Dollar General reports Q1 results
Dollar General today reported financial results for its fiscal year 2024 first quarter (13 weeks) ended May 3, 2024.
“We are pleased with our start to 2024, including top and bottom-line results that exceeded our expectations in the first quarter,” said Todd Vasos, CEO of Dollar General. “These results were driven by strong customer traffic growth and market share gains during the quarter, which we believe is a testament to the relevance of our unique combination of value and convenience, as well as to improved execution across our organization.”
Vasos continued, “I want to thank our entire team for their dedication to fulfilling our mission of Serving Others every day. Because of their efforts, we continue to make progress executing on our Back to Basics strategy, which we believe is resonating positively with our customers in the store. Looking ahead, we continue to focus on actions designed to enhance the way we support our teams and serve our customers, while creating sustainable long-term value for our shareholders.”
[Read more: Dollar General recognized for workplace wellness]
Dollar General’s net sales increased 6.1% to $9.9 billion in the first quarter of 2024 compared to $9.3 billion in the prior year period. The net sales increase was primarily driven by positive sales contributions from new stores and growth in same-store sales. The increase was partially offset by the impact of store closures, the company said.
The retailer's same-store sales increased 2.4% compared to the first quarter of 2023 driven by an increase in customer traffic. The increase was partially offset by a decrease in average transaction amount. Same-store sales in the first quarter of 2024 included growth in the consumables category, partially offset by declines in each of the home products, seasonal, and apparel categories, the company said.
Dollar General's gross profit as a percentage of net sales was 30.2% in the first quarter of 2024 compared to 31.6% in the first quarter of 2023, a decrease of 145 basis points. This gross profit rate decrease was primarily attributable to increased shrink and inventory markdowns, a greater proportion of sales coming from the consumables category and lower inventory markups. These factors were partially offset by a lower LIFO provision, the retailer noted.
Dollar General's operating profit for the first quarter of 2024 decreased 26.3% to $546.1 million compared to $740.9 million in the first quarter of 2023.
Dollar General’s net income was $363.3 million for the first quarter of 2024, a decrease of 29.4% compared to $514.4 million in the prior year period. Diluted EPS decreased 29.5% to $1.65 for the first quarter of 2024 compared to diluted EPS of $2.34 in the first quarter of 2023.
For the 52-week fiscal year ending Jan. 31, 2025 (“fiscal year 2024”), Dollar General company continues to expect the following:
- Net sales growth in the range of approximately 6% to 6.7%.
- Same-store sales growth in the range of 2% to 2.7%.
- Diluted EPS in the range of approximately $6.80 to $7.55.
- The company currently anticipates an estimated negative impact to EPS of approximately 50 cents due to higher incentive compensation expense.
- Diluted EPS guidance assumes an effective tax rate in the range of approximately 22.5% to 23.5%.
[Read more: Dollar General taps Lee DeVille as senior VP, store operations]
“While it is still early in our fiscal year, we are encouraged by our first quarter financial results,” said Kelly Dilts, Dollar General’s chief financial officer. “Although we are experiencing shrink and sales mix headwinds that are greater than we had initially anticipated coming into the year, we are working to mitigate the impact of these challenges and are reiterating our full-year financial guidance as we remain focused on our goal of delivering consistent, strong financial performance.”
For the 13-week quarter ending Aug. 2, 2024, the company currently expects same-store sales growth in the low 2% range, and diluted EPS in the range of $1.70 to $1.85.