Dollar General Investigates Accounting, Will Restate Earnings
Dollar General (DG), the small-town discount retail chain, is examining accounting irregularities and possible fraudulent behavior on its books for fiscal 1998 and 1999. As a result, the company this morning said it will restate 1998 and 1999 earnings, causing a delay in the reporting of its first-quarter and fiscal 2000 earnings.
According to Dollar's preliminary investigation, the company said it will trim 7 cents a share from its total $1.81 in earnings over the last three years. In a press release, the company said "management's preliminary investigation reflects the possibility of a material adverse affect on the previously announced earnings for fiscal 1998 and 1999." Meanwhile, the company's restated fiscal 2000 earnings will experience a "minor positive effect," but no specifics were given in the release.
"In the investigative process, the Company and the audit committee are reviewing allegations of fraudulent behavior in connection with certain of the accounting irregularities and are reviewing the Company's internal accounting controls and financial reporting processes," Dollar General said in a press release this morning.
Dollar General has been telling Wall Street a growth story for the last three years. It was recently off 24.6% to $18 in preopen trading. Its 52-week price history ranges from a low of $13.43 to a high of $24.05."This action is unprecedented in the history of our company and is certainly regrettable. I am confident that our investigation of these matters will result in a thorough review of our previously release financial statements for each period," chairman and CEO Cal Turner, Jr. said in the release.
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