Dollar General Corp. reported a “modest decrease” in customer traffic as customers reigned in discretionary spending.
The discounter also reiterated its plans to execute 3,170 real estate projects in fiscal 2023, including 1,050 new store openings, 2,000 remodels, and 120 store relocations.
Net income totaled $659.1 million, or $2.96 per share, for the quarter ended Feb. 3, up from $597.4 million, or $2.57 per share, in the year-age period.
Net sales increased 17.9% to $10.2 billion. Same-store sales rose 5.7%, with growth in the consumables category partially offset by declines in the apparel, home, and seasonal-products categories. The company noted that sales were driven by an increase in average transaction amount, partially offset by a modest decrease in customer traffic.
For the full year, Dollar General’s net sales increased 10.6% to $37.8 billion.
“Our fourth-quarter sales results were strong, although below our expectations, and we are pleased with continued market share gains in both consumables and non-consumables, as well as continued growth with new and existing customers,” said CEO Jeff Owen, who was appointed CEO in November.
Owen noted that, in fiscal 2022, Dollar General executed nearly 3,000 real estate projects, completed the rollout of its non-consumables initiative, nearly tripled its Popshelf store count, more than doubled the size of our private tractor fleet and opened three new distribution centers. (Real estate projects including opening 1,039 new stores and remodeling 1,795 stores.)
[Read More: Dollar General’s Popshelf concept on fast track for expansion]
Dollar General anticipates capital expenditures ranging from $1.8 billion to $1.9 billion in its current fiscal year.
“Looking ahead, we are excited about our plans for fiscal 2023, which include continued investment in our strategic initiatives and an incremental investment of approximately $100 million in our stores, primarily in incremental labor hours, as we look to build on our sales momentum and capture additional market share by further enhancing store standards and the in-store experience,” he added.
For fiscal 2023, Dollar General is expecting net sales growth of approximately 5.5% to 6.0% (including an anticipated two-point negative impact related to the fact that fiscal 2022 had 53 weeks) and 3.0% to 3.5% growth in same-store sales. Analysts were modeling 3.4% growth.
As of March 3, 2023, the company operated 19,147 stores.