Dollar General sees 3Q profit gain
January 28, 2002,
GOODLETTSVILLE, TN — Third-quarter profits at Dollar General Corp. edged up by 2.3 percent, to $46.7 million from $45.7 million last year, as the neighborhood discount chain whittled down its interest expense by more than 15 percent, generating a cash savings of $2.1 million.
Average gross margin held steady at 29.1 percent, but tugging at the bottom line were operating costs, which climbed higher by 130 basis points, to 22.5 percent from 21.2 percent a year ago.
For the nine months year-to-date, profits rose by 7.1 percent, to $110.1 million from $102.8 million. Driven by continued expansion, sales shot up by 20.2 percent, to $3.7 billion from $3.1 billion last year. Same-store sales rose strongly, by 7.1 percent.
Following a major accounting flap, Dollar General reduced its earnings for the period from 1998 to 2000 by $0.30 a share, more than four times the amount it had previously forecast. Last year, when it announced the accounting irregularities, saying it had incorrectly accounted for some leases and tax liabilities, the chain projected it would have to reduce earnings by about $0.07 a share.
Additionally, Dollar General has taken a $162 million charge to settle lawsuits related to the accounting snafu. In September, the retailer fired its auditor, Deloitte & Touche, and has since engaged Ernst & Young.
Cal Turner, ceo, said, "This ship faltered when I was at the helm, but it has been righted."
Dollar General Corp.
|Qtr. 11/2/01 (x000)||2001||2000a||% CHG|
|a-Financial results have been restated following a re-audit of results for the years 2000 and 1999, which resulted in reduction in earnings for the period 1998 to 2000 by 30 cents a share.|
|Oper. income (EBIT)||86,078||86,411||-0.4|
|Per share (diluted)||0.14||0.14||0.0|
|Average gross margin||29.1%||29.1%||—|
|Oper. income (EBIT)||210,727||199,539||5.6|
|Per share (diluted)||0.33||0.31||6.5|
|Average gross margin||27.7%||28.0%||—|