Dollar General Corporation (NYSE: DG) reported third-quarter adjusted EPS of $0.89, down 29.4% year-over-year, missing the consensus of $0.94.
The retail behemoth reported quarterly sales of $10.2 billion, slightly above the consensus of $10.14 billion.
Sales increased 5%, driven by favorable sales contributions from new stores and growth in same-store sales, partially offset by the impact of store closures.
Same-store sales increased 1.3%, reflecting increases of 1.1% in average transaction amount and 0.3% in customer traffic. Same-store sales included growth in the consumables category, partially offset by declines in home, seasonal, and apparel categories.
"We are pleased with our team's execution in the third quarter, particularly in light of multiple hurricanes that impacted our business," said Todd Vasos, Dollar General's chief executive officer.
"While we continue to operate in an environment where our core customer is financially constrained, we delivered same-store sales near the top end of our expectations for the quarter," Vasos added.
Outlook: Dollar General has updated its financial guidance, including the negative impact of hurricane-related expenses of $32.7 million in the third quarter and an estimated fourth-quarter negative impact of approximately $10 million.
The company expects 2024 net sales growth of approximately 4.8% to 5.1%, compared to its previous expectation of roughly 4.7% to 5.3%.
- Same-store sales growth in the range of approximately 1.1% to 1.4%, compared to its previous expectation in the range of 1.0% to 1.6%
- Diluted EPS of approximately $5.50 to $5.90, compared to its previous expectation of approximately $5.50 to $6.20 and the consensus of $5.82.
Dollar General plans to increase real estate projects for fiscal year 2025. According to CFO Kelly Dilts, the company focuses on enhancing its stores through Project Elevate, which introduces lighter remodels for mature stores that are not yet ready for full renovations.
These updates will include customer-focused improvements, such as updated layouts and expanded product displays. Key initiatives for fiscal year 2025 include:
- Opening approximately 575 new U.S. stores and up to 15 in Mexico.
- Fully remodeling 2,000 stores.
- Remodeling 2,250 stores as part of Project Elevate.
- Relocating approximately 45 stores.
Price Action: At the last check on Thursday, DG stock was down 3.00% to $77.12 sday.