Home merchandise helped Dollar General make financial gains in Q2 and post a Wall Street beat.
An analyst consensus estimate from Zacks Investment Research forecast earnings per diluted share of $1.56 and revenues of $10.68 billion.
Comparable sales increased 2.8% year over year in the quarter based on a 1.5% advance in customer traffic and a 1.2% gain in average transaction amount, the company stated. The consumables, seasonal, home products and apparel categories all saw comp increases.
Net sales were $10.73 billion versus $10.21 billion in the year-past quarter. Operating profit increased to $595.4 million from $550 million in the year-previous period.
During a conference call, Dollar General reported that the home products category experienced its most significant comparable store sales (comps) increase in more than four years. Regarding tariffs, the company noted that it had brought in a significant amount of inventory early to avoid duty increases and was implementing strategies to mitigate the impact of rate increases on incoming inventory, particularly for seasonal merchandise.
Dollar General raised its full-year guidance to net sales growth of 4.3% to 4.8% versus the previous expectation of 3.7% to 4.7%, comp growth of 2.1% to 2.6% versus the previous expectation of 1.5% to 2.5%, and diluted EPS of $5.80 to $6.30 versus the previous expectation of $5.20 to $5.80.
“We are pleased with our strong second-quarter results, including earnings growth that significantly exceeded our expectations,” said Todd Vasos, Dollar General CEO, in announcing the financial results. “Our improved execution, along with our progress advancing key initiatives, is resonating with both existing and new customers as we further enhance our value and convenience proposition. Looking ahead, we believe we have ample opportunity to drive growth and further improve our operating and financial performance, as we continue to work toward achieving the goals laid out in our long-term financial framework.”
