Dollar General (ticker: DG) said it earned $642.7 million, or $2.62 a share, up from $2.10 in the year-ago period. Revenue rose 17.6% to $8.41 billion. Analysts were looking for per-share earnings of $2.72 billion on revenue of $8.29 billion.
Same-store sales climbed 12.7%, while analysts expected an 11.5% rise. The board of directors authorized a new $2 billion share repurchase program and boosted its quarterly dividend to 42 cents a share from 36 cents.
For the full year, Dollar General expects to earn between $8.80 and $9.50 a share, on revenue that will be flat to down 2% year over year, to about $33.1 billion to $33.8 billion. Consensus calls for EPS of $10.04 and revenue of $34.1 billion.
Dollar General shares fell 4.8% to $178.50 in Thursday morning trading. The shares have slipped nearly 11% year to date, after rising more than 31% in the past year.
The earnings miss was a disappointment, although investors are likely more concerned about the company’s outlook. Dollar General is one of the first retailers to face difficult year-over-year comparisons from the pandemic, and while the outlook may prove conservative, it won’t calm investors who worry that some Covid winners will have trouble holding on to their gains.
Given its focus on lower- and middle-class consumers, Dollar General will likely see a bump from the latest round of stimulus, although that will be a temporary boost. But an improving economy may reduce some consumers’ need to trade down to the discounter.
Write to Teresa Rivas at firstname.lastname@example.org