Dollar General (DG) Q4 2024 earnings

Dollar General on Thursday reported fiscal fourth-quarter income that narrowly beat Wall Avenue estimates, whereas a retailer portfolio overview reduce into the chain’s revenue.

As a part of the reevaluation, the dollar-store chain mentioned it’s going to shut 96 Greenback Common shops and 45 Popshelf shops and can convert six different Popshelf shops into flagship banner places within the first quarter. Popshelf shops cater to higher-income shoppers looking for cheap merchandise.

On the corporate’s earnings name, CEO Todd Vasos warned consumers “solely come up with the money for for primary necessities” and that the macro surroundings is not possible to enhance this yr.

Shares of the corporate closed up practically 7% on Thursday.

Here is how the discounter did in contrast with what Wall Avenue was anticipating for the quarter ended Jan. 31, primarily based on a survey of analysts by LSEG:

• Earnings per share: 87 cents. That won’t examine with an estimate of $1.50.
• Income: $10.3 billion vs. $10.26 billion anticipated

Fourth-quarter income rose 4.5% from $9.86 billion throughout the identical quarter in 2023. Income for the complete yr got here in at $40.61 billion, up nearly 5% from $38.69 billion in 2023.

For fiscal 2025, the chain forecasts income to develop between 3.4% and 4.4%, whereas Wall Avenue was anticipating annual development of 4.1%, based on LSEG. Greenback Common expects earnings per share for the yr to come back in between $5.10 and $5.80, slightly below the $5.85 anticipated by analysts, based on LSEG.

Greenback Common reported fourth-quarter internet revenue of $191 million, or 87 cents per share, in contrast with internet revenue of $402 million, or $1.83 per share, throughout the identical quarter a yr prior.

The discounter mentioned its portfolio overview impacted earnings per share by 81 cents.

Working revenue for the quarter fell over 49% yr over yr to $294 million. The corporate attributed $232 million in fees to the shop closures from the portfolio overview in addition to Popshelf impairment fees.

“As we glance to construct on the substantial progress we made on our Again to Fundamentals work in fiscal 2024, we consider this overview was acceptable to additional strengthen the inspiration of our enterprise,” mentioned Vasos in a news release. “Whereas the variety of closings represents lower than one p.c of our general retailer base, we consider this choice higher positions us to serve our prospects and communities.”

Identical-store gross sales, which Greenback Common defines as income from shops open for at the very least 13 months, grew 1.2% yr over yr for the quarter. They’re anticipated to develop 1.2% to 2.2% for the approaching fiscal yr, the corporate mentioned.

Greenback Common announced in December that it was testing same-day supply for patrons. As inflation takes a toll on lower-income shoppers, greenback shops like Greenback Common and Dollar Tree have confronted elevated competition from retailers like Walmart with higher e-commerce presences.

In January, Greenback Common said it will start promoting about 100 new private-brand merchandise, most of which is able to fall below its Clover Valley label and consists of gadgets corresponding to honey mustard and cinnamon rolls, within the first quarter.