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What to Expect from Dollar General’s Q1 Results

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Upcoming results

Dollar General (DG) will announce its results for the first quarter of fiscal 2019 (which ended on May 3) on May 30. Analysts expect Dollar General’s sales to rise 7.4% to $6.57 billion in the quarter, while its adjusted EPS are expected to rise 2.2% to $1.39.

In March, Dollar General reported lower-than-expected earnings for the fourth quarter of fiscal 2018. Its stock fell 7.5% on March 14, the day it declared its fourth-quarter earnings results. The impact of the company’s investments on its fiscal 2019 profitability was also a matter of concern for investors.

On May 24, Dollar General stock was rated as a “buy” by 20 out of the 29 analysts covering the retailer. The stock had “hold” recommendations from eight analysts and a “sell” recommendation from one.

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YTD movement

As of May 24, Dollar General stock had risen 12.8% year-to-date compared to the 9.0% rise in Dollar Tree (DLTR) stock and the 12.7% rise in the S&P 500 Index.

As of May 24, the 12-month average price target for Dollar General stock was $126, indicating a potential upside of over 3.0%.

Dollar General’s sales increased 9.2% to $25.6 billion in fiscal 2018, which ended on February 1. The company’s same-store sales increased 3.2% and marked the 29th consecutive year of same-store sales growth.

Dollar General is undertaking several initiatives to improve its sales, including expanding its assortment of nonconsumable merchandise categories (such as home and domestic) to additional stores. However, the company’s investments in its strategic initiatives are expected to put pressure on its profitability in fiscal 2019. The recently announced increase in tariffs is also expected to be a drag on the company’s performance.

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