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'2011 another exceptional year' – CEO, Dollar General
Mar '12
Dollar General Corporation reported record sales, operating profit and net income for its fiscal 2011 fourth quarter (14 weeks) and full year (53 weeks) ended February 3, 2012.

“For Dollar General, 2011 was another exceptional year,” said Rick Dreiling, chairman and chief executive officer. “We executed on our operating priorities and delivered strong financial performance, while, at the same time, we were able to make significant investments which, I believe, will enable us to continue to achieve outstanding results.”

“The strategies and investments we have put in place over the last four years have helped us capture the market share, customer loyalty and operating efficiencies that are driving our results. I believe those strategies and investments, along with the ones we have planned for 2012, will continue to serve us well. In fact, sales for the year are off to a strong start. We are expecting another year of profitable growth, including fiscal 2012 estimates of total sales growth of 10 to 11 percent on a comparable 52-week basis, same-store sales growth of 3 to 5 percent, and adjusted EPS of $2.65 to $2.75.”

Fiscal Fourth Quarter 2011 Highlights
Net sales increased 20.1 percent to $4.19 billion in the 2011 fourth quarter compared to $3.49 billion in the 2010 fourth quarter. Excluding sales for the week ending February 3, 2012 (“the 53rd week”) of $289 million, net sales increased 11.8 percent. Same-store sales, based on the comparable 13-week periods ended January 27, 2012 and January 28, 2011, increased 6.5 percent, resulting from increases in both customer traffic and average transaction amount, which, to some extent, included an increase resulting from inflation.

Gross profit, as a percentage of sales, was 32.2 percent in the 2011 fourth quarter compared to 32.4 percent in the 2010 quarter, a decrease of 25 basis points. The most significant factors contributing to the net decrease in the fourth quarter gross profit rate were a higher mix of consumables, which generally have lower markups than non-consumables, and an increase to the provision for LIFO, partially offset by higher markups. Cost of goods sold included charges to increase the Company's LIFO reserve of $22 million in the 2011 fourth quarter and $5 million in the 2010 quarter.

Selling, general and administrative expenses (“SG&A”), as a percentage of sales, were 20.0 percent in the 2011 fourth quarter compared to 20.7 percent in the 2010 fourth quarter, an improvement of 68 basis points. Excluding the acceleration of equity-based compensation and other expenses resulting from secondary offerings of the Company's common stock of $10.3 million and $4.7 million in the 2011 and 2010 quarters, respectively, SG&A, as percentage of sales, improved by 79 basis points. The decline in SG&A, as a percentage of sales, was largely due to the impact of increased sales, including the 53rd week, improved utilization of retail store labor, and a decrease in incentive compensation. Various other cost reduction efforts contributed to the improvement in SG&A as a percentage of sales.

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