For its 13-week first quarter ended May 2, Dollar General Corp. posted net income of $222 million, or 72 cents per diluted share, versus $220 million, or 67 cents per diluted share, in the year-prior period. Comparable store sales advanced 1.5% due to increases in both customer traffic and average transaction amount, the company announced.
An average analyst estimate published by Thomson Reuters was for 73 cents per share.
Adjusted net income for the 2013 quarter was $232 million, or 71 cents per diluted share, based on the exclusion of specifically identified expenses including a loss of $18.9 million associated with restructuring the company’s credit facility, expenses totaling $1 million relating to secondary offerings and the related income tax effects of the adjustments, Dollar General noted.
Net sales increased 6.8% to $4.52 billion in the 2014 period, the retailer reported, versus the 2013 first quarter. Sales increases in consumables significantly outpaced those in company’s non-consumable categories, the company pointed out, led by increased sales of tobacco products, perishables and candy and snacks. On the negative side, Dollar General asserted that unfavorable weather conditions hurt sales in the period, as had a competitive retail environment and continued financial pressures on the company’s core customers.
Operating profit was $379.7 million versus $395 million in last year’s first quarter.
“Dollar General’s first quarter same-store sales improvement of 1.5% was driven by growth in our consumables business and, overall, reflected the challenges of unfavorable winter weather, heightened competition and the current economic environment,” Rick Dreiling, Dollar General’s chairman and CEO, said in announcing the financial results. “Even as these factors weighed on our sales results, we saw trends improve as we moved through the quarter and we delivered EPS of 72 cents, which was in line with our guidance.”
Dreiling added, “We continue to grow both our customer traffic and average transaction amount as our merchandising initiatives reinforce our affordability and value messaging. Sales trends began to improve in April and have continued to gain momentum. We are pleased to see that our merchandising strategies are gaining traction with a strengthening of sales in both consumables and non-consumables in our second quarter to date. Looking ahead, we are confirming our sales and EPS guidance for the year, and we are confident that we have the right strategies to drive long-term shareholder value.”