Dollar General looks to expand in 2022

Tennessee-based discount retailer Dollar General announced its Q3 2021 results on Thursday, reporting good results as the year winds down, with net sales increasing 3.9%. Dollar General CEO Todd Vasos said the company was optimistic about its $1 price point compared to competitors despite economic challenges.

“We are pleased with our third quarter results, and I want to thank our associates for their unwavering commitment to meeting the needs of our customers, communities, and each other,” said Vasos. “During the quarter, we made meaningful progress advancing our key initiatives, while continuing to successfully deliver for our customers, despite a challenging operating environment.”

Net sales increased 3.9% to $8.5 billion in the quarter compared to $8.2 billion in the Q3 of 2020, driven by new stores, which partially offset the decline in same-store sales. Same-store sales decreased 0.6% compared to the third quarter of 2020, driven by a decline in customer traffic, partially offset by an increase in average transaction amount.

Gross profit as a percentage of net sales was 30.8% in the quarter compared to 31.3% in the third quarter of 2020, a decrease of 57 basis points. Selling, general and administrative expenses (“SG&A”) as a percentage of net sales were 22.9% in the third quarter of 2021 compared to 21.9% in the third quarter of 2020, an increase of 105 basis points. Operating profit decreased 13.9% to $665.6 million compared to $773.1 million in the same quarter the year before.

Dollar General shared its plans for 2022 in the call as well, citing new stores and international expansion in the coming year.

“We are excited today to announce our real estate growth plans for fiscal year 2022, which consist of nearly 3,000 real estate projects in total, including 1,110 new stores,” added Vasos. “These plans include the acceleration of our pOpshelf store concept, as we expect to nearly triple our store count next year. Importantly, given the sustained and positive performance of our pOpshelf concept, we plan to further accelerate the pace of new store openings as we move ahead, targeting a total of approximately 1,000 pOpshelf locations by fiscal year end 2025. We are also excited to announce our plans to expand our footprint internationally for the first time, with plans to open up to ten stores in Mexico by the end of fiscal 2022, as we continue to lay the foundation for future growth.”