Dollar stores Dollar General (NYSE: DG) and Dollar Tree (NASDAQ: DLTR) both reported a healthy bump to sales figures throughout the second quarter despite many other retailers being negatively affected by the pandemic. High unemployment is the likely cause for continued success, causing consumers to seek out cheaper goods.
In Dollar General's SEC filings, the store saw a substantial increase in net income, rising to $787 million from $426 million, a hefty 85% increase. Net sales were up roughly 32%, reaching $8.7 billion from $6.9 billion. Earnings per share was up 91%, leaping from $1.65 to $3.15.
Dollar Tree's SEC filings were similarly promising. Net sales were up to $6.3 billion from $5.7 billion, just under a 10% increase. Net income was up 45%, rising from $180 million to $261 million. Earnings per share jumped 31%, reaching $1.10 from $0.76.
Dollar General capitalized on its successes, carrying out stock buybacks worth $602 million, translating to 3.2 million shares. Dollar General is expecting 2020 share buybacks to total $2.5 billion. The company is also projecting thousands of new store openings and remodels of older stores, as well as a few relocations. The number of real estate projects Dollar General is predicting is higher than earlier estimates.
Dollar Tree CEO and President Mike Witynski was vocally appreciative of his workforce's efforts during the pandemic, which he said drove Dollar Tree to its second-quarter successes.
"Our store and distribution center teams have done a remarkable job of serving customers through an incredibly dynamic time in retail. Their continual efforts to ensure we are providing a clean, safe shopping experience, along with the great value and convenience our stores offer, contributed to our solid operating performance for the quarter," Witynski said.
Witynski was also optimistic that Dollar Tree would be well off for the rest of the year, going on to say "We're going to be in a good position in the back half of the year and going into next year when customers are going to need us most as the extra benefits go away and with the unemployment rate where it is."
Going forward, its fairly reasonable to believe that success may continue, but sales figures may plateau due to deadlocked stimulus talks and the ongoing lack of employment across the country. Regardless, however, it is unlikely that the pandemic will do too much actual damage to either company, due to the increased number of consumers in need of lower-cost groceries and other essential goods.