The top-line improvement was spread across all four of Dollar General’s major product segments, as sales of consumables, by far the biggest category with a 79% share of total sales, rose 9.2% to $5.52 billion, while sales of seasonal items grew at an identical pace to $750.8 million. Home products revenues expanded 7.8% to $400.9 million, and apparel improved 5.8% to $299.2 million.
“We are pleased with another quarter of strong performance across the business,” said Todd Vasos, chief executive officer, in a statement. “The quarter was highlighted by our best customer traffic and same-store sales increases in nearly five years, as well as double-digit growth in both operating profit and diluted EPS. We continue to execute well on many fronts, while maintaining our focus on delivering value and convenience for our customers.”
As Vasos noted, operating profit climbed 11.1% to $491.4 million, as gross margin added 1 basis point to 29.54% and selling, general and administrative expense contracted by 13 basis points to 22.51% of sales. With interest expense decreasing 1.3% to $24.3 million, pretax income gained 11.9% to $467.2 million.
With another strong performance on the books, management raised its guidance on net sales growth, same-store sales, operating profit (both GAAP and adjusted) and earnings.
Net sales are now expected to grow in the low 8%+ range, with same-store sales calculated to improve in the mid-to-high 3% range. Reported operating profit is anticipated to rise between 6% and 8%, while adjusted operating profit is forecast to expand between 7% and 9%.
Diluted earnings per share for the year are now estimated to range between $6.46 and $6.56 per share, up from a previous forecast of $6.36 to $6.51 per share. The mid point of that range, $6.60, is a penny shy of the Zacks Consensus Estimate of $6.61 per share.