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Dollar General’s 4Q17 Top-Line Expectations

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Dec. 4 2020, Updated 10:50 a.m. ET

Can Dollar General’s top line grow 3% in 4Q17?

Dollar General (DG), which will report its 4Q17 results on March 15, 2018, is expected to see a 3.3% rise in sales to $6.2 billion.

Its top line improved 8.5% to $17.3 billion during the first nine months of 2017 compared to the same period the previous year. Driving this growth were the company’s strong same-store sales and its continuous store expansions. Comps improved from 0.7% in 1Q17 to 2.6% in 2Q17, and then to 4.3% in 3Q17. Management expects to close fiscal 2017 with a 2.5% rise in sales comps.

Discount store competitor Dollar Tree (DLTR) posted a 12.9% YoY (year-over-year) increase in total sales to $6.4 billion in its 4Q17 results on March 7, 2018. It didn’t meet Wall Street’s expectations since its comps grew 2.4% compared to analysts’ forecast of a 2.7% increase.

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What’s behind DG’s consistent performance?

Dollar General hasn’t missed consensus expectations in the last four quarters. Despite a challenging retail environment, the company has recorded growth in quarterly sales for the past ten years. Its strength lies in its strong business model that focuses on providing convenience and quality products at competitive prices.

For fiscal 2017, management has guided a 7% YoY increase in total sales. Wall Street projections are in line with management since analysts have forecast a 7.1% increase in sales to $23.5 billion.

Investors looking for exposure to Dollar General through ETFs can consider the Guggenheim S&P 500 Equal Weight Consumer Discretionary ETF (RCD), which invests 1.2% of its total holdings in the company.

Next, let’s look at Dollar General’s profitability and margins.

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