- Dollar General Corporation DG shares plummeted after reporting dull results in the first quarter of FY23, where earnings missed estimates.
- EPS decreased 2.9% to $2.34 and missed the analyst consensus of $2.38.
- The company reported sales growth of 6.8% year-on-year to $9.34 billion, missing the consensus of $9.46 billion.
- Same-store sales increased 1.6% versus last year, driven by an increase in average transaction amount, partially offset by a decrease in customer traffic.
- The gross profit margin for the quarter increased 34 basis points Y/Y to 31.6%. This gross profit rate increase was primarily attributable to higher inventory markups, decreased transportation costs, and a decreased LIFO provision.
- Operating profit in Q1 decreased 0.7% Y/Y to $740.9 million. The company reported a net income of $514.4 million in Q1, a decrease of 6.9% Y/Y.
- Dollar General exited the quarter with cash and equivalents worth $313.06 million.
- As of May 5, 2023, total merchandise inventories at cost were $7.3 billion, an increase of 14.7% on a per-store basis. This increase primarily reflects the impact of product cost inflation.
- "We executed more than 800 real estate projects, including new store openings in our larger footprint Dollar General formats, which continue to outperform our expectations, and drive higher sales productivity compared to our traditional stores," said Jeff Owen, Dollar General's chief executive officer.
- Dividend: The company declared a quarterly cash dividend of $0.59 per share, payable on or before July 25, 2023, to shareholders of record on July 11, 2023.
- Outlook: Dollar General cut its FY23 outlook. The company noted macroeconomic environment is more challenging than it had previously anticipated.
- The company sees EPS in the range of an approximate 8% decline to flat, compared to its previous expectation of growth of approximately 4%-6%.
- The company sees net sales growth in the range of approximately 3.5%-5.0%, compared to its previous expectation of 5.5%-6%.
- Same-store sales growth is expected in the range of approximately 1%-2%, compared to its previous expectation of 3%-3.5%.
- Price Action: DG shares are trading lower by 17% to $166.86 on the last check Thursday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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