Dollar General on Tuesday reported a $444.1 million profit for its fiscal first quarter ended May 1, a 13% increase from $391.9 million a year earlier that surpassed Wall Street expectations. The Goodlettsville, Tennessee-based discount retailer logged revenue of $10.79 billion — up 3.4% from the same period last year and narrowly ahead of the $10.81 billion analysts had modeled — as consumers across income levels continued turning to its stores for low-cost essentials in a still-uncertain economic environment.
Chief Executive Todd Vasos attributed the results to strong margin expansion during the quarter, which he said more than offset the impact of severe winter weather and higher fuel costs. “Looking ahead, we believe the essential nature of our offering and our expansive footprint position us well to navigate the current macroeconomic environment,” Vasos added.
The company’s comparable sales, which account for store openings and closings, rose 2% in the quarter, matching analyst expectations and reflecting growth in both customer traffic and average transaction size. Dollar General recorded gains across all four of its major product categories: consumables, seasonal merchandise, apparel, and home products. New store openings outpaced store closures during the period, contributing to the top-line increase.
On a per-share basis, quarterly earnings of $2 topped the $1.89 that analysts polled by FactSet had expected. For the full fiscal year, Dollar General said it now expects earnings of $7.20 to $7.45 per share, up from an earlier forecast of $7.10 to $7.35. Analysts had been looking for $7.23. The company continues to anticipate comparable-sales growth of 2.2% to 2.7% and net sales growth of 3.7% to 4.2% for the year.
The report comes after rival Dollar Tree last week said its value proposition continues to resonate with customers across all income levels, boosting profit and revenue in its latest quarter and giving the company confidence to raise its own outlook for the year.