Dollar General Q3 Earnings Top Estimates, Tightens FY21 Outlook; To Accelerate pOpshelf Store Concept - Dollar General (NYSE:DG)

Dollar General Corp (NYSE:DG) reported third-quarter FY21 sales growth of 3.9% year-on-year, to $8.52 billion, beating the analyst consensus of $8.49 billion. EPS of $2.08 beat the analyst consensus of $2.01.

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Same-store sales decreased 0.6% versus last year. Same-store sales increased 11.6% on a two-year stack basis.
The net sales increase was primarily driven by positive sales contributions from new stores, partially offset by a slight decline in same-store sales and the impact of store closures.
The gross profit margin for the quarter decreased 57 basis points Y/Y to 30.8%. The operating margin was 7.8%, and operating income for the quarter fell 13.9% to $665.6 million.
The company held $488.7 million in cash and equivalents as of October 29, 2021. Net cash provided by operating activities for the nine months totaled $2.2 billion.
On December 1, 2021, the company’s board increased the authorization under the share repurchase program by $2.0 billion. The total remaining authorization for future repurchases was $619 million at Q3 end.
On November 30, 2021, the company’s board declared a quarterly cash dividend of $0.42 per share on its common stock, payable on or before January 18, 2022, to shareholders of record on January 4, 2022.
Dollar General plans to accelerate the pace of new store openings, targeting a total of approximately 1,000 pOpshelf locations by fiscal year-end 2025.
The company reiterated its plans to execute 2,900 real estate projects in FY21, including 1,050 new store openings, 1,750 store remodels, and 100 store relocations.
Outlook: Dollar General sees FY21 sales growth of 1.0% - 1.5% (prior 0.5% - 1.5% growth). Same-store sales decline of 3.0% - 2.5% (prior decline of 3.5%-2.5%).
The company expects FY21 EPS of $9.90 - $10.20 (prior $9.60 - $10.20) versus the consensus of $10.20.
Price Action: DG shares are trading lower by 3.45% at $215.11 in premarket on the last check Thursday.

DGDollar General Corp

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