Dollar General saw its net sales and earnings jump in the third quarter as it continued to ramp up its store growth plans into 2019.
Net sales increased 8.7% to $6.4 billion in the third quarter of 2018 ending November 2 compared to $5.9 billion in the third quarter of 2017. The increase was positively affected by sales contributions from new stores and growth in same-store sales, modestly offset by the impact of store closures.
Same-store sales increased 2.8% from the third quarter of 2017, driven by an increase in average transaction amount and positive results in the consumables, seasonal and home categories, partially offset by sales declines in the apparel category. Customer traffic was essentially flat.
The company reported net income of $334 million for the third quarter of 2018 compared to $253 million in the third quarter of 2017. Diluted earnings per share grew 35.5% to $1.26 in the third quarter of 2018 compared to diluted EPS of $0.93 in the third quarter of 2017. Diluted EPS for the third quarter of 2018 included an estimated $0.05 net negative impact from hurricane-related expenses.
“During the third quarter, we delivered strong operating performance and financial results,” said Todd Vasos, Dollar General’s CEO. “I am particularly proud of our team’s dedication to our mission of serving others, which was on display this quarter as employees across our organization rallied to help our communities in need during the aftermath of two devastating hurricanes. Despite the challenges created by these weather events in the quarter, we achieved strong top-line growth and remained focused on expense control. Both consumables and non-consumables categories drove our financial performance this quarter, and we achieved our highest two-year same-store-sales stack in eleven quarters.”
For fiscal year 2018, the company expects net sales growth to be approximately 9%, compared to the previous range of 9% to 9.3%; and expects same-store sales growth to be in the middle of the previous range of mid-to-high 2%.
The company is also reiterating its store growth plans in the fiscal year, including 900 new store openings, 1,000 mature store remodels, and 100 store relocations. For its fiscal year 2019 store growth outlook, the company is planning 975 new store openings, 1,000 mature store remodels, and 100 store relocations.