Dollar General reported better-than-expected first-quarter earnings and sales as stimulus checks gave a boost to revenue.
The discounter executed more than 800 real estate projects (260 new stores, 543 remodels and 33 relocations) during the quarter, including store openings in its new PopShelf and larger-footprint Dollar General formats.
The retailer said that it remains on track to open 1,050 new stores, remodel 1,750 locations and relocate 100 stores in 2021. It continues to expect capital expenditures in the range of $1.05 billion to $1.15 billion.
Dollar General’s net income totaled $677.7 million, or $2.82 per share, in the quarter ended April 30, up from $650.4 million, or $2.56 per share, in the year-ago period. Analysts had estimated earnings per share of $2.19.
Net sales fell 0.6% to $8.40 billion, beating estimates of $8.27 billion.
Same-store sales decreased 4.6% compared to the year-ago period during which time Dollar General stores, as “essential” retail, remained open during the pandemic. The decrease was driven by a decline in customer traffic, partially offset by an increase in average transaction amount. Same-store sales rose 17.1% on a two-year-stack basis (represents the sum of actual 2020 same-store sales and the corresponding low and high ends of the 2021 guidance range.)
“Our first-quarter results exceeded our expectations, reflecting strong underlying performance across the business, which we believe was enhanced by the most recent round of government stimulus payment,” said CEO Todd Vasos. “Given our first-quarter outperformance, we are raising our financial outlook for fiscal 2021.”
For the full year, Dollar General expects sales in the range of a 1% decline to an increase of 1%, up from previous guidance for a 2% decline, a same-store sales of decline of 3% to 5%, and earnings per share of $9.50 to $10.20.