Summary
Dollar General Corporation (DG) reported a 6.8% increase in net sales to $9.34 billion for the first quarter of fiscal year 2023, compared to the same period last year. This growth was primarily driven by a 1.6% increase in same-store sales and the addition of new stores. Despite the sales increase, net income declined by 6.9% to $514.4 million, or $2.34 per diluted share, down from $552.7 million, or $2.41 per diluted share, in the prior year. This decrease in profitability was attributed to higher selling, general, and administrative expenses, particularly in retail labor and repairs, as well as increased interest expenses due to higher borrowings and interest rates. The company experienced a significant decrease in cash generated from operating activities, down 57.5% to $191.1 million, largely due to increased inventory purchases as the company continues its supply chain recovery efforts and faces product cost inflation. Dollar General maintained its dividend payment of $0.59 per share and did not repurchase any shares during the quarter, aligning with its strategy to preserve its investment-grade credit rating and financial flexibility. The company also provided an updated outlook for store growth, planning to open approximately 990 new stores in the U.S. and up to 20 stores in Mexico, alongside significant remodel and relocation plans.
Financial Highlights
45 data points| Revenue | $9.34B |
| Cost of Revenue | $6.39B |
| Gross Profit | $2.96B |
| SG&A Expenses | $2.21B |
| Operating Income | $740.86M |
| Interest Expense | $83.04M |
| Net Income | $514.38M |
| EPS (Basic) | $2.35 |
| EPS (Diluted) | $2.34 |
| Shares Outstanding (Basic) | 219.19M |
| Shares Outstanding (Diluted) | 220.11M |
Key Highlights
- 1Net sales increased by 6.8% to $9.34 billion, driven by same-store sales growth of 1.6% and new store openings.
- 2Diluted earnings per share decreased to $2.34 from $2.41 in the prior year's first quarter.
- 3Gross profit margin improved by 34 basis points to 31.6%, primarily due to higher inventory markups and decreased transportation costs, though partially offset by increased shrink and damages.
- 4Selling, general, and administrative (SG&A) expenses increased as a percentage of net sales by 94 basis points to 23.7%, largely due to higher retail labor and repairs/maintenance costs.
- 5Cash flow from operations significantly decreased by 57.5% to $191.1 million, mainly due to increased inventory purchases.
- 6The company declared a quarterly dividend of $0.59 per share and made no share repurchases during the quarter, focusing on financial flexibility.
- 7Dollar General plans to open approximately 990 new stores in the U.S. and up to 20 stores in Mexico in fiscal year 2023.