here we have highlighted three top-ranked stocks, namely Kroger (KR - Free Report) , Ollie's Bargain Outlet Holdings (OLLI - Free Report) and General Mills (GIS - Free Report) .
Kroger, which operates as a supermarket operator, currently carries a Zacks Rank #1 (Strong Buy). The expected EPS growth rate for three to five years is 6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Kroger’s current financial-year revenues and EPS suggests growth of 2.5% and 6.2%, respectively, from the year-ago reported figure. Kroger has a trailing four-quarter earnings surprise of 9.8%, on average.
Ollie's Bargain, the largest retailer of closeout merchandise and excess inventory, carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 12.1%.
The Zacks Consensus Estimate for Ollie's Bargain’s current financial-year revenues suggests growth of 3.8% from the year-ago reported figure.
General Mills, which manufactures and markets branded consumer foods, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 7.5%.
The Zacks Consensus Estimate for General Mills’ current financial year sales and earnings suggests growth of 5% and 6.1% from the year-ago period. GIS has a trailing four-quarter earnings surprise of 8.7%, on average.