Dollar General Q2 beats Street; on track to open 1,050 stores

Dollar General reported second-quarter profit and sales that beat analysts’ estimates but edged down over last year’s second quarter.

The discounter reported that its net income totaled $637.0 million, or $2.69 per share, for the quarter ended Juluy 30,  down from $787.6 million, or $3.12 per share in the year-ago period. Analysts had expected earnings per share of $2.62.

Sales inched down 0.4% of $8.65 billion, topping estimates of $8.61 billion. Same-store sales fell 4.7%, ahead of estimates for a 5% decline, and increased 14.1% on a two-year stack basis.

Dollar General said its second-quarter same-store decline was driven by a decline in customer traffic, partially offset by an increase in average transaction amount. Sales fell in the consumables, seasonal, apparel, and home products categories.

The retailer  executed more than 750 real estate projects during the quarter, including the opening its first pOpshelf in-store concept and larger footprint Dollar General formats. It also completed the initial rollout of DG Fresh. Dollar General reiterated its plans  to open 1,050 new stores in fiscal 2021, along with 1,750 store remodels, and 100 store relocations.

[Read More: Dollar General could double store count]

“Despite what remains a challenging operating environment, including additional uncertainties brought on by the Delta variant and pressures on the global supply chain, our team has continued to successfully adapt and deliver for our customers,” said Todd Vasos, Dollar General’s CEO. “We remain focused on delivering value and convenience for our customers, while driving long-term sustainable growth and value for our shareholders. We feel very good about the underlying strength of the business, and we are excited about our plans for the second half of fiscal 2021.”

[Read More: Dollar General makes push into health care]

During the second, Dollar General opened 270 new stores, remodeled 477 stores and relocated 25 stores.  It ended the quarter with 17,683 stores in 46 states.

For the year, Dollar General now expects net sales growth of 0.5% to 1.5%, up from previous guidance for a range of a 1% decline to 1% growth. Same-store sales are expected to fall 3.5% to 2.5% compared with previous guidance for a decline of 3% to 5%. It narrowed its earnings per share outlook is to $9.60 to $10.20, compared to its previous forecast of $9.50 to $10.20.