Dollar General's first-quarter fiscal 2014 earnings missed the
Zacks Consensus Estimate but rose 1.4% year-over-year buoyed by the
Consumables category. Net sales climbed 6.8% but fell short of the
Zacks' expectation as unfavorable weather conditions, stiff
competition and cautious consumer spending impacted the top-line.
Comparable-store sales also grew in the quarter driven by higher
traffic and average transaction count. The comps have displayed an
upward trajectory for the past 24 years defying unfavorable
macroeconomic trends. Further, Dollar General's initiatives as
regards to management of expense, inventory, merchandise and
operations are likely to push sales north. However, we believe
margins are likely to remain under pressure due to an increase in
the sales of lower margin carrying consumables items, and soft
sales of discretionary products. Currently, we stay Neutral on the
Founded in 1939 and headquartered in Goodlettsville, Tennessee,
Dollar General Corporation is one of the largest discount retailers
in the United States. The company trades in low priced merchandise
typically $10 or less. As of May 2, 2014, Dollar General had 11,338
stores in 40 states. It offers general merchandise in four
categories namely Consumables, Seasonal, Home products and
The Consumables Category is the leading category (75% of net
sales for fiscal 2013) consisting of cleaning products, health
& beauty products, snacks, perishables, packaged food and pet
supplies and food.
The Seasonal Products Category (13% of net sales for fiscal
2013) consists of prepaid phones and accessories, small
electronics, batteries, toys, greeting cards, hardware,
decorations, automotive gardening supplies, stationery and home
The Home products Category (6% of net sales for fiscal 2013)
includes kitchen supplies, candles small appliances, light bulbs,
cookware, frames, craft supplies, bed & bath soft goods and
The Apparel Category (6% of net sales for fiscal 2013) consists
of casual daily wear for infants, children, girls, boys, women and
men, along with socks, intimate wear, disposable diapers,
accessories and shoes.
Dollar General Corporation (DG): Read the Full
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