Dollar General last week reported an upbeat guidance for the next fiscal year even as it warned of a challenging first quarter.
The discount retailer also reaffirmed its plans to execute 2,980 real estate projects in 2022, which include 1,110 new stores (up from 1,050 last year) along with 1,750 remodels and 120 store relocations. The company is also planning to open its first international stores, with 10 locations in Mexico.
Dollar General said that it expects same-store sales to fall 1 per cent to 2 per cent in its first quarter, with earnings per share of $2.25 to $2.35, below the $2.75 analysts were looking for. The company said it anticipated a challenging first quarter “due to elevated cost pressures, ongoing supply chain disruptions, and the prior year sales and gross margin comparison.” However, it gave upbeat guidance for the full fiscal year, with sales and earnings that exceeded analysts’ estimates.
The retailer posted net income of $597.4M, or $2.57 per share, for the quarter ended 28 January, down from $642.7M, or $2.62 per share, last year. Sales rose 2.8 per cent to $8.651bn from $8.415bn last year. The rise in sales came from contributions from new stores, which was partially offset by a decline in same-store sales amid lower customer traffic, Dollar General said.
Same-store sales fell 1.4 per cent but increased 11.3 per cent on a two-year stack basis. Same-store sales in the fourth quarter of 2021 declined in the apparel, consumables, seasonal and home products categories.
