Dollar General

  • Dollar   General, the discount general merchandise retailer, posted a weaker-than   expected set of financial results for the fourth   quarter of 2021. However, the company hiked the dividend   31% and provided positive guidance which saw the stock gain in   post-announcement trade.

  • Net sales for the period rose 2.8% to $8.7 billion, primarily thanks   to positive sales contributions from new stores. Sales were impacted by store   closures as well as by a decline in same-store sales. Same-store sales   decreased 1.4% y/y due to lower customer traffic which was partially offset   by higher average spending per basket.

  • The Gross profit margin fell to 31.2% in Q4 2021 from 32.5% in Q4 2020   as result of higher transportation and distribution costs, increased product   prices, and more lower margin sales. These costs were partially offset by   price increases and fewer discounts.

  • Higher expenses in the form of retail labour and store occupancy costs   were offset by lower hurricane-related expenses, a reduction in incentive   compensation, and lower incremental costs related to Covid-19. This left   expenses flat year-over-year.

  • Dollar General reported a net income decrease of 7% to $597.4   million for Q4 2021. Diluted EPS decreased 1.9% to $2.57. The company   repurchased $2.5 billion of its common stock for the full year, at an average   price of $211.45 per share, and has $2.1 billion in authorized share purchase   capacity remaining. The board declared a quarterly cash dividend of $0.55 per   share.

  • Dollar General expects net sales growth of approximately 10%   (including 2% from the 53rd week) for fiscal 2022. It also sees same-store   sales growing around 2.5%, with diluted EPS growth in a range between 12% and   14% (including 4% from the 53rd week).

Dollar General