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Dollar General (DG) Q1 Earnings Miss, Sales Increase Y/Y
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Dollar General Corporation (DG - Free Report) came up with first-quarter fiscal 2023 results, wherein both the top and bottom lines missed the Zacks Consensus Estimate. Net sales grew year over year while earnings declined. This Goodlettsville, TN-based company witnessed same-store sales growth and gained market share in consumables.
Let’s Delve Deeper
The quarterly earnings came in at $2.34 per share, which missed the Zacks Consensus Estimate of $2.38 and decreased 2.9% from the prior-year period.
Net sales of $9,342.8 million rose 6.8% 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 $9,469 million.
Dollar General’s same-store sales increased 1.6% year over year, driven by a higher average transaction amount, partly offset by a decline in customer traffic. Same-store sales reflected an increase in the Consumables category, offset by declines in the Seasonal, Apparel and Home Products categories.
Sales increased 8.9% year over year to $7,582.9 million for Consumables and 0.1% to $962.7 million for Seasonal. However, sales declined 1.6% to $531.2 million for Home Products and 8.1% to $266.1 million for the Apparel category.
Gross profit increased 7.9% to $2,955.5 million in the reported quarter and the gross margin increased 30 basis points to 31.6%. The expansion in gross profit margin can be attributed to higher inventory markups, a reduction in transportation costs and a reduced LIFO provision. These were partly offset by increased shrinkage, markdowns, inventory damages and a higher proportion of sales from the consumables category.
SG&A expenses, as a percentage of net sales, increased 90 basis points to 23.7% in the quarter. Operating profit declined 0.7% to $740.9 million.
Dollar General Corporation Price, Consensus and EPS Surprise
In the first quarter of fiscal 2023, Dollar General opened 212 new stores, remodeled 582 stores and relocated 22 stores. In fiscal 2023, the company anticipates carrying out 3,110 real estate projects in the United States, including 990 new store openings, 2,000 remodels and 120 store relocations.
Other Financial Details
Dollar General ended the quarter with cash and cash equivalents of $313.1 million, long-term obligations of $7,028.8 million and shareholders’ equity of $5,935.3 million.
Management incurred capital expenditures of $363 million during the fiscal first quarter. For fiscal 2023, the company anticipates capital expenditures in the band of $1.6-$1.7 billion, compared with its earlier projection of $1.8-$1.9 billion.
During the first quarter of fiscal 2023, Dollar General did not repurchase shares. The company had $1.4 billion remaining under its authorization at the end of the quarter. The company currently predicts no share repurchases for fiscal 2023 versus a share repurchase of $500 million expected earlier. During first-quarter fiscal 2023, Dollar General paid a quarterly dividend of 59 cents per share and paid a total of $129.4 million in dividends.
Outlook
Dollar General expects fiscal 2023 net sales growth in the band of roughly 3.5% to 5%, lower than 5.5% to 6% predicted earlier. Both projections included 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 in the range of 1%-2% compared with its previous estimate of 3%-3.5%.
For fiscal year 2023, the company now expects earnings per share to be flat to down about 8% compared with growth of 4%-6% predicted earlier. The view includes estimated negative impacts of approximately four percentage points due to higher interest expenses in fiscal 2023 and four percentage points due to lapping the fiscal 2022 53rd week.
Shares of this Zacks Rank #3 (Hold) company have declined 7% in the past three months compared with the industry’s decline of 3.3%.
Tecnoglass manufactures and sells architectural glass and aluminum products for the residential and commercial construction industries. TGLS currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Tecnoglass’ current financial-year sales and earnings per share suggests growth of 18.1% and 23.8%, respectively, from the corresponding year-ago reported figures. TGLS has a trailing four-quarter earnings surprise of 22.7%, on average.
Skechers, a worldwide producer and distributor of footwear for men, women and children, currently carries a Zacks Rank #1.
The Zacks Consensus Estimate for Skechers’ current financial-year sales suggests growth of 7.8%, while earnings per share are expected to rise by 31.9% from the corresponding year-ago reported figures. SKX has a trailing four-quarter earnings surprise of 18.8%, on average.
Kroger operates in the thin-margin grocery industry. It currently carries a Zacks Rank #2 (Buy). KR has a trailing four-quarter earnings surprise of 9.8%, on average.
The Zacks Consensus Estimate for Kroger’s current financial year sales and earnings suggests growth of 2.5% and 6.6%, respectively, from the prior-year reported numbers.
