Dollar General Corporation (
) reported financial results for its fiscal 2011 third quarter
ended October 28, 2011 early Monday morning. Shares of Dollar
General are trading up 1.1 percent to $56.85 just minutes after the
Sales increased 11.5 percent from the same quarter last year to
$3.60 billion, just topping the Street consensus of $3.57 billion.
Same-store sales increased 6.3 percent, better than the the 4.2
percent reported in the year-ago quarter.
Cost of goods sold totaled $2.48 billion and accounted for 68.96
percent of total sales, relatively flat on a year-over-year
Gross profit fell 40 basis points to 31 percent, while operating
profit rose 13 percent to $311 million, or 8.6 percent of total
Net income was $171 million, or $0.50 per share diluted, compared
to net income of $128 million, or diluted EPS of $0.37 in the third
quarter of fiscal 2010. Earnings per share exceeded the Street's
consensus of $0.47 per share.
The company ended the quarter with $118.58 million in total cash
and cash equivalents, well below the $497.44 million in the
beginning of the year.
"Dollar General delivered another great quarter, and we expect to
continue to build upon our strong track record of delivering
excellent results for our shareholders," said Rick Dreiling,
chairman and chief executive officer. "Our same-store sales
increased 6.3 percent in the third quarter, representing our third
consecutive quarter of accelerating same-store sales growth and
demonstrating our ability to balance the challenges of pricing and
rising input costs."
The company also announced a $500 million buyback program.
For full year 2011, Dollar General's outlook calls for adjusted
diluted earnings per share in the range of $2.29 to $2.32 based on
345 million weighted average diluted shares, assuming $185 million
of share repurchases in the fourth quarter. The company had
previously FY11 EPS to $2.20-$2.30. The Street is estimating
earnings of $2.29 per share for the fiscal year 2011 on $3.57
billion in total sales. Dollar General's guidance also calls for
total sales for the full year will increase by 13 percent while
same-store sales are expected to increase by 5.6-5.8 percent.
Management reported plans to open approximately 625 new stores in
fiscal year 2011 and another 625 stores in fiscal year 2012.
Mr. Dreiling commented, "For the holiday season and into 2012, we
expect our customers to remain very interested in value and in ways
to make their dollars go further. November sales were strong. Our
Thanksgiving week and Black Friday sales suggest that we are well
positioned to meet our customers' expectations."
An analyst at Deutsche Bank said the third-quarter upside was
largely driven by strong same-store sales results and slightly
lower-than-expected interest expense and tax rate. The analyst
believes shares will continue to remain range bound following the
release, but also said Dollar General's third-quarter results "bode
well for Family Dollar (
) and Dollar Tree (Nasdaq: DLTR)."