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Yahoo
2 days ago
- Business
- Yahoo
Dollar General Corp (DG) Q1 2025 Earnings Call Highlights: Strong Sales Growth Amid Challenges
Net Sales: Increased 5.3% to $10.4 billion in Q1. New Store Openings: 156 new stores opened during the quarter. Same-Store Sales: Increased 2.4% during the quarter. Gross Profit Margin: 31%, an increase of 78 basis points. Operating Profit: Increased 5.5% to $576 million. EPS: Increased 7.9% to $1.78. Cash Flow from Operations: $847 million, an increase of 27.6%. Merchandise Inventories: $6.6 billion, a decrease of 5% compared to prior year. Dividend Payment: $0.59 per common share, totaling $130 million. 2025 Financial Guidance: Net sales growth of 3.7% to 4.7%, same-store sales growth of 1.5% to 2.5%, EPS range of $5.20 to $5.80. Warning! GuruFocus has detected 7 Warning Sign with DG. Release Date: June 03, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Dollar General Corp (NYSE:DG) reported a 5.3% increase in net sales to $10.4 billion in Q1 2025, driven by the opening of 156 new stores. Same-store sales increased by 2.4%, with growth in both consumable and non-consumable product categories. The company achieved a gross profit margin increase of 78 basis points, attributed to lower shrink and higher inventory markups. Dollar General Corp (NYSE:DG) saw a 7.9% increase in EPS to $1.78, exceeding internal expectations. The company reported strong cash flow from operations, increasing by 27.6% to $847 million, and reduced merchandise inventories by 5%. Customer traffic slightly decreased by 0.3% during the quarter, despite strong sales growth. SG&A expenses increased by 77 basis points as a percentage of sales, driven by higher retail labor and incentive compensation costs. The company faces uncertainty due to the evolving tariff environment, which could impact consumer spending and cost of goods. Dollar General Corp (NYSE:DG) anticipates a significant headwind from incentive compensation expenses, particularly impacting Q2. The cost to build new stores has risen by more than 40% since 2019, impacting the company's return on investment for new store openings. Q: Can you discuss your confidence in sustaining top-line momentum and any surprises during the quarter? Also, how does the full-year guidance reflect your expectations? A: Todd Vasos, CEO, highlighted confidence in sustaining top-line momentum due to improvements in store standards, customer service, and reduced turnover. He noted that shrink mitigation and supply chain improvements have contributed positively. Kelly Dilts, CFO, added that the guidance considers Q1 outperformance but also accounts for uncertainty, allowing for potential consumer spending pressure. Q: How do you see traffic progressing through the year, and have there been any changes in consumer behavior? A: Todd Vasos, CEO, mentioned that traffic turned positive in May, and they are optimistic about continued comp momentum. He noted that trade-in activity from higher-income customers remains strong, and initiatives like Project Elevate and Renovate are expected to drive further growth. Q: Are there plans for further investments in price or wage rates to sustain comp momentum? A: Todd Vasos, CEO, stated that they are comfortable with current investments in labor and wage rates, which have improved store conditions and employee satisfaction. He emphasized that they feel well-positioned on everyday pricing and continue to invest in maintaining a $1 price point for many items. Q: How important is achieving a 3% comp for margin expansion, and can shrink benefits improve further? A: Todd Vasos, CEO, indicated that sustained comps over 2% are crucial for margin expansion, with a focus on non-consumable categories. Kelly Dilts, CFO, noted that shrink benefits exceeded expectations in Q1 and are expected to continue throughout the year, contributing positively to margins. Q: How is Dollar General addressing competition and potential price investments? A: Todd Vasos, CEO, mentioned that the competitive landscape is stable, and they feel well-positioned on pricing. He emphasized their ability to respond to competitive pressures if needed, supported by strong relationships with CPG partners. He also discussed focusing on new communities to reduce cannibalization and drive growth. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
Shrink down, margins up at Dollar General a year after removing nearly all self-checkout
This story was originally published on Retail Dive. To receive daily news and insights, subscribe to our free daily Retail Dive newsletter. A year after its move to take out most of its self-checkout, Dollar General reported that lower shrink and higher inventory markup were major factors in boosting Q1 gross margin by 78 basis points to 31%. Net income rose nearly 8% to $392 million. Net sales in the period rose 5.3% year over year to $10.4 billion. Despite a 0.3% traffic decline, comps rose 2.4%, thanks to a 2.7% bump in average transaction amount, the discounter said Tuesday. In Q1, Dollar General opened 156 stores, remodeled 668 as part of Project Elevate and 559 as part of Project Renovate. The company, which as of May 2 runs more than 20,000 locations, aims to overhaul 20% of its fleet each year, CEO Todd Vasos told analysts Tuesday. Plans for 2025 include opening about 575 stores in the U.S. and up to 15 in Mexico and remodeling about 4,250. Not long ago, shrink was an obsession of major retail industry groups and some major chains, though visibility into the issue has decreased since the National Retail Federation stopped publishing its shrink report. A year ago Vasos called shrink 'the most significant headwind in our business.' But on Tuesday, Dollar General Chief Financial Officer Kelly Dilts told analysts that improvement in shrink rates will be a tailwind throughout the year and that 'should be the gift that just keeps on giving here.' 