Dollar General’s net sales climb by 17% in the fiscal third quarter

Dollar General’s net sales climb by 17% in the fiscal third quarter
Written by:
Wajeeh Khan
December 3, 2020
  • Dollar General’s net sales climb by 17% in the fiscal third quarter.
  • The chain of variety stores reports £427.10 million of profit in Q3.
  • Dollar General says same-store sales are 14% up in Q4 to date.

Dollar General Corp. (NYSE: DG) said on Thursday that its profit and net sales in the fiscal third quarter came in better than expected on the back of a significant increase in same-store sales.

Dollar General shares had tumbled to as low as £102 per share in late-March when the COVID-19 crisis pushed its stores into temporarily shutting down. Currently, the stock has a per-share price of £161.53 that represents a 40% growth year to date in the stock market – a good news for value investors.

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Dollar General’s Q3 financial results versus analysts’ estimates

Dollar General said that its profit in the third quarter printed at £427.10 million. In the same quarter last year, it had posted a much lower £271.89 million of profit. In the quarter that concluded on 30th October, the chain of variety stores earned £1.72 per share versus the year-ago figure of £1.06 per share.

According to FactSet, Dollar General’s profit in the recent quarter was better than what analysts had anticipated. It published its quarterly financial report only weeks after Dollar Tree said its net income climbed to £247.63 million in the fiscal third quarter.

The American company said that it generated £6.10 billion worth of net sales in Q3 that represents a 17% growth on a year over year basis. FactSet Consensus for Dollar General’s net sales in the third quarter stood at a lower £6.05 billion. The U.S. chain said last month that it expanded investment in frontline bonuses by 40%.

Other prominent figures in Dollar General’s earnings report

Other prominent figures in the Goodlettsville-based company’s earnings report on Thursday include a 12.2% annualised growth in comparable-store sales in the recent quarter. From 31st October to 1st December, Dollar General added, its same-store sales were up 14% on a year over year basis.

According to Dollar General, customer traffic remained weighed due to the ongoing Coronavirus pandemic in the third quarter, but the average transaction amount was bigger, resulting in an increase in comparable-store sales. Dollar General said:

“The company believes consumer behaviour driven by COVID-19 had a significant positive effect on net sales and same-store sales.”

Dollar General performed largely upbeat in the stock market last year with an annual gain of roughly 45%. At the time of writing, it is valued at £40.29 billion and has a price to earnings ratio of 23.63.