Is the Reopening Trade Leaving This Major Retailer Behind?

By Chris Lange Published Mar 18, 10:36AM EDT

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Is the Reopening Trade Leaving This Major Retailer Behind? — © Justin Sullivan / Getty Images

Dollar General Corp. (NYSE: DG | DG Price Prediction) was one of the last retailers to report earnings for the fiscal first quarter, and while most retailers seemingly have recovered, this variety store chain is lagging. The prospect of the reopening trade appears to have been lifting all boats, but this has not been so for Dollar General. Note that the stock is currently lower than where it was last April, at the height of the pandemic panic.

The discount retailer said that it had $2.62 in earnings per share (EPS) on $8.4 billion in revenue, while consensus estimates had called for $2.72 in EPS on revenue of $8.3 billion. The same period of last year reportedly had EPS of $2.10 and $7.16 billion in revenue.

The net sales increase of 17.6% included positive sales contributions from new stores and growth in same-store sales. Same-store sales increased 12.7% year over year, driven by an increase in average transaction amount, partially offset by a decline in customer traffic. Same-store sales increased in each of the consumables, seasonal, home products and apparel categories, with the largest percentage increase in the home products category.

The company believes consumer behavior driven by COVID-19 had a significant positive effect on net sales and same-store sales. However, Dollar General issued guidance that was not very impressive.

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Looking ahead to the 2022 fiscal full year, the company expects to see net sales in the range of a 2% decline to flat, same-store sales declining 4% to 6% and EPS in the range of $8.80 to $9.50. Consensus estimates call for $10.08 in EPS on $34.09 in revenue for the full fiscal year.

Excluding Thursday’s move, Dollar General stock had underperformed the broad markets with a decline of about 11% year to date. In the past 52 weeks, the share price was up closer to 21%.

Dollar General stock traded down 5% to $177.68 on Thursday, in a 52-week range of $135.04 to $225.25. The consensus price target is $238.68.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.