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Dollar General (DG) Q3 Earnings Beat Estimates, Decline Y/Y
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Dollar General Corporation (DG - Free Report) came up with third-quarter fiscal 2023 results, wherein both the top and bottom lines surpassed the Zacks Consensus Estimate. Net sales grew year over year while earnings declined. This Goodlettsville, TN-based company witnessed a same-store sales decline in the quarter.
Let’s Delve Deeper
The quarterly earnings came in at $1.26 per share, which beat the Zacks Consensus Estimate of $1.19 per share but decreased 45.9% from the prior-year period.
Net sales of $9,694.1 million rose 2.4% from the prior-year period on sales contributions from new stores, partly offset by a fall in same-store sales and the impact of store closures. The top line came ahead of the Zacks Consensus Estimate of $9,646 million.
Dollar General’s same-store sales fell 1.3% year over year, owing to a lower average transaction amount, partly offset by an increase in customer traffic. Same-store sales reflected declines in the home, seasonal, consumable and apparel categories.
Sales increased 3.6% year over year to $ 7,940.5 million for Consumables. However, sales declined 0.2% to $940.6 million for Seasonal, 7% to $534.5 million for Home Products and 1.5% to $278.5 million for the Apparel category.
Gross profit dipped 2.5% to $2,812.5 million in the reported quarter and the gross margin decreased 147 basis points to 29%. The decline in the gross margin can be attributed to lower inventory markups, increased shrink and higher markdowns, partly offset by a lower LIFO provision and decreased transportation costs.
SG&A expenses, as a percentage of net sales, increased 183 basis points to 24.5% in the quarter. Operating profit declined 41.1% to $433.5 million.
Store Update
In the third quarter of fiscal 2023, Dollar General opened 263 stores, remodeled 545 stores and relocated 44 stores. In fiscal 2024, the company anticipates carrying out 2,385 real estate projects, including 800 store openings, 1,500 remodels and 85 store relocations.
Dollar General Corporation Price, Consensus and EPS Surprise
Dollar General ended the quarter with cash and cash equivalents of $365.4 million, long-term obligations of $6,440.8 million and shareholders’ equity of $6,451.9 million.
Management incurred capital expenditures of $1.2 billion during the 39-week period ended Nov 3. For fiscal 2023, the company still anticipates capital expenditures in the band of $1.6-$1.7 billion.
During the third quarter of fiscal 2023, Dollar General did not repurchase shares. The company had $1.4 billion remaining under its authorization at the end of the quarter. It currently predicts no share repurchases for the fiscal year. On Dec 6, 2023, the firm announced a quarterly dividend of 59 cents per share, payable on or before Jan 23, 2024, to shareholders of record as of Jan 9, 2024.
Outlook
The company has been taking actions to accelerate the pace of inventory-reduction efforts and additional investments in planned areas like retail labor to elevate the in-store experience.
For fiscal 2023, management now projects net sales growth to be in the band of 1.5-2.5% versus the previous expectation of 1.3-3.3%. This includes a negative impact of about two percentage points owing to the lapping fiscal 2022 53rd week. Same-store sales growth is likely to come in the range of a decline of about 1% to flat against the previous guidance range of a 1% decline to 1% growth.
For fiscal 2023, the company now expects earnings per share to be $7.10-$7.60 or a decrease of 29-34% versus the prior expectation of about a 22-34% decline. This view includes the adverse impact of nearly four percentage points owing to higher interest expense.
Shares of this Zacks Rank #4 (Sell) company have gained 5.3% in the past three months compared with the industry’s growth of 6.5%.
MINISO Group operates as a retailer and wholesaler of lifestyle products. The Zacks Consensus Estimate for MNSO’s current financial-year earnings per share and sales suggests growth of 43.6% and 29.9%, respectively, from the corresponding year-ago reported figures.
Deckers Outdoor is a leading producer and brand manager of innovative, niche footwear and accessories. The Zacks Consensus Estimate for Deckers’ current fiscal-year earnings and sales indicates growth of 20.9% and 11.4%, respectively, from the previous year’s reported figures. DECK has a trailing four-quarter earnings surprise of 26.3% on average.
MarineMax is a recreational boat and yacht retailer and a superyacht services company. MarineMax’s earnings came in line with the Zacks Consensus Estimate in the last reported quarter. The Zacks Consensus Estimate for HZO’s current financial year sales suggests growth of 3.1% from the year-ago period’s figures.
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Dollar General (DG) Q3 Earnings Beat Estimates, Decline Y/Y
Dollar General Corporation (DG - Free Report) came up with third-quarter fiscal 2023 results, wherein both the top and bottom lines surpassed the Zacks Consensus Estimate. Net sales grew year over year while earnings declined. This Goodlettsville, TN-based company witnessed a same-store sales decline in the quarter.
