Dollar General Provides Upbeat Outlook on FY 2013 (DG)
Discount retailer Dollar General Corp. (NYSE: DG) said on Monday that it anticipates robust sales growth in the current fiscal year as frugal consumers are expected to buy cheaper food and other basic items amid challenging macroeconomic environment.
Announcing its fiscal fourth quarter results, the Company reported better than expected earnings although sales growth was slightly disappointing for the investors.
For the fiscal fourth quarter ended February 1, the discount retailer reported a profit of $317.4 million or 97 cents a share compared to earnings of $292.5 million or 85 cents a share, in the same quarter of last year.
Sales during the quarter edged up 0.5% to $4.21 billion.
Analysts polled by Thomson Reuters were expecting earnings of 90 cents a share on sales of $4.26 billion.
Same-store-sales, a key gauge on retailer’s performance, climbed 3% in the fiscal fourth quarter. Earlier world’s largest discount retail chain, Wal-Mart Stores Inc. (NYSE: WMT) had reported same-store-sales growth of mere 1% for the fiscal fourth quarter.
The discount chain said more consumers visited its stores and spent more on items such as food, household wares and consumables.
Looking ahead at fiscal 2013, Dollar General anticipates non-GAAP earning to be in the range of $3.15 to $3.30 a share, assuming sales growth of 10% to 12% while same-store-sales are expected to rise by 4% to 6%.
Dollar General, which mainly sells merchandise below $10 tends to benefit when consumers constrained by budgets in the backdrop of macroeconomic uncertainty, slash spending. Lately rise in payroll taxes, increase in gasoline prices and lurking threat of federal government job cuts has taken a heavy toll on consumer spending, benefitting discount chains such as Dollar General.
For the fiscal 2012, total sales climbed 8.2% or 10.4% (after adjusting the impact of one extra sales week in fiscal 2011). Same-store-sales increased 4.7% in fiscal 2012.