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Dollar General (DG) Q1 Earnings Miss, Sales Increase Y/Y
Dollar General Corporation (DG - Free Report) came up with first-quarter fiscal 2023 results, wherein both the top and bottom lines missed the Zacks Consensus Estimate. Net sales grew year over year while earnings declined. This Goodlettsville, TN-based company witnessed same-store sales growth and gained market share in consumables.
Let’s Delve Deeper
The quarterly earnings came in at $2.34 per share, which missed the Zacks Consensus Estimate of $2.38 and decreased 2.9% from the prior-year period.
Net sales of $9,342.8 million rose 6.8% 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 $9,469 million.
Dollar General’s same-store sales increased 1.6% year over year, driven by a higher average transaction amount, partly offset by a decline in customer traffic. Same-store sales reflected an increase in the Consumables category, offset by declines in the Seasonal, Apparel and Home Products categories.
Sales increased 8.9% year over year to $7,582.9 million for Consumables and 0.1% to $962.7 million for Seasonal. However, sales declined 1.6% to $531.2 million for Home Products and 8.1% to $266.1 million for the Apparel category.
Gross profit increased 7.9% to $2,955.5 million in the reported quarter and the gross margin increased 30 basis points to 31.6%. The expansion in gross profit margin can be attributed to higher inventory markups, a reduction in transportation costs and a reduced LIFO provision. These were partly offset by increased shrinkage, markdowns, inventory damages and a higher proportion of sales from the consumables category.
SG&A expenses, as a percentage of net sales, increased 90 basis points to 23.7% in the quarter. Operating profit declined 0.7% to $740.9 million.
Dollar General Corporation Price, Consensus and EPS Surprise
Dollar General Corporation price-consensus-eps-surprise-chart | Dollar General Corporation Quote
Store Update
In the first quarter of fiscal 2023, Dollar General opened 212 new stores, remodeled 582 stores and relocated 22 stores. In fiscal 2023, the company anticipates carrying out 3,110 real estate projects in the United States, including 990 new store openings, 2,000 remodels and 120 store relocations.
Other Financial Details
Dollar General ended the quarter with cash and cash equivalents of $313.1 million, long-term obligations of $7,028.8 million and shareholders’ equity of $5,935.3 million.
Management incurred capital expenditures of $363 million during the fiscal first quarter. For fiscal 2023, the company anticipates capital expenditures in the band of $1.6-$1.7 billion, compared with its earlier projection of $1.8-$1.9 billion.
During the first quarter of fiscal 2023, Dollar General did not repurchase shares. The company had $1.4 billion remaining under its authorization at the end of the quarter. The company currently predicts no share repurchases for fiscal 2023 versus a share repurchase of $500 million expected earlier. During first-quarter fiscal 2023, Dollar General paid a quarterly dividend of 59 cents per share and paid a total of $129.4 million in dividends.
Outlook
Dollar General expects fiscal 2023 net sales growth in the band of roughly 3.5% to 5%, lower than 5.5% to 6% predicted earlier. Both projections included 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 in the range of 1%-2% compared with its previous estimate of 3%-3.5%.
For fiscal year 2023, the company now expects earnings per share to be flat to down about 8% compared with growth of 4%-6% predicted earlier. The view includes estimated negative impacts of approximately four percentage points due to higher interest expenses in fiscal 2023 and four percentage points due to lapping the fiscal 2022 53rd week.
Shares of this Zacks Rank #3 (Hold) company have declined 7% in the past three months compared with the industry’s decline of 3.3%.
3 Red-Hot Stocks
Some better-ranked stocks are Tecnoglass (TGLS - Free Report) , Skechers U.S.A., Inc. (SKX - Free Report) and The Kroger Co. (KR - Free Report) .
Tecnoglass manufactures and sells architectural glass and aluminum products for the residential and commercial construction industries. TGLS currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Tecnoglass’ current financial-year sales and earnings per share suggests growth of 18.1% and 23.8%, respectively, from the corresponding year-ago reported figures. TGLS has a trailing four-quarter earnings surprise of 22.7%, on average.
Skechers, a worldwide producer and distributor of footwear for men, women and children, currently carries a Zacks Rank #1.
The Zacks Consensus Estimate for Skechers’ current financial-year sales suggests growth of 7.8%, while earnings per share are expected to rise by 31.9% from the corresponding year-ago reported figures. SKX has a trailing four-quarter earnings surprise of 18.8%, on average.
Kroger operates in the thin-margin grocery industry. It currently carries a Zacks Rank #2 (Buy). KR has a trailing four-quarter earnings surprise of 9.8%, on average.
The Zacks Consensus Estimate for Kroger’s current financial year sales and earnings suggests growth of 2.5% and 6.6%, respectively, from the prior-year reported numbers.