Deutsche Bank Expects 'Solid Fundamentals' In Dollar General's Q3 Print

Paul Trussell of Deutsche Bank expects Dollar General Corp. DG to report "solid fundamentals" when the company reports its third-quarter results on Thursday before market open. "Like other discount and dollar store retailers, we think Dollar General benefited from core consumers having more to spend on discretionary items, leading to stronger than expected back to school, seasonal, and apparel/home sales," Trussell wrote. Trussell is raising his third-quarter same-store-sales forecast to 3.3 percent from 2.7 percent. At the same time, the analyst is expecting less impact from merchandise mix and tobacco, continued progress on sourcing and private label initiatives will result in an improved gross margin. Unrelated to the upcoming third quarter, Trussell expects Dollar General to extend a new offer to acquire Family Dollar by mid-December. The analyst maintains a view that Dollar General will still successfully acquire Family Dollar. Trussell expects Dollar General to earn $0.81 per share on net sales of $4.7499 billion. Shares are Buy rated with a $73 price target. Shares of Dollar General were recently up 1.5 percent at $67.31.