Dollar General Beats Profits on Rising Grocery Sales


Discount retailer Dollar General beat second-quarter profit estimates and raised its sales outlook for the rest of the year as bargain-hunting shoppers increasingly flocked to the growing chain of products groceries and other consumables.

The company posted earnings per share of $2.98, up 10.8% from a year ago and beating Wall Street estimates of $2.39. DG’s revenue rose 9% year-over-year for the quarter ending July to $9.4 billion, matching analysts’ estimates polled by Refinitiv.

A customer shops at a Dollar General store in Vallejo, California on March 17, 2022. (Justin Sullivan/Getty Images/Getty Images)

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CEO DOLLAR GENERAL CORP. 246.04 -1.54 -0.62%

“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,” Dollar General CEO Todd said Thursday. Vasos, in a statement announcing the results. “The quarter was marked by same-store sales growth of 4.6%, a slight increase in customer traffic, accelerated market share growth in highly consumable products sales and double-digit EPS growth. ”

The company maintained its profit forecast for the rest of the year.

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Consumers under inflation pressure are increasingly buying basic necessities like groceries and gas and have less money in their budget for items like clothing and household items. As sales remain strong in the retail sector, several companies — like Target and Dollar Tree — are cutting their profit outlook by lowering prices to unload excess merchandise.

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Dollar General has over 18,000 locations in 47 states. (Paul Weaver/SOPA Images/LightRocket via Getty Images/Getty Images)

Dollar General’s strong quarter shows the company has positioned itself well against competitors in the discount space as retailers navigate soaring prices while competing to deliver value to cash-strapped customers .

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The company’s decision to offer more groceries has made it more attractive as a one-stop shop, as high gas prices drive more consumers to travel less.

Data firm Placer.ai reported that Dollar General’s introduction of groceries in 2019 helped drive foot traffic to the chain and made the company a strong contender in the grocery category.

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Dollar General’s decision to offer more groceries has made it more attractive as a one-stop shop, as high gas prices drive more consumers to travel less. (Luke Sharrett/Bloomberg via Getty Images/Getty Images)

Ethan Chernofsky, vice president of marketing at Placer.ai, says data shows Walmart is dominating the foot traffic market share. As the largest retailer in the country, it has fluctuated between 67% and 70% in visit share for the month of July since 2019.

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But Dollar General is gaining traction, increasing its share of foot traffic from around 7.5% to nearly 10% over the past three years.

“It’s not a blow to Walmart,” Chernofsky told FOX Business. “It’s just [shows the] a real growing power within the retail space that is Dollar General. »

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