We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Factors to Know Ahead of Dollar General's (DG) Q3 Earnings
Read MoreHide Full Article
Dollar General Corporation (DG - Free Report) is likely to register an increase in the top line when it reports third-quarter fiscal 2023 results on Dec 7 before the opening bell. The Zacks Consensus Estimate for revenues is pegged at $9.65 billion, indicating an improvement of 1.9% from the prior-year quarter’s level.
The bottom line of this discount retailer is expected to have decreased from the year-ago quarter’s reported figure. Over the past 30 days, the Zacks Consensus Estimate for third-quarter earnings per share has fallen 4% to $1.19. The consensus mark suggests a decline of 48.9% from the year-ago quarter.
Dollar General has a trailing four-quarter negative earnings surprise of 6%, on average. In the last reported quarter, this Goodlettsville, TN-based player missed the Zacks Consensus Estimate by 14.5%.
Key Factors to Note
Dollar General’s better pricing and private-label offerings are likely to have contributed to the to-be-reported quarter’s top line. The company’s operational capabilities, coupled with its real estate growth strategy, position it well to gain market share by targeting low-to-middle-income-group consumers. It has also been focusing on consumable and non-consumable categories to boost traffic. We also remain encouraged by the company’s host of initiatives, such as DG Fresh, Fast Track, digitization and private fleet.
However, challenges such as financial constraints among core customers and pressure on same-store sales persist. Consumers are adopting a more cautious stance toward their disposable income, signaling a return to more conservative spending habits. This shift in consumer sentiment is reverberating across merchandise categories. We expect third-quarter same-store sales to decline 2%.
Dollar General has been taking actions to accelerate the pace of inventory-reduction efforts through markdowns, primarily in non-consumable products, and additional investments in planned areas like retail labor to elevate the in-store experience. Overall, it anticipates an incremental operating profit headwind of up to $170 million in the second half of 2023.
We anticipate a 200-basis point deleverage in SG&A expenses, resulting in an operating margin contraction of 370 basis points. This is expected to be reflected in the bottom line.
Dollar General Corporation Price, Consensus and EPS Surprise
Our proven model does not conclusively predict an earnings beat for Dollar General this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.
Dollar General has a Zacks Rank #4 (Sell) and an Earnings ESP of -3.22%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this season:
Dollar Tree (DLTR - Free Report) currently has an Earnings ESP of +0.25% and a Zacks Rank #3. The company is likely to register a bottom-line increase when it reports fourth-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of $2.65 suggests an increase from $2.04 reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dollar Tree’s top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $8.67 billion, which indicates a rise of 12.4% from the figure reported in the prior-year quarter.
Costco (COST - Free Report) currently has an Earnings ESP of +0.72% and a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $3.44 suggests a rise of 11% from the year-ago reported number.
Costco’s top line is expected to ascend year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $57.62 billion, which calls for an increase of 5.8% from the prior-year quarter. COST has a trailing four-quarter earnings surprise of 2.1%, on average.
lululemon athletica (LULU - Free Report) currently has an Earnings ESP of +0.19% and a Zacks Rank of 3. The company is likely to register a bottom-line increase when it reports third-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of $2.27 suggests a rise from $2.00 reported in the year-ago quarter.
lululemon’s top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.19 billion, which indicates a rise of 17.8% from the figure reported in the prior-year quarter. lululemon has a trailing four-quarter earnings surprise of 6.8%, on average.
Image: Bigstock
Factors to Know Ahead of Dollar General's (DG) Q3 Earnings
Dollar General Corporation (DG - Free Report) is likely to register an increase in the top line when it reports third-quarter fiscal 2023 results on Dec 7 before the opening bell. The Zacks Consensus Estimate for revenues is pegged at $9.65 billion, indicating an improvement of 1.9% from the prior-year quarter’s level.
The bottom line of this discount retailer is expected to have decreased from the year-ago quarter’s reported figure. Over the past 30 days, the Zacks Consensus Estimate for third-quarter earnings per share has fallen 4% to $1.19. The consensus mark suggests a decline of 48.9% from the year-ago quarter.
Dollar General has a trailing four-quarter negative earnings surprise of 6%, on average. In the last reported quarter, this Goodlettsville, TN-based player missed the Zacks Consensus Estimate by 14.5%.
Key Factors to Note
Dollar General’s better pricing and private-label offerings are likely to have contributed to the to-be-reported quarter’s top line. The company’s operational capabilities, coupled with its real estate growth strategy, position it well to gain market share by targeting low-to-middle-income-group consumers. It has also been focusing on consumable and non-consumable categories to boost traffic. We also remain encouraged by the company’s host of initiatives, such as DG Fresh, Fast Track, digitization and private fleet.
However, challenges such as financial constraints among core customers and pressure on same-store sales persist. Consumers are adopting a more cautious stance toward their disposable income, signaling a return to more conservative spending habits. This shift in consumer sentiment is reverberating across merchandise categories. We expect third-quarter same-store sales to decline 2%.
Dollar General has been taking actions to accelerate the pace of inventory-reduction efforts through markdowns, primarily in non-consumable products, and additional investments in planned areas like retail labor to elevate the in-store experience. Overall, it anticipates an incremental operating profit headwind of up to $170 million in the second half of 2023.
We anticipate a 200-basis point deleverage in SG&A expenses, resulting in an operating margin contraction of 370 basis points. This is expected to be reflected in the bottom line.
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 does not conclusively predict an earnings beat for Dollar General this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.
Dollar General has a Zacks Rank #4 (Sell) and an Earnings ESP of -3.22%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this season:
Dollar Tree (DLTR - Free Report) currently has an Earnings ESP of +0.25% and a Zacks Rank #3. The company is likely to register a bottom-line increase when it reports fourth-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of $2.65 suggests an increase from $2.04 reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Dollar Tree’s top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $8.67 billion, which indicates a rise of 12.4% from the figure reported in the prior-year quarter.
Costco (COST - Free Report) currently has an Earnings ESP of +0.72% and a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports first-quarter fiscal 2024 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $3.44 suggests a rise of 11% from the year-ago reported number.
Costco’s top line is expected to ascend year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $57.62 billion, which calls for an increase of 5.8% from the prior-year quarter. COST has a trailing four-quarter earnings surprise of 2.1%, on average.
lululemon athletica (LULU - Free Report) currently has an Earnings ESP of +0.19% and a Zacks Rank of 3. The company is likely to register a bottom-line increase when it reports third-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for the quarterly earnings per share of $2.27 suggests a rise from $2.00 reported in the year-ago quarter.
lululemon’s top line is expected to increase year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.19 billion, which indicates a rise of 17.8% from the figure reported in the prior-year quarter. lululemon has a trailing four-quarter earnings surprise of 6.8%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.