Dollar General gives disappointing preliminary Q4 results; cuts outlook
Dollar General Corp.’s December sales took a bit hit from the effects of a winter storm.
In preliminary financial results for its fourth quarter and fiscal year (ended February 3, 2023), the discounter said that, despite continued market share gains in sales of both consumable and non-consumable products, it now expects same-store sales to rise 5.7% from the year-ago period, below previous expectations of 6% to 7% growth.
Earnings are now expected to be in the range of $2.91 to $2.96, per share, below its previous guidance range of $3.15 to $3.30.
“The company believes the lower-than-expected results are primarily attributable to lower-than-anticipated sales and higher-than-anticipated inventory damages, both of which were negatively impacted, to varying degrees, by Winter Storm Elliott during the fourth quarter,” Dollar General stated.
While both November and January same-store sales results were within the company’s expected guidance range for the fourth quarter at 6.7% and 6.5%, respectively, December’s same-store sales results were lower than anticipated at 4.5%, believed to be primarily as a result of the storm.
For the full year, same-store sales increased 4.3%, compared to the company’s previous expectation of being toward the upper end of a range of 4.0% to 4.5%. Earnings per share growth is expected to be in the range of approximately 4.5% to 5.0%, compared to its previous expectations of approximately 7% to 8%.
In January, Dollar General celebrated the opening of its 19,000th store, in Joplin, Mo.
For the year ending ending February 2, 2024, Dollar General expects same-store sales growth in the range of 3.0% to 3.5% for the. Earnings per share growth is projected to be in the range of approximately 4% to 6%, including anticipated negative impacts of the following:
•Approximately three percentage points due to higher interest expense in fiscal 2023; and
•Approximately four percentage points due to lapping the fiscal 2022 53rd week.
Dollar General will provide full financial results for the fourth quarter and full year on March 16.