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Dollar General beats Street, keeps expansion plans on track

Dollar General plans to open 975 new stores during fiscal 2019, which began with a strong financial performance.

In addition to opening 975 stores, Dollar General also intends to remodel 1,000 locations and relocate 100 stores this fiscal year. The dollar store retailer has reason to be optimistic about its growth plans after reporting first-quarter results that topped Wall Street estimates for earnings per share and net sales.

Net sales increased 8% to $6.6 billion in the first quarter of 2019, up 8% from $6.1 billion in the first quarter of 2018. This net sales increase beat analyst consensus of $6.5 billion and included positive sales contributions from new stores and 3.8% growth in same-store sales, modestly offset by the impact of store closures.

Same-store sales rose due to increases in both average transaction amount and customer traffic, with growth in the consumables, seasonal, and home categories, partially offset by declines in the apparel category.

Net income totaled $385 million, up 5% from $364.8 million the prior year quarter. Earnings per share were $1.48, a 9% increase from $1.36 a year earlier and beating the consensus estimate of $1.39 per share.

“Our team continued to make great progress on our strategic initiatives this quarter, while remaining focused on our four operating priorities,” said Todd Vasos, Dollar General’s CEO. “This hard work and focus led to strong top- and bottom-line growth, and I’m very proud of our achievements. Looking forward, we have a wide variety of initiatives and projects that we believe can help extend our growth trajectory over both the near and longer term. During 2019, we will enter our 80th year of serving others, and we remain dedicated to bringing innovation to our retail channel and delivering on our commitment of value and convenience to our customers. We are excited about our future and believe we are creating long-term value for our shareholders.”

For fiscal year 2019, the company continues to expect net sales growth of approximately 7% and same-store sales growth of approximately 2.5%.

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