Dollar General grows above expectations despite challenges

Dollar General
Dollar General now has more than 21000 stores (Source: Bigstock)

Discount retailer Dollar General has ended a fiscal quarter stricken by severe weather and high fuel costs with continued growth.

The 21,000-store company increased its quarterly net sales by 3.8 per cent to $10.8 billion. At the same time, its operating profits grew by 10.8 per cent to $638.5 million.

“Our topline results were highlighted by positive customer traffic and balanced category growth, while continued progress on our key initiatives drove another quarter of strong operating profit growth,” said Todd Vasos, Dollar General’s CEO.

Vasos added that the results “exceeded our expectations” as the profit margin expansion “more than offset” the impact of severe winter weather and higher fuel costs.

“Looking ahead, we believe the essential nature of our offering and our expansive footprint position us well to navigate the current macroeconomic environment,” he said. “Overall, we remain confident in our ability to deliver on the goals outlined in our long-term financial framework, while creating sustainable long-term shareholder value.”

Dollar General’s store count grew by 162 during the quarter, ending the period at 21,055 in total. Consumable products made up the bulk of overall sales, contributing $8.9 billion. Apparel products saw the fastest quarter-on-quarter sales growth, at 6.7 per cent.

Neil Saunders, MD of insights firm GlobalData, said the continued growth of Dollar General is “perfectly respectable”.

“This is especially so given the first quarter was disrupted by severe winter weather and came against a consumer backdrop that remains unfavorable for Dollar General’s core shoppers,” he added.

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