
The company said that same-store sales rose 4% in the third quarter, compared with a 6.3% gain in 2011.
The company’s CEO said:
Although our performance over the Thanksgiving weekend and start of the holiday season has been encouraging, we continue to be cautious for the remainder of the year. We are facing a significant same-store sales comparison from our 2011 fourth quarter, which included very strong January sales, growing near-term pressures that are impacting our customers’ confidence and spending, and a challenging competitive environment.
Regarding Dollar General’s outlook, the company said it now expects full-year adjusted EPS of $2.82 to $2.85, slightly below the consensus estimate of $2.86. Same-store sales for the fourth quarter are expected to rise by 3% to 4%. For the full fiscal year, the company expects same-store sales to rise 4.5% to 5%, based on a 52-week year. Total sales are expected to rise 10% to 10.5% on a 52-week basis.
Gross profit was virtually flat, at 30.9% in the third quarter compared with 31% in the same period a year ago. Positive factors included higher inventory markups and an $11 million inventory charge in 2011 that was not repeated this year. Weighing on gross profit were higher markdowns, a smaller impact from price increases and an increase in the sales of consumables. Operating profit rose from 8.6% a year ago to 9.1% in the 2012 third quarter.
Consumables make up about three-quarters of Dollar General’s revenues, and the problems that the store mentions related to gross profits need to be addressed more effectively than the company has done so far.
Shares are up about 0.7% in premarket, trading this morning at $46.88, in a 52-week range of $39.83 to $56.04. Thomson Reuters had a consensus analyst price target of $60.00 before today’s results were announced.
Paul Ausick
Take Charge of Your Retirement In Just A Few Minutes (Sponsor)
Retirement planning doesn’t have to feel overwhelming. The key is finding expert guidance—and SmartAsset’s simple quiz makes it easier than ever for you to connect with a vetted financial advisor.
Here’s how it works:
- Answer a Few Simple Questions. Tell us a bit about your goals and preferences—it only takes a few minutes!
- Get Matched with Vetted Advisors Our smart tool matches you with up to three pre-screened, vetted advisors who serve your area and are held to a fiduciary standard to act in your best interests. Click here to begin
- Choose Your Fit Review their profiles, schedule an introductory call (or meet in person), and select the advisor who feel is right for you.
Why wait? Start building the retirement you’ve always dreamed of. Click here to get started today!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.