Summary
Dollar General Corporation (DG) reported its third-quarter results for the period ending October 29, 2021. The company saw a 3.9% increase in net sales to $8.52 billion, primarily driven by new store openings, though same-store sales saw a slight decrease of 0.6%. This decrease was attributed to lower customer traffic, partially offset by an increase in the average transaction amount due to higher retail prices. Profitability faced pressure, with operating profit declining 13.9% to $665.6 million and net income decreasing by 15.2% to $487.0 million, or $2.08 per diluted share. This decline was influenced by a lower gross profit margin (down 57 basis points) due to increased LIFO provision and transportation costs, as well as higher selling, general, and administrative expenses (up 105 basis points) related to labor and occupancy costs. Despite these pressures, the company continued its strategic initiatives, including store expansion and the "DG Fresh" and pOpshelf concepts, while also returning capital to shareholders through dividends and share repurchases.
Financial Highlights
44 data points| Revenue | $8.52B |
| Cost of Revenue | $5.90B |
| Gross Profit | $2.62B |
| SG&A Expenses | $1.95B |
| Operating Income | $665.59M |
| Interest Expense | $39.20M |
| Net Income | $487.03M |
| EPS (Basic) | $2.09 |
| EPS (Diluted) | $2.08 |
| Shares Outstanding (Basic) | 232.49M |
| Shares Outstanding (Diluted) | 234.03M |
Key Highlights
- 1Net sales increased by 3.9% to $8.52 billion, driven by new store growth, but same-store sales declined by 0.6%.
- 2Operating profit decreased by 13.9% to $665.6 million, reflecting pressure on margins and increased operating expenses.
- 3Net income fell by 15.2% to $487.0 million, resulting in diluted earnings per share of $2.08, down from $2.31 in the prior year period.
- 4Gross profit margin decreased by 57 basis points to 30.8%, impacted by higher LIFO provisions and transportation costs.
- 5SG&A expenses increased as a percentage of net sales by 105 basis points to 22.9%, mainly due to higher labor and occupancy costs.
- 6The company continued its aggressive share repurchase program, buying back approximately 9.9 million shares for $2.1 billion during the first 39 weeks of the fiscal year.
- 7Cash flow from operations was $2.23 billion for the first 39 weeks of the fiscal year, a decrease from the prior year, impacted by changes in working capital and lower net income.