A big shift to consumables purchasing at Dollar General led to lower-than-expected second-quarter sales and earnings.
A Yahoo Finance-published analyst consensus estimate called for earnings per diluted share of $2.46 and revenues of $9.92 billion.
Comparable sales slipped 0.1% in the quarter year over year, the company maintained. A decline in customer traffic, partially offset by an increase in average transaction amount, resulted in the comp decrease.
Net sales increased 3.9% to $9.8 billion versus the year-earlier quarter. Positive sales contributions from new stores helped the increase along but they were partially offset by the decline in same-store sales and the impact of store closures. By category, Dollar General reported declines in home merchandise sales, down 7.7%, seasonal, down 1%, and apparel, down 7.1%, offset by growth in consumables, up 6%. Operating profit was $692.3 million versus $913.4 million in the year-prior period.
“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 CEO, in announcing the financial results. “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. We are pleased with the advancements we have made, and we are now taking further actions and making additional investments to accelerate our progress and ultimately serve our customers even better. While these investments will pressure our 2023 results, we believe they will further strengthen our foundation as we move into 2024 and focus on driving sustainable growth and creating long-term shareholder value.”
