Same-store sales advanced 3.7% in the period
The company said overall same-store sales gains received a boost from positive results in the consumables, seasonal and apparel categories. Those gains were partially offset by sales declines in the home category.
Dollar General reported net income of $407 million for the quarter. Diluted earnings per share were $1.52, up 40.7% from the second quarter of 2017.
“We delivered a strong second quarter and are proud of our team’s execution,” Dollar General chief executive officer Todd Vasos said in a statement. “Our results this quarter were driven by contributions from our mature store base, as well as the robust performance of our new stores. In addition, we maintained our disciplined focus on cost control, which culminated in another quarter of significant earnings growth. At the same time, we also continued to invest in our strategic initiatives and made meaningful progress advancing against our goals.”
In the first half of the year, Dollar General spent $371 million on capital improvements related to property and equipment, including about $147 million for improvements, upgrades, remodels and relocations of existing stores. The company also spent $113 on projects related to distribution and transportation, $81 million for new leased stores (mainly for leasehold improvements, fixtures and equipment) and $24 million for information systems upgrades and other technology-related projects. During the 26-week period, Dollar General opened 510 new stores, remodeled 643 stores and relocated 67 stores. The company also bought back $200 million worth of its common stock, or 2.1 million shares, at an average price of $95.17 per share.
Looking ahead, the dollar store retailer expects its momentum to continue in the second half of the year. The company is projecting net sales growth for the entire fiscal year to be in the range of 9% to 9.3%, and is also raising its fiscal year 2018 same-store sales growth outlook to the mid-to-high 2% range. The company continues to expect its fiscal year 2018 operating margin rate to remain essentially unchanged from 2017, and is reiterating its diluted EPS guidance of $5.95 to $6.15 for fiscal year 2018.
For the full fiscal year, the company plans to open about 900 new stores, remodel 1,000 and relocate 100.