Dollar General raises full-year sales outlook after strong Q2

Dollar General reported a strong second quarter with top-and-bottom-line growth, raising its full-year sales outlook, as it withstood inflation challenges and economic uncertainty.

The discounter also updated its plans for real estate projects for the fiscal year 2022, citing ongoing delays in permitting and the delay of construction materials related to new store openings. It now expects to execute 1,010 to 1,060 new stores, approximately 1,795 remodels and about 125 store relocations. Previously, the company’s plans called for expansion to 1,110 new stores, 1,750 remodels, and 120 store relocations. 

[Read More: Dollar General appoints new president, chief financial officer]

Dollar General reported a net income of $678 million, with earnings per share of $2.98, for the quarter ended July 29, compared to $637 million, and $2.69 a share, in the year-ago quarter. Analysts had expected earnings per share of $2.94.

Sales increased 9% to $9.4 billion. Same-store sales rose 4.6%, driven primarily by an increase in average transaction amount, as well as a slight increase in customer traffic. The chain said growth in the consumables category was partially offset by declines in each of the apparel, seasonal, and home products categories.

During the second quarter, the company opened 227 new stores, remodeled 533 stores and relocated 30 stores.  In July, Dollar General announced plans to build three new distribution centers.

[Read More: Dollar General to break ground on 3 new distribution centers]

"We are pleased with our second quarter results, and I want to thank our associates for delivering another quarter of strong performance during a period of inflation and economic uncertainty," stated CEO Todd Vasos. “Looking ahead, we are confident that our strategic actions, which have transformed this company in recent years and solidified Dollar General as the clear leader in small-box discount retail, have positioned us well for continued success, while supporting long-term shareholder value creation.”

Dollar General raised its full-year sales guidance. It now expects full-year sales to rise about 11%, compared with its prior guidance of 10% to 10.5%. It sees same-store sales up 4% to 4.5%, compared with its previous guidance of 3% to 3.5%. The company still sees full-year earnings per share growth of 12% to 14%.

This story originally appeared on Chain Store Age.