Dollar General's Q4 Bottom-Line Matches Street View; Issues Solid FY22 Forecast

Dollar General Corp DG reported fourth-quarter FY21 sales growth of 2.8% year-on-year, to $8.65 billion, marginally missing the consensus of $8.70 billion.
Same-store sales decreased 1.4% versus last year. Same-store sales increased 11.3% on a two-year stack basis.
The net sales increase was primarily driven by positive sales contributions from new stores, partially offset by the decline in same-store sales and the impact of store closures.
The gross profit margin for the quarter decreased 131 basis points Y/Y to 31.2%. The operating margin was 9.2%, and operating income for the quarter fell 8.7% to $796.7 million.
The company held $344.8 million in cash and equivalents as of January 28, 2022. Net cash provided by operating activities for the twelve months totaled $2.9 billion.
EPS of $2.57 was in line with the consensus.
The board approved a 31% hike in dividend to $0.55 per share, payable on or before April 19, 2022, to shareholders of record on April 5, 2022.
Outlook: Dollar General sees FY22 sales growth of about 10% and EPS growth of 12% - 14%. It sees a same-store sale increase of 2.5%.
The company expects a Q1 EPS of $2.25 - $2.35 versus the consensus of $2.73 and a same-store sales decline of 2% - 1%.
Price Action: DG shares are trading higher by 2.12% at $217.00 in premarket on the last check Thursday.

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