Dollar General Posts Q2 Success
Cecile Corral -- Home Textiles Today, September 28, 2009
Neighborhood discounter Dollar General Corp. enjoyed some notable successes during its second quarter, with triple-digit increases in net income, double-digit increases in net sales and pronounced increases in comp store sales.
For the 13-week period ended July 31, net income at the 8,577-store retailer shot up by 237.7% to $93.6 million from $27.7 million in the year-ago quarter. (The privately-held company did not report per-share information.)
Q2 sales of $2.90 billion were up 11.2% from $2.61 billion in the same period of 2008. Same-store sales rose 8.6% for the period, on top of a comp gain of 10.1% a year ago.
For the 26-week year-to-date period, net income spiked by 425.1% to $176.6 million over last year's $33.6 million. Sales were up 13.3% to $5.68 billion, with a 10.8% same-store sales boost.
On Aug.20, the company filed a registration statement on Form S-1 with the United States Securities and Exchange Commission relating to a possible initial public offering of its common stock. The registration statement has not been declared effective by the SEC. As a result, Dollar General is legally restricted in its ability to discuss its business, and could not host a conference call to discuss its quarterly results in more detail.
Instead, chairman and ceo Rick Dreiling offered this statement: "Our financial results continue to reflect our customers' positive response to the changes we are making in our stores and are evidence of our ability to grow. As always, we remain focused on offering convenience and value through a combination of convenient store locations, a time-saving shopping experience and everyday low prices on quality national and private brand selections of basic merchandise."
Looking ahead, Dollar General said it "remains committed" to continuing its focus on productive sales growth, increasing gross margins — which averaged 31.2% during Q2, a rise of 217 basis points — and leveraging process improvements and information technology to reduce costs. The company expects capital expenditures of $300 million to $325 million for the full 2009 fiscal year, and plans to open about 500 new stores and remodel or relocate 450 units.