Dollar General Dips on Guidance

Still, fourth-quarter earnings and sales are solid.
By Nat Worden ,

Dollar General

(DG) - Get Report

beat expectations with its fourth-quarter earnings report Thursday, posting a 31% profit on strong sales, but its outlook for the first quarter disappointed.

The discount retailer's net income rose to $133.9 million, or 41 cents a share, from $102.3 million, or 30 cents, in the same quarter last year. Analysts were expecting earnings of 39 cents a share, according to consensus estimates reported by Thomson First Call.

Its sales rose 12% for the quarter, compared with last year, to $2.2 billion, while same-store sales, or sales at stores open at least a year, rose 3%. Its gross profit ticked up to 30% of sales, from last year's 29.3%.

For the first quarter of 2005, Dollar General forecast first-quarter earnings of 21 cents to 22 cents a share, which was lower than Wall Street's estimate of 23 cents a share. For all of 2005, the discounter expects to earn $1.14 to $1.19 a share, including an expected charge of about 1 cent from expensing stock options. On average, analysts are expecting earnings of $1.16 a share.

In 2004, its earnings grew to $344.2 million, or $1.04 a share, up from $300.5 million, or 89 cents a share. Net sales added 11% to reach $7.66 billion from $6.87 billion last year.

During the year, the company repurchased about 11 million shares of its common stock for $209.3 million. It was recently operating a total of 7,320 stores.

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