Dollar General Corporation reported that net income and net sales increased for its second quarter, giving the company new fuel in its bid for Family Dollar, which had previously turned down Dollar General’s acquisition offer.
Dollar General’s net income for the quarter was $251 million, a 2.4% increase over the same period in 2013’s second quarter, which yielded a net income of $245 million. Adjusted net income, as defined under “Non-GAAP Disclosure” below, was $251 million, or $0.77 per diluted share, in the 2013 second quarter.
Net sales increased 7.5% to $4.72 billion in the 2014’s Q2, compared with $4.39 billion in the 2013 second quarter. Same-store sales increased 2.1%, with increases in both customer traffic and average transaction value, the company said. The remainder of the sales increase was attributable to new stores, partially offset by sales from closed stores.
Consumables sales continued to increase at a higher rate than non-consumables, with the most significant growth related to tobacco products, perishables and candy and snacks, according to Dollar General.
“Dollar General’s second quarter sales trends improved over the first quarter as we grew both customer traffic and average ticket for the 26th consecutive quarter,” said Rick Dreiling, Dollar General’s chairman and CEO. “Our second quarter same-store sales began very strong with a year over year increase in May of more than 3.5%; however, this growth moderated as we moved through June and July given the competitive environment and a consumer who, although resilient in the face of economic uncertainty, remains cautious with her spending.”
“As we enter the third quarter, we are seeing our sales momentum pick back up and expect that momentum to build as our initiatives gain traction with our customers, Dreiling continued. “For the second half of the year, we are well positioned to serve our customers and provide them with the everyday low pricing they count on from us. We remain focused on driving our sales and profitability as we continue to forecast fiscal 2014 adjusted diluted EPS of $3.45 to $3.55 for the full year.”
Earlier this month, Dollar General entered a proposal to acquire Family Dollar. Dollar General valued the transaction at $9.7 billion, enough, it asserted, to outbid Family Dollar’s other suitor, Dollar Tree. Family Dollar, however, declined the Dollar General offer and said it plans to move forward with Dollar Tree.
“In regards to our proposal to acquire Family Dollar, we remain firmly committed to the acquisition, Dreiling commented when releasing the company’s financial information. “The financial benefits of our offer to Family Dollar shareholders are indisputable, and the proposed combination would unlock tremendous value for Dollar General shareholders. We continue to believe the potential antitrust issues are manageable and that our transaction as proposed is both superior and achievable.”