Dollar General Corporation (NYSE: DG) has released its financial results for the second quarter of fiscal 2024, which ended on August 2, 2024.
Company Financial Results
The company reported a net sales increase of 4.2% to $10.2 billion, up from $9.8 billion in the same period last year. This growth was driven primarily by contributions from new stores and a modest increase in same-store sales by 0.5%. However, operating profit decreased by 20.6% to $550.0 million and diluted earnings per share (EPS) fell by 20.2% to $1.70.
Failure to Meet Analyst Expectations
Despite the increase in customer traffic, Dollar General’s financial performance fell short of its own expectations. Key metrics, such as diluted earnings per share and revenue, did not meet forecasted levels. The EPS for the quarter was $1.70, a 20.2% decrease from the previous year, while $1.80 was expected. Revenue was reported at $10.2 billion, falling short of the anticipated $10.38 billion. Factors including increased costs in retail labor, depreciation, store occupancy, and utilities contributed to higher selling, general, and administrative expenses, which increased to 24.6% of net sales from 24.0% in the prior year.
Revised Financial Outlook for 2024
Dollar General has revised its financial guidance for fiscal year 2024 to reflect ongoing softer sales trends and related gross margin impacts. The company now anticipates net sales growth in the range of 4.7% to 5.3%, down from the previous expectation of 6.0% to 6.7%. Same-store sales growth is now expected to be between 1.0% and 1.6%, compared to the earlier forecast of 2.0% to 2.7%. Additionally, the company has revised its diluted EPS guidance to a range of $5.50 to $6.20, down from the previous expectation of $6.80 to $7.55. The updated guidance also includes an assumption of no share repurchases for the fiscal year 2024. Capital expenditures are expected to be between $1.3 billion and $1.4 billion, reflecting investments in strategic initiatives. The company plans to undertake 2,435 real estate projects, including 730 new store openings, 1,620 remodels, and 85 store relocations.
Despite the challenging retail environment, Dollar General remains committed to enhancing its value and convenience offerings while focusing on long-term shareholder value.
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