VOL. 126 | NO. 237 | Tuesday, December 6, 2011
Dollar General 3Q Profit Up on Strong Nov. Sales
GOODLETTSVILLE, Tenn. (AP) – Dollar General Corp.'s fiscal third-quarter profit rose 34 percent, helped by strong November sales as customers continued to seek out bargains heading into the holiday season.
The results beat Wall Street expectations and the discounter boosted its full-year earnings guidance on Monday. Its stock rose 81 cents, or 2 percent, to $40.75 in premarket trading.
"For the holiday season and into 2012, we expect our customers to remain very interested in value and in ways to make their dollars go further," Chairman and CEO Rick Dreiling said in a statement.
Dollar General reported net income of $171.2 million, or 50 cents per share, for the period ended Oct. 28. That's up from $128.1 million, or 37 cents per share, in the prior-year period.
The latest results beat the 47 cents per share that analysts polled by FactSet expected.
Revenue increased 12 percent to $3.6 billion from $3.22 billion, topping Wall Street's $3.57 billion estimate.
Revenue at stores open at least a year climbed 6.3 percent as customer traffic improved and the average transaction amount rose. This metric is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.
Dollar General said it had strong sales of candy and snacks, perishables, packaged foods, health care and pet supplies. Clothing sales dropped partly because of the ongoing pullback in consumers' discretionary spending.
Dollar General now expects 2011 adjusted earnings in a range of $2.29 to $2.32 per share. Its previous forecast called for adjusted earnings between $2.20 and $2.30 per share.
The discounter also raised its same-store revenue outlook. Dollar General now expects the figure to climb by about 5.6 percent to 5.8 percent, compared with a prior guidance for a 3 percent to 5 percent increase.
It anticipates revenue will rise about 13 percent, which implies revenue of $14.73 billion.
Analysts predict full-year earnings of $2.29 per share on revenue of $14.71 billion.
Dollar General, which is based in Goodlettsville, Tenn., was taken public by private equity firm KKR & Co. LP in 2009. The company also announced Monday that it will buy back up to $500 million shares of its common stock.
Dollar General had 9,813 stores in 38 states as of Oct. 28.
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