'As we think about gross margin, we are just really pleased with where shrink came in,' she said. Major changes to Dollar General stores have entailed not just pulling self-checkout kiosks from stores but also improving layout, merchandising and staffing. 'Our store standards are much, much better than they've been in quite a long time, and every single quarter that goes by continues to get better and better,' Vasos said Tuesday. That is backed up by GlobalData channel checks, which found that fewer Dollar General locations suffer from inferior standards. 'While there are still some issues like cages and boxes cluttering up aisles, Dollar General seems to have minimized this issue with better scheduling and a modest investment in labor,' GlobalData Managing Director Neil Saunders said in emailed comments. Tariffs and the economy are likely to be the big challenges looming over Dollar General's performance, according to Saunders. Direct imports are 'a relatively small percentage' of Dollar General's business and tend to be in the mid- to high-single digit range of its overall purchases, with indirect imports varying, Vasos said. The company has diversified its supply chain — reducing its direct imports from China to less than 70% and indirect imports from China to less than 40% — and worked with vendors to share costs and found substitute merchandise where possible. However, raising some prices may be inevitable. 'While the tariff landscape remains dynamic and uncertain, we expect tariffs to result in some price increases as a last resort, though we intend to work to minimize them as much as possible,' Vasos said. 'In turn, we believe our customers will continue to seek opportunities to save money, and we remain committed to serving them with the everyday low prices they have come to know and appreciate from Dollar General.'
Yahoo
3 days ago
- Business
- Yahoo
Dollar General Q1 Earnings & Sales Beat Estimates, FY25 View Raised
Dollar General Corporation DG reported first-quarter fiscal 2025 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year. The company also raised its full-year General reported a strong start to the year, highlighted by solid same-store sales and earnings per share performance. The company saw market share gains across consumable and non-consumable categories, with growth from both core and trade-in customers. Quarterly earnings of $1.78 per share beat the Zacks Consensus Estimate of $1.47. The bottom line increased 7.9% from $1.65 in the prior-year period. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.) Dollar General Corporation price-consensus-eps-surprise-chart | Dollar General Corporation Quote Net sales of $10,436 million increased 5.3% year over year and surpassed the Zacks Consensus Estimate of $10,287 million. This increase was primarily driven by contributions from store openings and growth in same-store sales, though partially offset by the impact of store sales grew 2.4%, reflecting a 2.7% increase in average transaction amount, partially offset by a 0.3% decline in customer traffic. Growth was recorded across all major product categories, including consumables, seasonal items, home products and apparel. We anticipated same-store sales growth of 0.8% in the fiscal first quarter. For the quarter, net sales by category showed varied performance. The consumables category saw a significant increase of 5.2%, reaching $8.64 billion. Net sales for the seasonal category totaled $1.02 billion, an increase of 6.2% compared with the prior-year quarter. Home products sales grew 5.9% to $507.2 million and apparel saw an increase of 3.2%, reaching $269.2 gross margin expanded 78 basis points to 31%. This increase in the gross margin was due to higher inventory markups and lower shrinkage. These factors were partially offset by higher markdowns. We envisioned a 20-basis-point increase in the gross general and administrative expenses, as a percentage of net sales, increased 77 basis points to 25.4% in the quarter. The increase was primarily caused by higher retail labor, incentive compensation, repairs and maintenance. We anticipated 90 basis points of deleverage in SG&A operating profit increased 5.5% year over year to $576.1 million. We envisioned a 70-basis-point decrease in the operating margin. During the quarter, Dollar General opened 156 stores, remodeled 668 locations through Project Elevate and remodeled 559 stores through Project Renovate, and relocated 23 stores. In fiscal 2025, the company plans to execute 4,885 real estate projects, including the opening of 575 stores in the United States and up to 15 stores in Mexico. Additionally, the company aims to fully remodel 2,000 stores through Project Renovate, remodel 2,250 stores through Project Elevate and relocate 45 stores. This Goodlettsville, TN-based company ended the quarter with cash and cash equivalents of $850 million, long-term obligations of $5.72 billion and total shareholders' equity of $7.70 billion. Management incurred capital expenditures of $290.9 million during the fiscal first quarter. For fiscal 2025, the company anticipates capital expenditures in the band of $1.3-$1.4 billion. The company does not plan to repurchase shares in fiscal 2025. Dollar General now expects net sales growth of 3.7% to 4.7%, up from its prior outlook of 3.4% to 4.4%. Same-store sales are projected to increase 1.5% to 2.5%, slightly above the earlier range of approximately 1.2% to 2.2%. Earnings per share are anticipated to be between $5.20 and $5.80 compared with the previous estimate of approximately $5.10 to $ of this Zacks Rank #1 (Strong