2024

Billion

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<p class="has-drop-cap">Dollar General Corporation (NYSE: DG) has reported its financial results for the <a href="https://investor.dollargeneral.com/websites/dollargeneral/English/2120/us-press-release.html?airportNewsID=ae62e248-c8d7-420c-8196-ae3e9e78aac0" target="_blank" aria-label="first quarter of fiscal year (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link">first quarter of fiscal year</a> 2024, which ended on May 3, 2024. <br><br>The company achieved net sales of $9.9 billion, reflecting a 6.1% increase compared to last year. This growth was driven by favorable sales contributions from new stores and a 2.4% increase in same-store sales, although partially offset by store closures.</p>
<p>Despite the increase in customer traffic, the average transaction amount slightly declined. The consumables category experienced growth, while home products, seasonal, and apparel categories declined.<br><br>Gross profit as a percentage of net sales decreased to 30.2% from 31.6% in the first quarter of 2023, reducing 145 basis points. This decline was primarily due to increased shrinkage and inventory markdowns, a greater proportion of sales coming from the consumables category, and lower inventory markups.</p>
<p>Selling, general and administrative expenses (SG&amp;A) also rose to 24.7% of net sales from 23.7% in the previous year, driven by higher retail labor, depreciation, incentive compensation, and maintenance costs. Consequently, operating profit decreased by 26.3% to $546.1 million.</p>
<h3 id="dollar-general-outperforms-eps-and-revenue-expectations-in-q1">Dollar General Outperforms EPS and Revenue Expectations in Q1</h3>
<p>Comparing the current performance against expectations, Dollar General exceeded its revenue forecast and earnings per share (<a href="https://tokenist.com/investing/how-to-value-a-stock/" rel="noopener noreferrer nofollow" class="deco-link">EPS</a>) expectations. The company reported a diluted EPS of $1.65, higher than the expected $1.58. <br><br>However, net sales of $9.9 billion were in line with the anticipated $9.89 billion. This indicates strong top-line performance, albeit with pressure on profitability. The decrease in operating profit and net income, down 26.3% and 29.4%, respectively, underscores Dollar General’s challenges in managing costs and maintaining margins. <br><br>The company’s net income for the quarter was $363.3 million, compared to $514.4 million in the first quarter of 2023. Despite the decrease in net income, Dollar General saw a significant increase in cash flows from operations, which rose by 247.3% to $663.8 million.</p>
<p>Despite profitability challenges, this robust cash flow performance underscores the company’s ability to generate cash. The effective income tax rate for the quarter was 23.3%, up from 21.8% in the previous year, impacting net income further.</p>
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<h3 id="dollar-general-expects-net-sales-growth-between-6-and-7-for-fiscal-2024">Dollar General Expects Net Sales Growth Between 6% and 7% for Fiscal 2024</h3>
<p>Dollar General has provided financial guidance for the second quarter and reiterated its full-year guidance for fiscal 2024. For the second quarter ending August 2, 2024, the company expects same-store sales growth in the low 2% range and diluted EPS between $1.70 and $1.85. For the full fiscal year ending January 31, 2025, Dollar General continues to project net sales growth between 6.0% and 6.7%, same-store sales growth between 2.0% and 2.7%, and diluted EPS in the range of $6.80 to $7.55.</p>
<p>The guidance also anticipates a negative impact of approximately $0.50 to EPS due to higher incentive compensation expenses. Capital expenditures for the year are expected to be between $1.3 billion and $1.4 billion, reflecting investments in strategic initiatives. The company plans to execute 2,435 real estate projects, including 730 new store openings, 1,620 remodels, and 85 store relocations. This is an increase from the previously expected 2,385 real estate projects.</p>
<p>Despite the headwinds related to shrink and sales mix, Dollar General remains focused on mitigating these challenges and delivering consistent financial performance.</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe>
<p><em>Disclaimer: The author does not hold or have a position in any securities discussed in the article.</em></p>
<h3 id="br"><br></h3>
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/dollar-general-achieves-9-9-billion-in-q1-net-sales-beating-forecasts/">Dollar General Achieves $9.9 Billion in Q1 Net Sales, Beating Forecasts</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Dollar General Achieves $9.9 Billion in Q1 Net Sales, Beating Forecasts

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