Dollar General Q1 sales up 8.8%
GOODLETTSVILLE, Tenn. — Dollar General on Tuesday reported net sales of $4.9 billion for the 13 weeks ended May 1, up 8.8%.
“In the first quarter, we made solid progress implementing our key initiatives with balanced growth across both consumables and non-consumable categories," stated Rick Dreiling, chairman and CEO of Dollar General. "Compared to the first quarter of 2014, same-store sales improved 3.7% and gross margin expanded by 45 basis points, contributing to diluted EPS growth of 17%. Looking ahead, we are confirming our full year guidance based on our results for the first quarter,” he said. “Dollar General is well-positioned to win with our customers as we continue to invest in growing our business. We are executing on our plan to deliver increased value to our shareholders by capitalizing on growth opportunities and returning capital to our shareholders through share repurchases and anticipated regular quarterly dividends.”
This will be the last quarterly call directed by Dreiling, as Dollar General promoted Todd Vasos from COO to CEO effective June 3. Dreiling will remain on the board for the remainder of his term and will serve as senior advisor and chairman of the board through January 29, 2016.
The company’s net income was $253 million, or $0.84 per diluted share, in the 2015 first quarter, compared to net income of $222 million, or $0.72 per diluted share, in the 2014 first quarter.
Same-store sales increases were balanced across both consumable and non-consumable categories. In consumables, a higher volume of tobacco products, perishables, health care items and candy and snacks drove the growth in same-store sales. Same-store sales growth within non-consumables was strongest in apparel with seasonal and home also posting solid gains.
Gross profit, as a percentage of sales, was 30.5% in the 2015 first quarter, an increase of 45 basis points from the 2014 first quarter. The majority of the gross profit rate increase was due to higher initial inventory markups, an improved inventory shrink rate and lower transportation costs.
Total additions to property and equipment in the 2015 first quarter were $100 million, including: $30 million for improvements, upgrades, remodels and relocations of existing stores; $27 million related to new leased stores, primarily for leasehold improvements, fixtures and equipment; $24 million for distribution and transportation-related capital expenditures; $10 million for stores built by the Company; and $8 million for information systems upgrades and technology-related projects. During the 2015 first quarter, the company opened 219 new stores.
For the 2015 fiscal year, the company expects total sales to increase 8% to 9% over the 2014 fiscal year, with same-store sales expected to increase 3% to 3.5%.
Capital expenditures are expected to be in the range of $500 million to $550 million in 2015. Dollar General plans to open approximately 730 new stores in 2015, or 6% square footage growth, and relocate or remodel 875 stores. To date, the company is on track with its pipeline development to accelerate new store openings to 7% square footage growth in 2016.