Dollar General beats Q4 estimates, shares rise following improved execution

Investing.com -- Dollar General Corporation reported better-than-expected fourth quarter results on Thursday, as the discount retailer highlighted an improved execution. Shares rose 2.2% in early trading following the earnings release.

The company posted adjusted earnings per share of $1.68 for the quarter ended January 31, surpassing analyst estimates of $1.50. Revenue grew 4.5% YoY to $10.3 billion, slightly above the consensus forecast of $10.26 billion.

Same-store sales increased 1.2% in Q4, driven by a 2.3% rise in average transaction amount, partially offset by a 1.1% decline in customer traffic. The consumables category saw growth, while seasonal, home products, and apparel categories declined.

"We were pleased with the underlying performance of the business in the fourth quarter, including improved execution and solid top-line results," said CEO Todd Vasos. He noted that the company's "Back to Basics" initiatives are resonating with customers, as evidenced by higher satisfaction scores and market share gains.

For the full fiscal year 2024, Dollar General (NYSE:DG) reported net sales growth of 5% to $40.6 billion and same-store sales growth of 1.4%.

The retailer also announced plans to close 96 Dollar General stores and 45 pOpshelf stores in the first quarter of fiscal 2025 as part of a portfolio optimization review. This resulted in $232 million in charges for Q4, negatively impacting EPS by approximately $0.81.

Looking ahead, Dollar General provided fiscal 2025 guidance, projecting net sales growth of 3.4% to 4.4% and same-store sales growth of 1.2% to 2.2%. The company expects diluted EPS in the range of $5.10 to $5.80.