This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Dollar General Surges, Kroger Falls on Earnings Reports

Stocks in this article: DG KR

NEW YORK (TheStreet) -- Dollar General (DG) shares were surging 5% Thursday after the discount retailer reported third-quarter earnings that beat Wall Street expectations.

Dollar General said Thursday that profit rose 14% from the year-earlier period to $237 million, or 74 cents a share. Adjusted income rose 10% to $231 million, or 72 cents a share, 2 cents higher than consensus estimates for the quarter.

Same-store sales rose 4.4% in the quarter, fueled by increased traffic and average transaction value, while total sales rose 10.5% to $4.38 billion, the company said. The revenue number was lower than the $4.42 billion that analysts had expected, according to Thomson Reuters.

Dollar General noted that sales of tobacco, perishables and candy and snacks had the most significant growth. Same-store sales were also helped by seasonal and home products, while apparel sales were lower due to a "planned merchandising initiative that reduced apparel inventories in more than 4,000 stores" during the quarter.

The company also announced $200 million of share repurchases in the quarter and increased its buyback authorization by $1 billion.

The stock was surging 5.2% to $59.31 at last check. DG Chart
DG data by YCharts

"Dollar General once again delivered strong results in the third quarter, even in the face of an ongoing challenging consumer environment," said Rick Dreiling, Dollar General's chairman and CEO. "Our merchandising initiatives have continued to be successful in driving traffic and sales. We had solid financial performance across key metrics, including better than anticipated gross margin performance and solid SG&A leverage."

Dreiling said the company is forecasting full-year adjusted earnings per share between $3.18 and $3.22, 3 cents higher on the low end than previously stated. Analysts, according to Thomson Reuters, forecast earnings of $3.22 a share.

Same-store sales for the year are expected to rise 4% to 4.5%, narrowed from the 4% to 5% guidance the company previously provided. Total net sales for the year are expected to rise 10% to 10.5%, also narrowed from 10% to 11% as previously stated.

"Looking ahead, while we are cautious on the current macroeconomic trends, we remain excited about the long-term growth prospects for our business," Dreiling said.

The company also said that last month it signed an agreement to sell and subsequently lease back approximately 233 currently owned stores. The transaction is expected to close in January 2014 and result in net proceeds to the company of approximately $200 million, which it plans to use to repurchase stock.

Dollar General announced that it plans to open approximately 700 new stores next year and remodel or relocate approximately 525 stores in the new year.

Third-quarter earnings fell at supermarket giant Kroger (KR), which reported net income of $299 million, or 57 cents per share, down from a year earlier when it reported income of $317 million, or 60 cents a share.

The third quarter ended Nov. 9 included a 4-cent tax benefit as well as expenses equating to a penny per share related to its pending merger with Harris Teeter.

Last year's third quarter included a 14-cent per share benefit from a settlement with Visa and MasterCard and from a reduction in the company's obligation to pension funds.

Excluding these adjustments, earnings per share would have been 53 cents a share for the 2013 quarter and 46 cents a share in the third quarter of last year. Adjusted earnings were in line with analysts' expectations.

"Our quarterly results show once again that Kroger is uniquely positioned to grow and win in the U.S. food retail industry," said David B. Dillon, Kroger's chairman and CEO.

Total sales rose 3.2% to $22.5 billion in the quarter, missing analysts' expectations of $22.75 billion. Excluding fuel, total sales rose 4.7% in the third quarter from the same period last year.

Kroger maintained its adjusted earnings guidance range of $2.73 to $2.80 per diluted share for fiscal 2013.

For the fourth quarter of fiscal 2013, Kroger expects identical supermarket sales growth, excluding fuel, of approximately 3.0% to 3.5%.

Shares were falling 4.1% to $39.83 on Thursday.

-- Written by Laurie Kulikowski in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,959.44 +154.64 0.87%
S&P 500 2,078.54 +7.89 0.38%
NASDAQ 4,781.4240 +16.0440 0.34%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs