Dollar General blows past Street estimates in Q2, raises guidance; names COO

Dollar General on Thursday reported a strong second-quarter performance, beating Wall Street’s earnings and sales expectations, and announced two key promotions.

The discounter has appointed Jeffery C. Owen, as COO, with responsibility for store operations, merchandising and supply chain. Owen, a Dollar General veteran with more than 25 years of retail experience, returned to the chain in June 2015 as executive VP of store operations. Steven G. Sunderland will succeed Owen as executive VP of store operations. He joined Dollar General in September 2014 as senior VP of store ops, overseeing stores predominately throughout the southern half of the country.

Dollar General’s net income rose to $426.6 million, or $1.65 a share, in the quarter ended Aug. 2, up from $407.2 million, or $1.52 a share, in the year-ago period. Adjusted per-share earnings came to $1.74, easily topping analysts’ estimates of $1.57 a share.

Sales rose 8.4% to $7.0 billion, beating estimates of $6.9 billion. Same-store sales rose 4%, also more than expected.

“Our results this quarter were fueled by solid execution across many fronts, including category management, merchandise innovation, store operations, and continued progress with our strategic initiatives,” said Todd Vasos, Dollar General’s CEO. “In addition, we remained focused on disciplined cost control, which culminated in another quarter of strong earnings growth.”

Given its first-half performance and expectations for the remainder of the year, Dollar General said it was raising its full-year financial guidance. It now expects fiscal 2019 sales growth of about 8%, up from a previous forecast of 7% growth. It expects same-store sales to grow in the low-to-mid 3% range, above its prior forecast of 2.5%. Adjusted earnings per share are expected to range from $6.45 to $6.60.

As of August 2, Dollar General operated 15,836 stores in 44 states.