US' Dollar General's sales rise 9% in Q2FY22

Same-store sales increased 4.6 per cent compared to the second quarter of 2021, driven primarily by an increase in average transaction amount, as well as a slight increase in customer traffic. Same-store sales in the second quarter of 2022 included growth in the consumables category, partially offset by declines in each of the apparel, seasonal, and home products categories, the company said in a press release.

Gross profit as a percentage of net sales was 32.3 per cent in the second quarter of 2022 compared to 31.6 per cent in the second quarter of 2021, an increase of 69 basis points. This gross profit rate increase was primarily attributable to higher inventory markups; partially offset by an increased LIFO provision, which was driven higher by product costs; a greater proportion of sales coming from the consumables category, which generally has a lower gross profit rate than other product categories; and increases in markdowns, transportation costs, distribution costs, and inventory damages.

“We are pleased with our second quarter results, and I want to thank our associates for delivering another quarter of strong performance during a period of inflation and economic uncertainty,” said Todd Vasos, Dollar General’s chief executive officer. “The quarter was highlighted by same-store sales growth of 4.6 per cent, a slight increase in customer traffic, accelerated growth in market share of highly consumable product sales, and double-digit growth in EPS.”

“During the quarter, we also made significant progress advancing our operating priorities and strategic initiatives, further enhancing our unique value and convenience proposition. Looking ahead, we are confident that our strategic actions, which have transformed this company in recent years and solidified Dollar General as the clear leader in small-box discount retail, have positioned us well for continued success, while supporting long-term shareholder value creation,” explained Vasos.

The company expects net sales growth of approximately 11 per cent, including an estimated benefit of approximately two percentage points from the 53^rd week; compared to its previous expectation of approximately 10.0 per cent - 10.5 per cent, including an estimated benefit of approximately two percentage points from the 53^rd week; and same-store sales growth of approximately 4.0 per cent - 4.5 per cent; compared to its previous expectation of approximately 3.0 per cent - 3.5 per cent.

Fibre2Fashion News Desk (RR)