Dollar General reported strong sales in its fourth quarter but noted that same-store sales are down in recent weeks as the nation’s economy starts to slowly re-open from the pandemic.
The discounter also reiterated plans to open 1,050 stores in 2021 along with remodeling 1,750 locations. It will also relocate 100 stores.
“We believe the fundamentals of the business are strong, and we are confident in the team’s ability to execute on our robust plans for 2021,” said Dollar General CFO John Garratt.
Dollar General’s net income rose 24.75% $642.7 million, or $2.62 per share, in the quarter ended Jan. 29, up from $535.4 million, or $2.10 per share, last year. Analysts had expected earnings per share of $2.72.
Net sales increased 17.6% to $8.30 billion. Same-store sales rose a better-than-expected 12.7%, driven by an increase in average transaction amount, partially offset by a decline in customer traffic. Same-store sales increased in each of the consumables, seasonal, home products and apparel categories, with the largest increase in home products. The retailer cited consumer behavior driven by COVID-19 as having a significant positive effect on net sales and same-store sales during the quarter (and the full year).
Dollar General said same-store sales from February 27 to March 16 were down 16% from the same period last year.
For the full year, net sales increased 21.6% to $33.7 billion. Net income increased 55% to $2.7 billion.
“Our full-year results were highlighted by significant growth on both the top and bottom lines, including a net sales increase of 28.1% in our non-consumables business,” said Todd Vasos, CEO.
Vasos added that the chain completed 2,780 real estate projects last year, including the opening of its 17,000th location and launch of its new, more upscale store concept, PopShelf, while delivering its 31stconsecutive year of same-store sales growth.
“We continue to operate from a position of strength, and are excited about our plans for 2021 to continue delivering value and convenience for our customers, along with long-term sustainable growth and value for our shareholders,” he said.
Dollar General said it remain cautious in its 2021 sales outlook “given the significant uncertainty that still exists.” Its guidance calls 2021 net sales in the range of flat to a 2% decline, a same-store sales decline of 4% to 6% and EPS in the range of $8.80 to $9.50.
The company also hiked its quarterly dividend by 17% and set a new $2 billion stock buyback program.
This story originally appeared on Chain Store Age.