Cost pressures and supply disruptions will combine for a ‘challenging’ first quarter, but Dollar General still sees full year sales growth of around 10% as shoppers look for discounted goods amid rising inflation.
Dollar General (DG) – Get Dollar General Corporation Report shares jumped higher Thursday after the discount retailer posted in-line fourth quarter earnings while boosting its dividend by nearly a third and forecast stronger-than-expected full year sales.
Dollar General said earnings for the three months ending on January 28 fell 2% to $2.57 per share, but came in largely in-line with the Street consensus forecast. Group revenues rose 3.6% to $8.7 billion, although same-store sales were down 1.4% compared to last year.
Looking into the current financial year, Dollar General said it sees same-store sales growth in the region of 2.5%, with net sales rising 10%, although supply chain challenges and elevated cost pressures will combine for a ‘challenging’ first quarter.
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“We are pleased with our fourth quarter and fiscal year results, and I want to thank our associates for their unwavering commitment to meeting the critical needs of our customers during the pandemic,” said CEO Todd Vasos. “Despite a more challenging than expected operating environment, our teams remained focused on executing our operating priorities and advancing our strategic initiatives, which we believe position us well for solid sales and profit growth in 2022 and beyond.”
“Overall, we are excited about our plans for 2022, as we look to further differentiate Dollar General from the rest of the retail landscape, while delivering long-term sustainable growth and value for our shareholders,” he added.
Dollar General shares were marked 5.4% higher in pre-market trading to indicate an opening bell price of $223.90 each.
Dollar General lifted its dividend by 31%, to 55 cents per share, payable on or before April 19 to shareholders of record on April 5.
“As always, we continue to be disciplined in managing expenses and capital with the goal of delivering consistent, strong financial performance, while strategically investing for the long term,’ said CFO John Garratt.
