uploads///d

Dollar General Reports Better-than-Expected Sales Comps in 4Q17

By

Mar. 16 2018, Updated 3:15 p.m. ET

Dollar General misses 4Q17 top-line expectations

As we discussed in Part 1 of this series, Dollar General (DG) reported its fourth-quarter 2017 results on March 15. The discount retailer’s top line increased 2% YoY (year-over-year) to $6.13 billion. In comparison, Wall Street was expecting a 3.3% jump in the company’s sales to $6.2 billion.

Sales growth during the quarter was negatively impacted by approximately seven percentage points from the additional 53rd week in 2016.

Article continues below advertisement

In comparison, competitor Dollar Tree (DLTR)—which reported its fourth-quarter results on March 7— posted a 12.9% YoY increase in total sales to $6.36 billion. More than 50% of this increase was driven by the additional 53rd week in 2017. The company, however, failed to meet Wall Street expectations by $30 million.

Sales comps were sturdy in Q4

Dollar General’s same-store sales grew 3.3% during the quarter, versus analysts’ expectations of a 2.5% rise. In comparison, comps were up 1% during the same quarter last year.

Comps growth during the quarter was driven primarily by an increase in average transaction size, as the company recorded a decline in consumer traffic. Consumables and Seasonal were the key comp-driving categories. Their results were partially offset by weak performances for the Apparel and Home categories.

“I am pleased with our overall fourth quarter performance, as we delivered strong same-store sales growth of 3.3%, while achieving a healthy rate of gross margin expansion,” commented Todd Vasos, Dollar General’s CEO.

In comparison, Dollar Tree’s same-store sales increased 2.4% in Q4, missing analysts’ expectations of a 2.7% jump. The discount retailer’s Dollar Tree banner, which strictly sells products under $1 in value, recorded its 40th consecutive quarter of comps growth.

Investors looking for exposure to Dollar General can consider the Van Eck Retail RTF (RTH), which invests 2.6% of its total holdings in the company.

Advertisement

More From Market Realist

    • CONNECT with Market Realist
    • Link to Facebook
    • Link to Twitter
    • Link to Instagram
    • Link to Email Subscribe
    Market Realist Logo
    Do Not Sell My Personal Information

    © Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.