Latest news with #ProjectRenovate
Yahoo
5 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
5 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
