Dollar General Q3 Comps Soften As Net Income Drops
Third quarter net sales at Dollar General were up more than 2%, but the company reported declines in same-store sales and net income for the three month period ended November 3.
Net sales increased 2.4% to $9.7 billion in the third quarter of 2023 compared to $9.5 billion in the third quarter of 2022. The net sales increase was primarily driven by positive sales contributions from new stores, partially offset by the decline in same-store sales and the impact of store closures.
Same-store sales decreased 1.3% compared to the third quarter of 2022, driven by a decline in average transaction amount, partially offset by an increase in customer traffic. Same-store sales in the third quarter of 2023 included declines in each of the home, seasonal, apparel, and consumable categories.
Net income in the quarter was $276.2 million, a decrease of 47.5% compared to net income of $526.2 million in the third quarter of 2022. Diluted earnings per share decreased 45.9% to $1.26 for the third quarter of 2023 compared to diluted earnings per share of $2.33 in the third quarter of 2022.
“While we are not satisfied with our financial results for the third quarter, including a significant headwind from inventory shrink, we are pleased with the momentum in some of the underlying sales trends, including positive customer traffic, as well as market share gains in both dollars and units,” said Todd Vasos, Dollar General’s CEO. “We continue to believe our model is relevant in all economic cycles, and we are working diligently to further enhance our unique combination of value and convenience.”
Vasos, who recently returned as the retailer’s chief executive, said he has spent the past several weeks reviewing all areas of the company’s business. As a result of that effort, Dollar General has identified opportunities for improvement for the near and long term.
“Moving forward, our entire team is laser focused and moving with urgency to take the actions we have identified to drive operational excellence for our customers and employees,” he added.
The retailer also unveiled its 2024 real estate growth plans that include approximately 2,385 projects. In the coming fiscal year, Dollar General said it will open 800 new stores, complete 1,500 remodels, and execute 85 relocations.
“This is a modest slow down compared to the number of projects in recent years, which we believe is prudent in this environment,” said Vasos. “We are excited about the opportunities these projects provide to serve both new and existing customers, while also driving strong financial returns for the business and laying the foundation for future growth.”
