Dollar General Results, Buybacks Boosting Shares

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Dollar General Corp. (NYSE: DG) reported fourth-quarter and fiscal 2012 results before markets opened this morning.

The discount retailer reported diluted earnings per share (EPS) of $0.97 on revenues of $4.21 billion for the quarter. In the same period a year ago, Dollar General reported EPS of $0.85 on revenue of $4.19 billion. Fourth-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.90 and $4.26 billion in revenue.

For the full year, adjusted EPS totaled $2.91 on revenues of $16.02 billion, compared with the consensus estimates for EPS of $2.85 on revenues of $16.07 billion.

The company said that same-store sales rose 3% in the fourth quarter, primarily driven by increased sales of consumables.

The company’s CEO said:

We grew our market share and invested strategically to continue to win with our customers. These results demonstrate the strength of our business strategy, and we believe we are very well-positioned for future growth.

Regarding Dollar General’s outlook, the company said it expects fiscal 2013 sales to rise by 10% to 12%, with same-store sales up 4% to 6%. Operating profit is forecast in a range of $1.78 to $1.845 billion, compared with operating profit of $1.49 billion in 2012.

Yearly gross profit was flat, at 31.7% . Positive factors included higher inventory markups and a lower provision for inventory. Weighing on gross profit were higher markdowns, a smaller impact from price increases and a reduction in shrinkage. Operating profit rose from 10.1% in 2011 to 10.3% in in 2012.

Dollar General repurchased $671 million in its own stock in 2012 and boosted its buyback program by $500 million last week. The company now has $644 million available for share repurchases.

Shares are up about 2.7% in premarket trading this morning at $51.40, in a 52-week range of $39.73 to $56.04. Thomson Reuters had a consensus analyst price target of $53.20 before today’s results were announced.