On June 7, Dollar General
• Sales increased a meager 5.8%, while profits plunged nearly 27%, thanks to markdowns. Management is still attempting to adjust its excess inventory supply from the fourth quarter 2006 and first quarter 2007.
• The rise in SG&A expenses contributed to the decrease in expenses from the operating and net margin, such as lease contract termination costs, incremental store labor, and costs related to closing 153 stores in the first quarter.
• While the gross margin improved, the cost of goods sold rose 5%.
• Dollar General earns a lonely one-star rating out of a possible five in the Motley Fool CAPS community. Come share your take on the discount retailer (and competitor Dollar Tree
(Figures in millions, except per-share data.)
Income Statement Highlights
|
Q1 2007 |
Q1 2006 |
Change |
|
|---|---|---|---|
|
Sales |
$2,275.3 |
$2,151.4 |
5.8% |
|
Net Profit |
$34.9 |
$47.7 |
(26.8%) |
|
EPS |
$0.11 |
$0.15 |
(26.7%) |
|
Diluted Shares |
315.9 |
315.2 |
0.2% |
Get back to basics with the income statement.
Margin Checkup
|
Q1 2007 |
Q1 2006 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
27.8% |
27.2% |
0.7 |
|
Operating Margin |
2.4% |
3.8% |
(1.4) |
|
Net Margin |
1.5% |
2.2% |
(0.7) |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$231.8 |
$90.7 |
155.6% |
|
Inventory |
$1,444.3 |
$1,636.1 |
(11.7%) |
|
Liabilities |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$484.9 |
$569.4 |
(14.8%) |
|
Long-Term Debt |
$260.4 |
$333.5 |
(21.9%) |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
Q1 2007 |
Q1 2006 |
Change |
|
|---|---|---|---|
|
Cash From Ops. |
$29.3 |
($16.1) |
N/A |
|
Capital Expenditures |
$34.1 |
$77.1 |
(55.8%) |
|
Free Cash Flow |
($4.8) |
($93.2) |
N/A |
Free cash flow is a Fool's best friend.
Related Foolishness:
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