Dollar General tops Q1 expectations on strong customer traffic growth

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Dollar General tops Q1 expectations on strong customer traffic growth
Credit: © Reuters.

Dollar General (NYSE: DG ) announced financial results for the first quarter of fiscal year 2024, surpassing analysts' expectations with a reported EPS of $1.65, which is $0.07 higher than the estimated $1.58, sending its stock higher.

The company's revenue also slightly exceeded forecasts, coming in at $9.91 billion against the consensus estimate of $9.89 billion. Shares of Dollar General rose 6.3% following the earnings release, indicating a strong investor response to the company's performance and financial outlook.

In comparison to the same quarter last year, net sales saw a 6.1% increase from $9.3 billion, while same-store sales grew by 2.4%. Operating profit, however, experienced a significant decline of 26.3% to $546.1 million, and diluted EPS decreased by 29.5%.

The company attributes its top and bottom-line results, which exceeded their expectations, to robust customer traffic growth and market share gains. CEO Todd Vasos expressed satisfaction with the quarter's performance, crediting the company's focused strategy and improved execution.

Despite the positive start to the year, Dollar General's guidance for the second quarter of fiscal year 2024 indicates a cautious outlook.

The company forecasts diluted EPS in the range of $1.70 to $1.85, which falls below the analysts' consensus of $1.92. Same-store sales growth is expected in the low 2% range for the upcoming quarter.

For the full fiscal year 2024, the company reiterates its guidance, projecting a net sales growth of approximately 6.0% to 6.7% and same-store sales growth between 2.0% and 2.7%. The midpoint of the full-year EPS guidance range is $7.175, marginally below the consensus estimate of $7.25.

The company's CFO, Kelly Dilts, acknowledged the challenges posed by shrink and sales mix but reaffirmed the company's commitment to mitigating these issues and maintaining strong financial performance throughout the year.

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