uploads/2018/05/grocery-store-2619380_1280-3.jpg

Dollar General Stock Tumbles after Earnings Miss

By

Updated

Dollar General falls short of first-quarter expectations

The Tennessee-based Dollar General (DG) reported its results for the first quarter, which ended on May 4, before the opening bell today. The company fell short of Wall Street’s sales as well as profit expectations during the quarter.

Total revenue increased 9% YoY (year-over-year) to $6.1 billion, missing Thomson Reuters I/B/E/S Estimates by $80 million. Adjusted earnings per share rose 32% YoY to $1.36, four cents below expectations.

Competitor Dollar Tree (DLTR), which also reported results this morning, missed consensus top- and bottom-line expectations. Its total revenue increased 5% YoY to $5.55 billion, $8 million short of forecasts. Adjusted earnings per share soared 21.4% YoY to $1.19, four cents below projections.

Article continues below advertisement

Sales comps also disappoint investors

Dollar General’s same-store sales also failed to please investors. Comps increased 2.1% during the quarter, compared to analysts’ expectation of a 3.24% jump. The company recorded a fall in traffic during the quarter and said that unusually cold and damp weather negatively impacted its comps.

Guidance

Dollar General reiterated its full-year sales and earnings guidance. It continues to expect a 9% YoY increase in fiscal 2018 total sales, driven by 2% growth in sales comps.

Diluted earnings per share are projected to range between $5.95 and $6.15, based on an effective tax rate range of 22% to 23% for the year. At the mid-point, the guidance reflects an EPS growth of 32% over the last year.

Dollar Tree, on the other hand, lowered its EPS guidance to $4.80–$5.10, compared to the previous range of $5.25–$5.60.

Stock price impact

Poor showings on all parameters dragged Dollar General’s stock into the red this morning. It traded at $89.25 at 9:40 EST, 7.5% below the previous day’s closing price. Dollar Tree was in deeper in the red and fell 11.6% at 9:40.
Advertisement

More From Market Realist