Summary
Dollar General Corporation's first quarter of fiscal year 2021 showed a slight decrease in net sales, down 0.6% to $8.4 billion, impacted by a 4.6% decrease in same-store sales primarily due to lower customer traffic, partially offset by an increase in average transaction amounts. Despite the dip in sales, the company demonstrated improved profitability with gross profit increasing by 6.2% and gross profit margin expanding by 208 basis points to 32.8%. This margin expansion was driven by higher initial inventory markups, favorable markdowns, and a shift in sales mix towards higher-margin non-consumable products. Operating profit saw a modest increase of 4.9% to $908.9 million, and net income rose by 4.2% to $677.7 million, resulting in diluted earnings per share of $2.82, up from $2.56 in the prior year period. The company continues to execute its long-term operating priorities, including investing in store growth with plans to open approximately 1,050 new stores and remodel 1,750 stores in fiscal year 2021. Strategic initiatives such as DG Fresh, pOpshelf, and the non-consumables initiative (NCI) are progressing, aimed at enhancing assortment, improving efficiency, and driving profitable sales growth. While cash flow from operations decreased significantly compared to the prior year, driven by changes in inventory and accounts payable timing, the company maintained a strong liquidity position with $1.25 billion in borrowing availability under its revolving credit facility and a substantial share repurchase program in place, repurchasing $1.0 billion of common stock in the quarter.
Financial Highlights
44 data points| Revenue | $8.40B |
| Cost of Revenue | $5.65B |
| Gross Profit | $2.76B |
| SG&A Expenses | $1.85B |
| Operating Income | $908.85M |
| Interest Expense | $40.39M |
| Net Income | $677.75M |
| EPS (Basic) | $2.84 |
| EPS (Diluted) | $2.82 |
| Shares Outstanding (Basic) | 238.55M |
| Shares Outstanding (Diluted) | 240.30M |
Key Highlights
- 1Net sales slightly declined by 0.6% to $8.4 billion, with same-store sales down 4.6%, primarily due to reduced customer traffic.
- 2Gross profit margin improved significantly, increasing by 208 basis points to 32.8%, driven by higher inventory markups and a favorable shift in sales mix towards non-consumables.
- 3Operating profit increased by 4.9% to $908.9 million, and net income grew by 4.2% to $677.7 million ($2.82 per diluted share).
- 4The company continued its aggressive store expansion strategy, planning to open approximately 1,050 new stores and remodel 1,750 stores in fiscal year 2021.
- 5Significant progress was made on strategic initiatives like DG Fresh, pOpshelf, and NCI, aimed at enhancing product offerings and operational efficiencies.
- 6Cash flow from operating activities decreased substantially to $0.70 billion from $1.74 billion in the prior year period, largely due to changes in working capital.
- 7Dollar General returned substantial capital to shareholders through $1.0 billion in share repurchases and $99.8 million in dividends during the quarter.