Market Overview

Dollar General Posts Upbeat Q2 Profit, But Sales Miss Views


Dollar General Corp. (NYSE: DG) reported better-than-expected earnings for the second quarter, but the company's sales missed analysts' estimates.

The Goodlettsville, Tennessee-based company posted a quarterly profit of $282.3 million, or $0.95 per share, versus a year-ago profit of $251.3 million, or $0.83 per share.

Its sales gained 7.9 percent year-over-year to $5.10 billion from $4.72 billion. However, analysts were expecting earnings of $0.94 per share on revenue of $5.14 billion.

The average estimate among 10 Estimize users was for earnings of $0.95 per share and revenue of $5.1 billion.

Its same-store sales rose 2.8 percent in the quarter.

Gross margin expanded 36 basis points to 31.2 percent.

During the second quarter, Dollar General repurchased 2.6 million shares of its common stock at an average price of $77.84 per share.

As of July 31, 2015, Dollar General's total merchandise inventories, at cost, rose to $3.03 billion, versus $2.79 billion as of August 1, 2014.

"With new leadership in place for store operations and merchandising, we are well positioned to execute our key initiatives to drive topline growth over time. Looking ahead to 2016, our team is energized to accelerate our pace of growth as we focus on providing our consumers with everyday low prices and convenient locations. We remain confident in the long-term growth prospects for Dollar General to deliver strong financial results and healthy cash returns for our shareholders," said Todd Vasos, Dollar General's chief executive officer.

Dollar General affirmed its earnings outlook of $3.85 to $3.95 per share on sales growth of 8 percent to 9 percent.

Dollar General shares fell 3.53 percent to $74.00 in pre-market trading.


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