Dollar General ended the quarter with 18,356 stores.
Dollar General reported a better-than-expected first quarter with strong topline growth amid cost controls that helped it manage inflation and supply chain pressures.
The discounter also confirmed its plans to open 1,110 new stores in fiscal 2022, along with 1,750 remodels, and 120 store relocations. The openings include up to 10 stores in Mexico, Dollar General’s first locations outside the United States. (During first quarter, the company opened 239 new stores, remodeled 532 stores, and relocated 32 stores.)
Dollar General’s net income fell to $552.7 million, or $2.41 a share, for the quarter ended April 30, from $677.7 million, or $2.82 a share, in the year-ago period. Analysts had estimated earnings per share of $2.32.
Sales rose 4.2% to $8.75 billion, topping estimates of $8.71 billion. Same-store sales fell 0.1%, less than expected.
Cost of sales growth outpaced sales growth, rising 6.5% to $6.02, as gross margin contracted to 31.3% from 32.4%.
"Despite ongoing headwinds due to supply chain pressures and heightened inflation, we remained focused on controlling what we can control and delivered solid financial results, which exceeded our expectations for sales and earnings per share for the quarter," said CEO Todd Vasos.
For fiscal 2022, the company now expects sales growth of 10.0% to 10.5% up from its previous forecast of 10%. It also raised its same-store sales growth guidance to 3.0% to 3.5% from 2.5%. Dollar General expects to repurchase $2.75 billion worth of its shares in fiscal 2022.
“We are pleased with our strong start to the year,” said CFO John Garratt. “As a result of our strong topline performance and current expectations for the remainder of the year, we are raising our net sales and same-store sales guidance for fiscal 2022. Looking ahead, our plans include targeted investments to further enhance the in-store experience, while driving an even greater improvement in in-stock levels and customer service. We believe these investments will position us well to build on our sales momentum as we move ahead.”
Dollar General operated 18,356 stores in 47 states as of April 29, 2022.