Seasonal, consumables propel sales for Dollar General in Q1

Home Textiles Today Staff -- Home Textiles Today, 6/8/2010 11:32:15 AM

Goodlettsville, Tenn. - Seasonal and consumable goods helped propel strong net sales and comp results during Dollar General Corp.'s first quarter.

"Dollar General's first0quarter performance marks a great start to the year," said Rick Dreiling, chairman and ceo. "Our first-quarter sales were ahead of our expectations."

For the 13-week period, ended April 30, sales increased 11.9% to $3.11 billion compared to $2.78 billion in the year-ago period. And same-store sales increased 6.7% in addition to a 13.3% increase in last year's first quarter.

The company said customer traffic and average transaction amount contributed to the same-store sales gains, and sales were strongest in the consumables and seasonal categories.

Net income was $136.0 million, or diluted earnings per share of $0.39, compared to net income of $83.0 million, or diluted EPS of 26 cents, in the first quarter of fiscal 2009. Excluding items totaling approximately $15.0 million relating to a secondary offering of the company's common stock by certain existing shareholders during the 2010 first quarter, adjusted net income increased 75% to $145.4 million, or 42 cents per diluted share.

Looking ahead, Dreiling said Dollar General's "strong first-quarter results, coupled with our consistent track record, give us confidence to raise our full-year outlook for 2010."

Dollar General, which operates 8,965 stores in 35 states, said it continues to expect total sales for the 2010 fiscal year to increase 8% to 10%, including an increase in same-store sales of 4% to 6%. Adjusted operating profit is expected to increase 18% to 22% over full year 2009 adjusted operating profit, as compared to the company's previous guidance of 15% to 20%.

Adjusted diluted earnings per share for the year are now expected to be $1.62 to $1.69, up from $1.55 to $1.63 previously forecasted, based on weighted average diluted shares of 345 million, and a full year 2010 tax rate in the range of 38% to 39%. The calculations of adjusted operating profit and adjusted diluted earnings per share exclude costs related to common stock offerings that have occurred in the relevant periods and the early retirement of long-term obligations, as applicable.

The company plans to open about 600 new stores and to remodel or relocate a total of approximately 500 stores in 2010.