Goodlettsville, Tennessee — Despite the cautious spending habits of its core lower-income clientele, Dollar General managed to improve its revenues in the third quarter.
New stores contributed positively to net sales, which increased 5.0% to $10.2 billion for the quarter that ended on November 2. Store closures had an impact that largely offset growth in same-store sales.
The 1.3% increase in comps was close to the retailer’s highest forecast. Traffic was up 0.3% and average transactions were up 1.1%. Despite comp reductions in the home, seasonal, and fashion categories, Dollar General’s rise was driven by consumables.
“We have continued to improve our execution and the customer experience in our stores, and we believe that our Back to Basics efforts contributed to these results,” CEO Todd Vasos stated.
The net income, or $0.89 per diluted share, fell by about 29% to $196.5. The results showed that store inventory and property losses from Hurricanes Helene and Milton in the early fall were the main causes of the $32.7 million in hurricane-related expenses.
A comprehensive store plan for the upcoming year was revealed by Dollar General today. About 2,000 stores will be completely remodeled, 2,250 locations will be remodeled through Project Elevate for “mature” retailers, roughly 45 stores will be relocated, and roughly 575 new stores will be opened in the United States and up to 15 new stores in Mexico.
The business had 20,523 stores at the end of the quarter.
Citing the impact on profit from the promotional Q4 environment and hurricane recovery costs, Dollar General lowered the upper end of its fiscal year earnings prediction. The upper end of the EPS projection has been lowered to $5.90, while the lower end is still at $5.50. I used to be $6.20.
Additionally, the business reduced its top-line projection. Previously, it had projected FY net sales growth of roughly 4.7% to 5.3%, but now it anticipates growth of 4.8% to 5.1%. Comp growth was previously predicted to be between 1.0% and 1.6%, but it is now forecast to be between 1.1% and 1.4%.
