Dollar General Makes Gains In Tough Q4

In the fiscal 2013 fourth quarter ended January 31, Dollar General Corp. posted net income of $322 million, or diluted earnings per share of $1.01, versus $317 million, or 97 cents, in the year-ago period.  Net sales increased 6.8% to $4.49 billion, and comparable store sales advanced 1.3% versus last year’s four quarter.

Earnings per share matched a published Thomson Reuters average analyst estimate, although sales were shy of what observers expected.

Gains in both customer traffic and average transaction amount contributed to comp gains with sales of tobacco products and perishables being the major catalysts, Dollar General stated. Operating profit was $538.1 million versus $522.3 million in the year-earlier period

For the full year, Dollar General reported net income of $1.03 billion, or diluted EPS of $3.17, versus $953 million, or $2.85, for fiscal 2012. Adjusted net income advanced 6.5% to $1.04 billion, while adjusted EPS increased 10% to $3.20 compared with the year earlier.

Net sales increased in fiscal 2013 by 9.2% to $17.5 billion while comps advanced 3.3%, driven by gains in customer traffic and average transaction amount.

Operating profit was $1.74 billion compared with $1.66 billion in fiscal 2013, Dollar General maintained.

“I am pleased to report Dollar General’s twenty-fourth consecutive year of same-store sales growth in 2013,” Rick Dreiling, the company’s chairman and CEO, said in announcing financial results. “Among our other many accomplishments for the year, we successfully opened 650 new stores, ending the year with 11,132 stores serving customers in 40 states. We made great progress in managing our investment in inventories in 2013, and importantly, we generated significant cash flow from operations and returned $620 million to shareholders through share repurchases. Sales in the fourth quarter were impacted by severe winter weather, including many days with significant store closures, an aggressive competitive retail landscape and our customers’ uncertainty about spending in the current economic environment. In spite of these headwinds, both customer traffic and average ticket increased in our same-stores in the fourth quarter. In addition, we controlled our expenses well and successfully managed the business to deliver a gross margin rate that was better than we anticipated. Although some of the severe weather impact has continued into the first quarter, we are pleased with our sales performance on days when weather is more normalized.”