GOODLETTSVILLE, Tenn. — Dollar General, which last month opened its 18,000th store, is tapping new avenues of growth. The retailer said it will expand internationally for the first time, opening 10 stores in Mexico during fiscal 2022. Dollar General also said it plans to have 1,000 pOpshelf stores in operation by the end of fiscal 2025. Dollar General introduced pOpshelf a year ago as a new suburban store concept offering a treasure hunt experience, delivered through continually refreshed merchandise, with about 95% of the items priced at $5 or less.

The announcements came as the retailer reported its third quarter results, which included a 3.9% increase in net sales, to $8.5 billion. Same-store sales declined 0.9% in the 13 weeks to October 29. Operating profit declined 13.9% to $665.6 million.

Todd Vasos, Dollar General’s chief executive officer, said he was pleased with the third quarter results. “During the quarter, we made meaningful progress advancing our key initiatives, while continuing to successfully deliver for our customers, despite a challenging operating environment,” he said.

Vasos said Dollar General will engage in nearly 3,000 real estate projects next year. Included among these will be the opening of 1,100 new stores. The company has been introducing fresh produce to more of its stores, and expanding into heath care. The company last summer hired its first chief medical officer, Dr. Albert Wu. Expanded health offerings include more varieties of cough and cold remedies, dental products, nutrition supplements, and medical aids.

The net sales increase in the third quarter was primarily driven by positive sales contributions from new stores, the company said in a statement. The decline in same-store sales was attributed to decreased customer traffic, though that was partially offset by a rise in average transaction amount. Comps were suppressed by a decline in the apparel and seasonal categories, partially offset by growth in the consumables and home products categories.

Cash flow from operations through the first three quarters amounted to $2.2 billion.

“Overall, we remain focused on our mission of Serving Others, and are confident in our plans to drive long-term sustainable growth and value for our shareholders,” Vasos said.

During a conference call, Vasos responded to an analyst’s question by reaffirming that Dollar General’s move into Mexico is not a response to a lack of growth opportunities in the U.S. market.

“We are squarely committed [to domestic growth], seeing 17,000 opportunities in the continental United States to put a store, between pOpshelf and Dollar General,” Vasos said. “That hasn’t changed.”

But Vasos pointed out that going into another country will be more complicated for Dollar General than expanding into its 47th state, for example.

“So we started working on this well over a year ago, and it takes many years to cultivate this initiative. Opening up to 10 stores next year is fairly aggressive. But it’ll take us many years to build out Mexico. And our thought was, even though we’ve got so many opportunities here, why not start now? We don’t want to wait till we’re down the road and need to move faster. We do everything pretty methodically here. And we feel that the right thing to do was to start working on it now, with the intent to put many locations down in Mexico.”

Dollar General did announce its planned expansion into Idaho, the retailer’s 47th state, back in September. The retailer said that construction is under way on a store in Athol, Idaho (about 46 miles northeast of Spokane, Wash.). That store is scheduled to open by spring 2022.

In response to another analyst’s question, Dollar General chief operating officer Jeff Owen talked about why Dollar General is so upbeat about the prospects for its pOpshelf format.

“We continue to be very, very pleased with how our customers are responding really to the entire box, and we’re very excited that we’re going to triple the store count in 2022, and that we’re laying the groundwork for 1,000 stores by 2025. So I think you can tell by our bullish news and our excitement, just how excited we are with what the customer is telling us. When you think about the store in general, there are many areas that our customer is gravitating towards and responding to.”

The pOpshelf format is designed to be a fun store for consumers to linger in, looking for deals in departments like Home, Kitchen, Beauty & Bath, Party & Occasion, Arts & Crafts, Toys and Household.

“Over 90% of our items are less than $5,” Owen said of pOpshelf’s assortment. “The consumer is really finding ways that she can treat herself and have a lot of fun in the shopping environment. We’re just getting started here, and we’ll get better and better and better. But that concept is performing really well. And we’re excited about how it’s going to complement the traditional Dollar General network.”