Net Sales Rise, Same-Store Sales Flat at Dollar General in Q2
Dollar General has shared its Q2 fiscal results in which net sales increased by same-store sales stayed virtually flat.
For the 13-week period ended Aug. 4, net sales increased 3.9% to $9.8 billion compared to $9.4 billion in the second quarter of 2022. Dollar General cited the sales growth as driven by positive sales contributions from new stores. Gross profit as a percentage of net sales was 31.1% in the second quarter of 2023 compared to 32.3% in the second quarter of 2022, a decrease of 126 basis points. Dollar General attributed this to lower inventory markups and increased shrink, markdowns and inventory damages.
Same-store sales decreased 0.1% compared to the first quarter of 2022, driven by a decline in customer traffic, partially offset by an increase in average transaction amount. Same-store sales in the second quarter of 2023 included declines in each of the home, seasonal, and apparel categories, partially offset by growth in the consumables category, which Dollar General recently expanded private label options in. Consumables saw a 6.0% increase in sales YoY in the quarter.
For Q2, Dollar General reported net income of $468.8 million, a decrease of 30.9% compared to $678.0 million in the second quarter of 2022. As of Aug. 4, 2023, total merchandise inventories, at cost, were $7.5 billion compared to $6.9 billion as of July 29, 2022, an increase of 3.4% on a per-store basis. Operating profit for the second quarter of 2023 decreased 24.2% to $692.3 million compared to $913.4 million in the same quarter last year.
“While we are not satisfied with our overall financial results, we made significant progress in the second quarter improving execution in our supply chain and our stores, as well as reducing our inventory growth rate and further strengthening our price position,” said Jeff Owen, Dollar General’s CEO. “These actions were an important driver of improving customer traffic trends and growing total market share in the second quarter. In addition, we executed nearly 850 real estate projects during the quarter, further extending our reach and expanding our ability to serve both new and existing customers.”
Looking ahead, the retailer expects net sales growth in the range of 1.3% to 3.3% for the full fiscal year, compared to its previous expectation of 3.5% to 5.0%. Same-store sales growth in the range of a decline of approximately 1.0% to growth of 1.0%, compared to its previous expectation of growth in the range of 1.0% to 2.0%.
Dollar General operates 19,488 Dollar General, DG Market, DGX and pOpshelf stores across the United States and Mi Súper Dollar General stores in Mexico.