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Dollar General Advances Through Q4

For the fourth quarter ended February 3, Dollar General Corp. posted net income of $414.2 million, or $1.49 per diluted share, compared with net income of $376.2 million, or $1.30 per diluted share, in the period a year prior.

Earnings per diluted share beat a Zacks Investment Research analyst average estimate of $1.41.

Comparable store sales advanced 1% from the 2015 quarter primarily due to an increase in average transaction amount, partially offset by a slight decline in traffic that moderated from the second and third quarters, Dollar General pointed out. As for merchandise performance, comps got a boost from strong results in the consumables and home products categories partially offset by negative results in the seasonal and apparel categories, the company added.

Net sales increased 13.7% to $6.01 billion in the 2016 fourth quarter. Dollar General’s 2016 fiscal fourth quarter was 14 weeks long compared to 13 weeks in the year-before period, the company noted. Sales for the extra week were $398.7 million. Operating profit was $680.6 billion versus $612.4 million in the previous-year fourth quarter.

For the full fiscal year, Dollar General posted net income of $1.25 billion, or $4.43 per diluted share, compared with $1.17 billion, or $3.95 per diluted share, for the prior year.

Comps advanced 0.9% primarily due to an increase in average transaction amount, with traffic essentially flat versus the year previous, Dollar General indicated. Positive results in the consumables and home products categories buoyed comps partially offset by negative results in the apparel and seasonal categories.

Full year 2016 net sales increased 7.9% to $22 billion versus fiscal 2015. Operating profit was $2.06 billion versus $1.94 billion in the fiscal year previous.

Todd Vasos, Dollar General CEO, said the company “is well-positioned to serve our customers with value and convenience given our plans to open approximately 1,000 new stores in 2017. To strengthen our position for the long term, we are making significant investments, primarily in compensation and training for our store managers given the critical role this position plays in our customer experience, as well as strategic initiatives. While these investments are expected to put pressure on our 2017 earnings, we believe they will strengthen our market share position over time and are positive steps to further support sustainable growth for our shareholders over the long term.”