Dollar General (DG) reported earnings on Thur 29 Aug 19 (b/o)

• Dollar General owns more than 15,000 stores in over 44 states.

** charts after earnings **

 

Dollar General beats by $0.17, beats on revs; raises FY20 EPS, revenue, and comp guidance; Q2 comps +4%;

Reports Q2 (Jul) earnings of $1.74 per share, excluding non-recurring items, $0.17 better than the S&P Capital IQ Consensus of $1.57; revenues rose 8.4% year/year to $6.98 bln vs the $6.89 bln S&P Capital IQ Consensus.

Same-store sales increased 4.0% compared to the second quarter of 2018, driven by increases in both average transaction amount and customer traffic. Same-store sales in the second quarter of 2019 included growth in the consumables, seasonal, and home categories, partially offset by a decline in the apparel category.

Co issues guidance for FY20, sees EPS of $6.45-6.60 from $6.30-6.50, excluding non-recurring items, vs. $6.47 S&P Capital IQ Consensus; sees FY20 revs of +8% from +7% to $27.68 bln vs. $27.52 bln S&P Capital IQ Consensus. Co also sees same-store sales growth in the low-to-mid 3% range, compared to its previous expectation of approximately 2.5% Operating profit growth of approximately 5% to 7%, compared to its previous range of approximately 4% to 6%, which did not include the impact of the Significant Legal Expenses. Same-store sales growth in the low-to-mid 3% range, compared to its previous expectation of approximately 2.5%

The financial guidance includes the anticipated impact of the increased tariff rates on certain products imported from China, which became effective on May 10, 2019, the increase in tariff rates expected to become effective on October 1, 2019, and the additional tariffs expected to become effective on September 1, 2019 and December 15, 2019. The guidance also assumes that the Company can successfully mitigate, absorb, or otherwise offset the impact of these tariffs. The guidance does not contemplate any additional increases in tariff rates, any expansion of additional products subject to tariffs, or any tariff-related impacts to broader consumer spending.