Dollar General Corp. continued its financial momentum from the first quarter and elevated the position of its chief people officer.
The discounter, which had a blowout quarter in Q1 2020, reported a Q2 net sales increase of 24% to $8.7 billion from $7 billion the same quarter a year earlier. The net sales increase included positive sales contributions from new stores and growth in same-store sales, modestly offset by the impact of store closures. Same-store sales increased 18.8% compared to Q2 2019, driven by an increase in average transaction amount, partially offset by a decline in customer traffic.
Same-store sales increased in each of the consumables, seasonal, home products and apparel categories, with the largest percentage increase in the home products category. Dollar General believes consumer behavior driven by COVID-19 had a significant positive effect on net sales and same-store sales.
Net income surged 85% to $787.6 million from $426.5 million, while diluted earnings per share (EPS) rose 87% to $3.12 from $1.65. Lower expenses and reduced markdowns, combined with higher sales, helped drive strong profit growth.
Looking ahead, Dollar General is accelerating its planned real estate expansion for the fiscal year. The company now expects to complete 2,780 real estate projects, including 1,000 new store openings, 1,670 mature store remodels, and 110 store relocations by year-end, compared to its previous expectation of 2,580 real estate projects, including 1,000 new store openings, 1,500 mature store remodels, and 80 store relocations. Dollar General is also moving ahead with BOPIS, fresh food, and non-consumable initiatives.
Because it is difficult to predict specific outcomes due to the COVID-19 pandemic, Dollar General is not issuing updated fiscal 2020 sales or EPS guidance at this time
Dollar General is also promoting Kathy Reardon to executive VP and chief people officer effective Aug. 27. Reardon joined Dollar General in 2009 and has most recently served as senior VP and chief people officer since March 2019. Reardon joined Dollar General as director of corporate human resources and during the past 11 years has gained leadership experience in corporate human resources, talent management and field human resources.
“Kathy’s effectiveness as a leader at Dollar General is evident in the Company’s lowest store manager turnover on record, increased employee engagement scores and leading our ongoing diversity and inclusion journey, which extends to all levels of our organization,” said Todd Vasos, Dollar General’s CEO. “Kathy has brought a wealth of leadership, knowledge and experience to Dollar General, and I look forward to the continued contributions she will make to our organization.”
Vasos also commented on Dollar General’s strong quarterly performance.
“I want to thank our associates for their exceptional work over the past several months as we continue to navigate this challenging and dynamic operating environment,” said Vasos. “As the neighborhood general store for thousands of communities across the country, we appreciate the importance of our role in providing customers with affordable, convenient, and close-to-home access to everyday essentials. As a result of the team’s strong execution and tireless commitment to serving our customers, we are pleased to report strong second-quarter financial results.”
Dollar General operates close to 17,000 stores in 46 states.