How Dollar General Earnings Are Pushing the Stock to New Highs

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Dollar General Corp. (NYSE: DG) reported its fiscal third-quarter financial results before the markets opened on Thursday. While shares have pulled back since, they briefly hit a 52-week high — almost an all-time high.

The company said that it had $0.98 in earnings per share (EPS) on $5.9 billion in revenue, which compares with consensus estimates from Thomson Reuters of $0.94 in EPS on revenue of $5.8 billion. In the same period of last year, the retailer said it had EPS of $0.89 and $5.32 billion in revenue.

During the quarter, same-store sales increased 4.3%, driven by increases in average transaction amount and customer traffic. This same-store sales increase was attributable to positive results in the consumables, seasonal and apparel categories, partially offset by negative results in the home products category.

In terms of guidance for the fiscal full year, management expects to see EPS in the range of $4.37 to $4.47 and net sales growing of roughly 7%, with same-store sales of roughly 2.5%. The consensus estimates are $4.51 in EPS and $23.4 billion in revenue for the full year.

On the books, Dollar General’s cash and cash equivalents totaled $226.2 million at the end of the quarter, up from $200.2 million at the end of the same period last year.

Todd Vasos, Dollar General’s CEO, commented:

We remain excited about the future for Dollar General. For fiscal 2018, we have plans to execute approximately 2,000 real estate projects comprised of 900 new stores, 1,000 store remodels and 100 store relocations. We continue to believe that investing in the business through our high-return new store growth is the best use of our capital to help drive long-term shareholder value. Our new store growth is complemented with a significant increase in our store remodel program from fiscal 2017 that we view as an investment to enhance and consistently deliver on our brand promise to help our customers save time and money every day.

Shares of Dollar General were last seen up about 2% at $92.71, with a consensus analyst price target of $86.29 and a 52-week range of $65.97 to $96.35.