Dollar General Q3 Profit Beats Consensus; Revises FY13 Targets - Quick Facts

(RTTNews) - Discount retailer Dollar General Corp. (DG) announced higher third-quarter net income of $237.3 million, or $0.74 per share, versus $208 million, or $0.62 per share, in the prior-year period. Adjusted net income amounted to $231 million, or $0.72 per share, in the latest quarter. On average, 26 analysts polled by Thomson Reuters expected earnings per share of $0.70 for the quarter. Analysts' estimates typically exclude one-time items. Net profit in the 2013 third quarter includes a benefit of $6 million, or about $0.02 per share, resulting from the reversal of income tax reserves that were established in 2009, the company said.

The firm clocked net sales of $4.38 billion in the quarter, up 10.5 percent, versus $3.96 billion in the 2012 third quarter, while 24 analysts estimated revenues of $4.42 billion. Same-store sales rose 4.4 percent, with increases in both customer traffic and average transaction value.

The company said consumables sales continued to grow at a higher rate than non-consumables in the 2013 third quarter, with the most significant rise due to strong sales of tobacco products, perishables and candy and snacks. Same-store sales growth was solid in seasonal and home products, whilst apparel sales were hurt by a planned merchandising initiative that reduced apparel inventories in over 4,000 stores in the 2013 third quarter.

Looking ahead to fiscal 2013, the firm updated its outlook, by now anticipating adjusted earnings per share to be around $3.18 - $3.22, reflecting an increase to the low end of its prior guidance of $3.15 - $3.22. Total net sales for the 2013 fiscal year are now expected to increase by 10.0 - 10.5 percent over the 2012 fiscal year, including an expected increase in same-store sales of 4.0 - 4.5 percent. The earlier guidance reflected an increase in total net sales of 10.0 - 11.0 percent and same-store sales increase of 4.0 - 5.0 percent. Analysts project annual earnings per share of $3.22 and revenue of $17.74 billion.

Further, Dollar General intends to open nearly 700 new stores in fiscal 2014 and remodel or relocate some 525 stores, expanding store selling square footage by 6 to 7 percent.