Let’s Delve Deeper
The quarterly earnings came in at $1.26 per share, which beat the Zacks Consensus Estimate of $1.19 per share but decreased 45.9% from the prior-year period.
Net sales of $9,694.1 million rose 2.4% from the prior-year period on sales contributions from new stores, partly offset by a fall in same-store sales and the impact of store closures. The top line came ahead of the Zacks Consensus Estimate of $9,646 million.
Dollar General’s same-store sales fell 1.3% year over year, owing to a lower average transaction amount, partly offset by an increase in customer traffic. Same-store sales reflected declines in the home, seasonal, consumable and apparel categories.
Sales increased 3.6% year over year to $ 7,940.5 million for Consumables. However, sales declined 0.2% to $940.6 million for Seasonal, 7% to $534.5 million for Home Products and 1.5% to $278.5 million for the Apparel category.
Gross profit dipped 2.5% to $2,812.5 million in the reported quarter and the gross margin decreased 147 basis points to 29%. The decline in the gross margin can be attributed to lower inventory markups, increased shrink and higher markdowns, partly offset by a lower LIFO provision and decreased transportation costs.
SG&A expenses, as a percentage of net sales, increased 183 basis points to 24.5% in the quarter. Operating profit declined 41.1% to $433.5 million.
Store Update
In the third quarter of fiscal 2023, Dollar General opened 263 stores, remodeled 545 stores and relocated 44 stores. In fiscal 2024, the company anticipates carrying out 2,385 real estate projects, including 800 store openings, 1,500 remodels and 85 store relocations.
Dollar General Corporation Price, Consensus and EPS Surprise
Dollar General Corporation price-consensus-eps-surprise-chart | Dollar General Corporation Quote
Other Financial Details
Dollar General ended the quarter with cash and cash equivalents of $365.4 million, long-term obligations of $6,440.8 million and shareholders’ equity of $6,451.9 million.
Management incurred capital expenditures of $1.2 billion during the 39-week period ended Nov 3. For fiscal 2023, the company still anticipates capital expenditures in the band of $1.6-$1.7 billion.
During the third quarter of fiscal 2023, Dollar General did not repurchase shares. The company had $1.4 billion remaining under its authorization at the end of the quarter. It currently predicts no share repurchases for the fiscal year. On Dec 6, 2023, the firm announced a quarterly dividend of 59 cents per share, payable on or before Jan 23, 2024, to shareholders of record as of Jan 9, 2024.
Outlook
The company has been taking actions to accelerate the pace of inventory-reduction efforts and additional investments in planned areas like retail labor to elevate the in-store experience.
For fiscal 2023, management now projects net sales growth to be in the band of 1.5-2.5% versus the previous expectation of 1.3-3.3%. This includes a negative impact of about two percentage points owing to the lapping fiscal 2022 53rd week. Same-store sales growth is likely to come in the range of a decline of about 1% to flat against the previous guidance range of a 1% decline to 1% growth.
For fiscal 2023, the company now expects earnings per share to be $7.10-$7.60 or a decrease of 29-34% versus the prior expectation of about a 22-34% decline. This view includes the adverse impact of nearly four percentage points owing to higher interest expense.
Shares of this Zacks Rank #4 (Sell) company have gained 5.3% in the past three months compared with the industry’s growth of 6.5%.
3 Red-Hot Stocks
Some better-ranked stocks are MINISO Group Holding Limited (MNSO - Free Report) , Deckers Outdoor Corporation (DECK - Free Report) and MarineMax (HZO - Free Report) . While MINISO Group sports a Zacks Rank #1 (Strong Buy), Deckers Outdoor and MarineMax, each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
MINISO Group operates as a retailer and wholesaler of lifestyle products. The Zacks Consensus Estimate for MNSO’s current financial-year earnings per share and sales suggests growth of 43.6% and 29.9%, respectively, from the corresponding year-ago reported figures.
Deckers Outdoor is a leading producer and brand manager of innovative, niche footwear and accessories. The Zacks Consensus Estimate for Deckers’ current fiscal-year earnings and sales indicates growth of 20.9% and 11.4%, respectively, from the previous year’s reported figures. DECK has a trailing four-quarter earnings surprise of 26.3% on average.
MarineMax is a recreational boat and yacht retailer and a superyacht services company. MarineMax’s earnings came in line with the Zacks Consensus Estimate in the last reported quarter. The Zacks Consensus Estimate for HZO’s current financial year sales suggests growth of 3.1% from the year-ago period’s figures.