Buy) company have gained 34.1% in the past three months compared with the industry's growth of 3%. Image Source: Zacks Investment Research Urban Outfitters, Inc. URBN offers lifestyle products and services. It currently sports a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks Zacks Consensus Estimate for Urban Outfitters' current fiscal-year earnings and sales indicates growth of 20.9% and 8%, respectively, from the year-ago period's reported figures. URBN delivered a trailing four-quarter average earnings surprise of 29%.Sprouts Farmers Market, Inc. SFM engages in the retailing of fresh, natural and organic food products in the United States, flaunting a Zacks Rank #1. SFM delivered a trailing four-quarter earnings surprise of 16.5%, on Zacks Consensus Estimate for Sprouts Farmers Market's current fiscal-year earnings and sales indicates growth of 35.5% and 13.7%, respectively, from the year-ago period's reported Goose Holdings Inc. GOOS designs, manufactures and sells performance luxury apparel for men, women, youth, children and babies. It carries a Zacks Rank of 2 (Buy) at present. GOOS delivered a trailing four-quarter average earnings surprise of 57.2%.The Zacks Consensus Estimate for Canada Goose's current fiscal-year earnings and sales implies a decline of 10% and 2.9%, respectively, from the year-ago actuals. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dollar General Corporation (DG) : Free Stock Analysis Report Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report Canada Goose Holdings Inc. (GOOS) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Associated Press
25-03-2025
- Business
- Associated Press
Sappi North America CEO Michael Haws Named Mainebiz 2025 Business Leader of the Year
Sappi North America Inc., a leading producer and supplier of diversified paper, packaging products and pulp, today announces its President and CEO Michael 'Mike' Haws has been recognized as a Mainebiz 2025 Business Leader of the Year in the CEO of the Year category. The Mainebiz Business Leaders of the Year awards recognize executives across Maine's industries who have demonstrated outstanding leadership, innovation and commitment to economic growth in the state. The recognition highlights Haws' leadership in driving environmental innovation, workforce development and strategic investment, strengthening both Sappi's industry standing and its impact on Maine communities. Under Haws' leadership, Sappi North America continues to transform the pulp and paper industry through Project Elevate, a more than $400-million capital investment at the Somerset Mill. This initiative expands and converts Paper Machine No. 2 into a cutting-edge production line for fiber-based packaging, offering a renewable alternative to single-use plastics. Together with Sappi's broader environmental goals, Project Elevate positions the company as a leader in responsible manufacturing. 'Mike's leadership has been instrumental in Sappi's growth and transformation,' said Patti Groh, Director of Marketing and Corporate Communications, Sappi North America. 'His vision has not only strengthened our business but deepened our roots in Maine, where our mills and our people play such an important role in the local economy and community fabric.' Beyond capital investment, Haws has championed employee engagement, safety and recruitment. Under his guidance, Sappi has maintained its EcoVadis Platinum rating for the fifth consecutive year, placing it in the top 1% of organizations globally for sustainability. He has also prioritized modern workforce strategies—including digital outreach and co-op programs—to ensure a strong pipeline of talent for the future of manufacturing. 'I'm honored to be named a Mainebiz 2025 Business Leader of the Year,' said Haws. 'This award reflects the hard work and dedication of our entire Sappi team, who continue to push boundaries in both innovation and environmental stewardship.' With major operations in Skowhegan, Westbrook and Portland, Sappi North America remains a key contributor to the state's economy and a long-time supporter of Maine's forestry sector. The Somerset Mill, alone, supports nearly 1,000 direct jobs and thousands more across the supply chain—from loggers and truck drivers to local businesses. Through continued reinvestment and partnerships such as the Maine Forestry Program, Sappi is helping shape a resilient and sustainable future for the state. For more information about Sappi North America and its sustainability initiatives, visit About Sappi North America, Inc. Sappi North America, Inc., headquartered in Boston, is a market leader in converting wood fiber into superior products that customers demand worldwide. Our four diversified businesses – high-quality Graphic Papers, Dissolving Pulp, Packaging and Specialty Papers – deliver premium products and services with consistent quality and reliability. Our high-quality Coated Printing Papers are used for premium magazines, catalogs, books, direct mail and high-end print advertising. We are a leading manufacturer of Dissolving Pulp, which is used in a wide range of products, including textile fibers and household goods. We deliver sustainable Packaging and Specialty Papers for luxury packaging and folding carton applications with our single-ply packaging brands and for the food and label industries with our specialty papers. We are one of the world's leading suppliers of Casting and Release Papers with lines for the automotive, fashion and engineered films industries. Sappi North America is a subsidiary of Sappi Limited (JSE), a global company headquartered in Johannesburg, South Africa, with more than 12,000 employees and manufacturing operations on three continents in seven countries and customers in over 150 countries.
