As Dollar General completes the purchase of 322 additional store locations from Dollar Express, the retailer beat Wall Street profit and sales estimates in the first quarter.
For the first quarter ended May 5, Dollar General Corp. posted net income of $279 million or $1.02 per diluted share, versus $295 million, or $1.03 per diluted share, in the year-earlier period. Dollar General noted that 2016 first quarter financial results included a charge of one cent per diluted share related to the early retirement of long-term obligations. The company topped an analyst average estimate of $1.03 published by MarketBeat.
Net sales in the quarter increased 6.5% year over year to $5.61 billion. Comparable store sales gained 0.7% versus the first quarter in the fiscal year prior primarily due to an increase in average transaction amount, partially offset by a decline in traffic. The consumables and apparel categories boosted comp sales, partially offset by negative results in the home and seasonal segments.
“For the first quarter of 2017, I am pleased with our earnings results which reflect solid management of the business in a difficult retail environment as we overcame our most challenging comparisons from the prior year,” said Todd Vasos, Dollar General CEO. “Our same-store sales improved as we moved past the delay in income tax refunds and the timing shift of the later Easter holiday. We continue to execute on our focused strategy and implement our operating initiatives which we believe will improve customer traffic and transactions.”
In April, the Federal Trade Commission approved the company’s proposed purchase of 322 store locations in 36 states from Sycamore Partners. The Dollar Express stores were formerly owned by Family Dollar. The transaction is expected to close this June. The store sites are anticipated to be converted to the Dollar General banner by the end of November.