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Dollar General Beats on Revenue and EPS for Q4, Boosts Dividend

By Eric Volkman - Mar 12, 2020 at 5:14PM

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The company saw increased foot traffic, and higher sales in all product categories.

Dollar General (DG 1.25%) stock fell nearly 10% in trading Thursday -- in line with the broader market's decline -- despite a fiscal fourth-quarter report that featured some quite encouraging results.

For the quarter, which ended Jan. 31, the discount retailer's net sales rose by 7.6% year-over-year to land at $7.16 billion. That was on the back of same-store sales that rose by 3.2%. Net income came in 11% higher at $535 million, or $2.10 per diluted share. 

Employee in a Dollar General store.

Image source: Dollar General

Both headline figures beat the average analyst estimates. Prognosticators had collectively been forecasting a top line of $7.15 billion, and a net profit of $2.01 per share. They had also modeled only a 2.8% rise in same-store sales.

Dollar General attributed the improvements to factors such as increased foot traffic in its stores, higher average spending per transaction, and new store openings. The company said that sales in all four of its product categories (consumables, apparel, home, and seasonal) rose during the quarter.

For its fiscal 2020, Dollar General is guiding for annual net sales growth of 7.5% to 8%, and per-share earnings to rise by around 11.5% (10% on a non-GAAP basis). It forecasts same-store sales will increase by 2.5% to 3%.

Along with its results, Dollar General announced a  12.5% increase in its quarterly dividend to $0.36 per share. It will be paid on or before April 21 to stockholders of record as of April 7. At Thursday's closing stock price, the new payout yields slightly over 1%. Although it is not particularly renowned as a dividend stock, Dollar General has made distributions consistently in recent years.

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