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Dollar General Continues to Expand, Throws Open 15000th Store

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Dollar General Corporation (DG - Free Report) recently announced the opening of its 15000th store in Wilmington, NC. Notably, this discount retailer has grown as a reliable partner for many communities across 44 states, which includes 800 stores in North Carolina.

To celebrate this milestone, this Zacks Rank #3 (Hold) company offered the first 500 adult customers $10 gift cards and tote bags, which contain complimentary products.

The company’s focus on store expansion to drive customer count is commendable. In 2017, Dollar General completed the buyout of 285 Acquired Stores. Dollar General is also accelerating the pace of store openings. In the first quarter of fiscal 2018, Dollar General opened 241 new stores, remodeled 322 stores and relocated 31 stores.

 

Further, the company expects to open 900 stores, remodel 1,000 stores and relocate approximately 100 stores in fiscal 2018. Of the planned remodels, roughly 400 locations are likely to be upgraded to Dollar General Traditional Plus format with a higher cooler count. This is likely to lift comparable sales by 10-15%. 

Notably, in fiscal 2015, 2016 and 2017 the company opened 730, 900 and 1,315 new stores (includes acquisition of 300 stores) and relocated or remodeled 881, 906 and 764 stores, respectively.

Moreover, Dollar General is focusing on smaller format stores as these require less capital expenditure and will help to cope with space constraint. Response from the company's DG 16 store format is encouraging.

The company’s compelling store growth story at convenient locations and focus on consumable products lend it an edge over competitors. Dollar General’s commitment toward better pricing, private label offering, effective inventory management, and merchandise and operational initiatives should drive sales and margins. Aligned with these, management anticipates net sales for fiscal 2018 growth of 9% year over year. Further, earnings for the fiscal are envisioned in the band of $5.95-$6.15 per share, up from $4.49 in fiscal 2017.

Consequently, shares of Dollar General have risen 1.6%, outpacing the industry's increase of 1% in a month.

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Shoe Carnival (SCVL - Free Report) delivered an average positive earnings surprise of 21.3% in the last four quarters. This Zacks Rank #1 company has a long-term earnings growth rate of 12%.

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