Dollar(DG) - 2025 Q3 - Quarterly Results

Third Quarter 2024 Financial Results Q3 2024 Performance Highlights Dollar General's Q3 2024 net sales grew 5.0% to $10.2 billion with 1.3% same-store sales growth, yet operating profit declined 25.3% and diluted EPS fell 29.4% to $0.89, impacted by hurricane expenses Q3 2024 Key Financial Metrics | Metric | Q3 2024 | Change vs. Q3 2023 | | :--- | :--- | :--- | | Net Sales | $10.2 Billion | +5.0% | | Same-Store Sales | +1.3% | - | | Operating Profit | $323.8 Million | -25.3% | | Diluted EPS | $0.89 | -29.4% | | Cash Flows From Operations (YTD) | $2.2 Billion | +52.2% | - Same-store sales growth of 1.3% was composed of a 1.1% increase in average transaction amount and a 0.3% increase in customer traffic[4] - Sales growth was driven by the consumables category, while the home, seasonal, and apparel categories experienced declines[4] - CEO Todd Vasos noted that despite a financially constrained core customer, the company's "Back to Basics" efforts helped improve execution and the in-store customer experience[3] Detailed Financial Analysis Gross profit margin contracted 18 basis points to 28.8% due to markdowns and consumables mix, while SG&A rose 111 basis points to 25.7% of sales, leading to a 25.3% operating profit decline to $323.8 million - Gross profit rate decreased by 18 basis points, attributed to increased markdowns, higher inventory damages, and a greater proportion of sales from consumables, partially offset by higher inventory markups and lower shrink and transportation costs[5] - SG&A expenses increased as a percentage of sales, primarily due to $32.7 million in hurricane-related costs, retail labor, and depreciation[6] Q3 2024 Profitability vs. Q3 2023 | Metric | Q3 2024 | Q3 2023 | % Change | | :--- | :--- | :--- | :--- | | Operating Profit | $323.8 M | $433.5 M | -25.3% | | Net Income | $196.5 M | $276.2 M | -28.9% | | Diluted EPS | $0.89 | $1.26 | -29.4% | Balance Sheet and Shareholder Returns As of November 1, 2024, merchandise inventories decreased 7.0% per store to $7.1 billion, year-to-date capital expenditures reached $1.0 billion, and a $0.59 per share dividend was declared with no Q3 share repurchases - Total merchandise inventories decreased to $7.1 billion, representing a 7.0% reduction on a per-store basis compared to the previous year[10] - Year-to-date capital expenditures totaled $1.0 billion, with significant investments in store improvements ($451M), distribution projects ($288M), and new store facilities ($259M)[11] - The company did not repurchase any shares in Q3 2024, with $1.4 billion remaining under the current authorization[12] - A quarterly cash dividend of $0.59 per share was declared by the Board of Directors[14] Outlook and Future Plans Fiscal Year 2024 Financial Guidance (Updated) Dollar General updated its FY2024 guidance, adjusting net sales growth to 4.8%-5.1% and diluted EPS to $5.50-$5.90, incorporating hurricane expenses while maintaining capital expenditure plans - Updated guidance includes the negative impact of $32.7 million in Q3 hurricane-related expenses and an estimated $10 million impact in Q4[15] Updated FY 2024 Guidance | Metric | Previous Guidance | Updated Guidance | | :--- | :--- | :--- | | Net Sales Growth | 4.7% to 5.3% | 4.8% to 5.1% | | Same-Store Sales Growth | 1.0% to 1.6% | 1.1% to 1.4% | | Diluted EPS | $5.50 to $6.20 | $5.50 to $5.90 | - The company maintains its expectation for $1.3 billion to $1.4 billion in capital expenditures and 2,435 real estate projects (730 new stores, 1,620 remodels, 85 relocations) for fiscal 2024[16] Fiscal Year 2025 Real Estate and Growth Plan For FY2025, Dollar General plans approximately 4,885 real estate projects, including 575 new U.S. stores, 2,000 full remodels, and 2,250 "Project Elevate" lighter-touch remodels to enhance customer experience - The company is introducing "Project Elevate," a new remodel initiative targeting mature stores with lighter-touch updates to enhance the customer and associate experience[17] FY 2025 Real Estate Project Plans | Project Type | Planned Number | | :--- | :--- | | New Store Openings (U.S.) | ~575 | | New Store Openings (Mexico) | up to 15 | | Full Remodels | ~2,000 | | Project Elevate Remodels | ~2,250 | | Store Relocations | ~45 | | Total Projects | ~4,885 | Financial Statements Condensed Consolidated Balance Sheets As of November 1, 2024, total assets increased to $31.5 billion, merchandise inventories decreased to $7.1 billion, total liabilities remained stable at $24.1 billion, and shareholders' equity grew to $7.3 billion Key Balance Sheet Items (in thousands) | Account | Nov 1, 2024 | Nov 3, 2023 | | :--- | :--- | :--- | | Merchandise Inventories | $7,118,974 | $7,356,065 | | Total Current Assets | $8,176,516 | $8,271,078 | | Total Assets | $31,460,415 | $30,624,626 | | Total Liabilities | $24,117,830 | $24,172,742 | | Total Shareholders' Equity | $7,342,585 | $6,451,884 | Consolidated Statements of Income Q3 2024 net sales rose to $10.2 billion, but increased COGS and SG&A led to operating profit declining to $323.8 million and net income falling to $196.5 million Q3 Income Statement Summary (in thousands) | Account | Q3 2024 (13 weeks) | Q3 2023 (13 weeks) | | :--- | :--- | :--- | | Net Sales | $10,183,428 | $9,694,082 | | Gross Profit | $2,936,300 | $2,812,528 | | Operating Profit | $323,802 | $433,474 | | Net Income | $196,529 | $276,246 | Year-to-Date Income Statement Summary (in thousands) | Account | YTD 2024 (39 weeks) | YTD 2023 (39 weeks) | | :--- | :--- | :--- | | Net Sales | $30,307,810 | $28,833,095 | | Gross Profit | $8,987,928 | $8,812,688 | | Operating Profit | $1,419,868 | $1,866,646 | | Net Income | $934,036 | $1,259,461 | Consolidated Statements of Cash Flows Year-to-date net cash from operations significantly increased to $2.2 billion, while investing activities used $1.0 billion and financing activities used $1.2 billion, primarily for debt and dividends Year-to-Date Cash Flow Summary (in thousands) | Activity | YTD 2024 (39 weeks) | YTD 2023 (39 weeks) | | :--- | :--- | :--- | | Net Cash from Operating Activities | $2,195,163 | $1,442,019 | | Net Cash used in Investing Activities | ($1,034,970) | ($1,235,544) | | Net Cash used in Financing Activities | ($1,160,219) | ($222,604) | | Net (Decrease) in Cash | ($26) | ($16,129) | Selected Additional Information Q3 2024 sales saw Consumables grow 6.4% while other categories declined, and the company expanded its store count to 20,523 with a net addition of 537 new stores year-to-date Q3 2024 Sales by Category (% Change YoY) | Category | % Change | | :--- | :--- | | Consumables | +6.4% | | Seasonal | 0.0% | | Home products | -2.3% | | Apparel | -1.2% | | Total Net Sales | +5.0% | Store Activity (39 Weeks Ended Nov 1, 2024) | Activity | Number | | :--- | :--- | | Beginning Store Count | 19,986 | | New Store Openings | 617 | | Store Closings | (80) | | Ending Store Count | 20,523 | Other Information Forward-Looking Statements This section cautions that forward-looking statements regarding the company's outlook and plans are subject to numerous risks and uncertainties, including economic factors and competitive pressures, which could cause actual results to differ materially - The report contains forward-looking statements regarding the company's outlook, strategy, initiatives, and plans, which are not guarantees of future performance[19] - A wide range of important factors could cause actual results to differ, including economic conditions (inflation, interest rates), failure to execute strategies, competitive pressures, supply chain disruptions, and inventory shrinkage[19][20] About Dollar General Corporation Dollar General, operating 20,523 stores across the U.S. and Mexico as of November 1, 2024, positions itself as "America's neighborhood general store" with a mission of "Serving Others" by offering essential products - As of November 1, 2024, the company operates 20,523 stores, including Dollar General, DG Market, DGX, pOpshelf, and Mi Súper Dollar General formats[23] - The company's mission is "Serving Others" by providing affordable products, career opportunities, and community support[23]