Yahoo
23-03-2025
- Business
- Yahoo
Prediction: Dollar General Will Beat the Market. Here's Why.
Dollar General (NYSE: DG) has been a laggard on the stock market in recent years as the company has lost market share to Walmart and struggled in an environment with weak consumer discretionary spending. Over the last three years, Dollar General's stock is down 63% while the broad market has surged. However, there are signs that Dollar General has hit rock bottom. 2024 was no doubt a rough year for the discount retailer as operating income plunged 30% in 2024 to $1.7 billion due to the economic challenges as well as increased markdowns, increased inventory damage, and an unfavorable shift in sales mix. The company's fourth-quarter earnings report last week was generally dismal as it badly missed bottom-line estimates, and its earnings-per-share (EPS) guidance was also below the consensus. In spite of that, the stock actually jumped 7% on the report as that EPS guidance still called for growth this year, and the company offered longer-term guidance that gave investors confidence that the company would return to steady growth. Additionally, Dollar General seems to have bucked the broader stock market sell-off during the recent correction as the stock is actually up 9% over the last month even as the S&P 500 is down roughly 10%. The retailer had already announced its "Back to Basics" plan, which includes a focus on improving out-of-stocks, making sure the checkout area is adequately staffed, and streamlining its supply chain by closing some temporary storage facilities. In its Q4 earnings report, Dollar General also shared a new real estate optimization plan, saying it planned to close 96 Dollar General stores and 45 Popshelf stores (its home goods sub brand), taking a charge of $232 million on the closures. Though that may sound like a setback for the company, closing underperforming stores should make the underlying business more profitable, and Dollar General still plans to aggressively open new stores. In 2025 it plans to open 575 new stores in the U.S. and 15 stores in Mexico in addition to remodeling 4,250 stores, including 2,250 under its Project Elevate program, which is designed to enhance the customer experience but is not a full remodel. The company also gave long-term guidance, saying it would grow same-store sales by 2% to 3% annually over the next five years and increase EPS by 10% annually starting next year. It also envisions returning to an adjusted operating margin of 6% to 7% by 2028 to 2029. If Dollar General can hit those numbers, the stock looks like an easy winner from here as the company trades at a price-to-earnings ratio of 16 currently, a substantial discount to the S&P 500. Despite the recovery plan, the macroeconomic landscape remains challenging, and management said it was not anticipating any improvement in the macroeconomic environment this year, "particularly for our core customer." Dollar General does face challenges, but the company has a long-term track record of delivering steady growth and dominates its niche in small-footprint discount retail. The company is the country's largest retail banner with more than 20,000 stores in the U.S., another testament to its success. Overall, Dollar General is a proven retail leader that's trading at a discount to the S&P 500, and its performance is already turning around as its guidance calling for 2025 earnings growth indicates. At a time when valuations are compressing, and investors are worried about an intensifying trade war, Dollar General's focus on necessities like groceries and its steady growth plan should make it a market-beater over the next five years. Before you buy stock in Dollar General, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Dollar General wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $726,481!* Now, it's worth noting Stock Advisor's total average return is 835% — a market-crushing outperformance compared to 164% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of March 18, 2025 Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool has a disclosure policy. Prediction: Dollar General Will Beat the Market. Here's Why. was originally published by The Motley Fool
