Dollar General delivered sales and income growth in the third quarter as the retailer outlined plans to expand its store base in 2018.
For the third quarter ended November 3, Dollar General Corp. posted net income of $252.5 million, or 93 cents per diluted share, versus $235.3 million, or 84 cents per diluted share, in the 2016 period. The company fell a penny short of a MarketBeat-published diluted earnings per share analyst average estimate. The company reported a five-cent negative diluted earnings per share impact from expenses related to recent hurricanes that struck the U.S.
Comparable store sales gained 4.3%, attributable to increases in average transaction amount and customer traffic. Although it asserted that net income was hurt by hurricane related costs, the company maintained that it benefited by an estimated 30 to 35 basis points, from sales related to the storms. On a merchandise basis, consumables, seasonal and apparel categories drove comps, partially offset by negative results in the home products category.
Net sales advanced 11% to $5.9 billion in the quarter year over year. Operating profit was $417.4 million versus $393 million in the quarter a year before.
“During the quarter, we effectively balanced our same-store sales growth while achieving gross profit rate expansion and continuing our planned investments in the business,” said Todd Vasos, Dollar General CEO. “We remain excited about the future for Dollar General. For fiscal 2018, we have plans to execute approximately 2,000 real estate projects comprised of 900 new stores, 1,000 store remodels and 100 store relocations. We continue to believe that investing in the business through our high-return new store growth is the best use of our capital to help drive long-term shareholder value. Our new store growth is complemented with a significant increase in our store remodel program from fiscal 2017 that we view as an investment to enhance and consistently deliver on our brand promise to help our customers save time and money every day.”