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Dollar General records 7.8% hike in Q3FY14 sales
15
Dec '14
NYSE listed retailer, Dollar General Corp, which has 11,715 stores in 40 US states, recorded a 7.8 per cent from a year ago quarter hike in sales in the 13 weeks to October 31, 2014.

Dollar General said same-store sales also rose 2.8 per cent compared to the 2013 third quarter, which represents the retailers’ 27th consecutive quarter of year over year increases.

Net sales increased 7.8 percent to $4.72 billion in the third quarter of 2014 compared to $4.38 billion in the third quarter of 2014.

Solid same-store sales growth in home products and apparel and in ladies, men’s and boy’s clothing, apparel accessories and home décor, helped the retailer post overall sales growth.

Gross profit, as a percentage of net sales stood at 30.1 per cent in the reporting quarter, down 18 basis points from the prior year third quarter.

The retailer recorded a LIFO provision of $2.2 million in the 2014 period compared to a LIFO benefit of $3.7 million in the 2013 period.

SG&A as a percentage of net sales was 21.8 per cent in the quarter under review as against 21.4 per cent in the corresponding quarter of 2013, an increase of 38 basis points.

The retailer said the 2014 third quarter period included expenses of $8.2 million or 17 basis points relating to its proposal to acquire Family Dollar Stores, Inc.

In addition, the third quarter of 2014 SG&A, as percentage of sales, also reflects the impact of increased rent, utilities and incentive compensation expenses.

These items were partially offset by convenience fees charged to customers for cash back on debit card transactions and favourable retail labour expense, which rose at a rate lower than the hike in sales.

The effective income tax rate was 36.5 per cent for the 2014 third quarter compared to a rate of 35.6 percent for last year’s third quarter.

According to Dollar General, the effective tax rate increase was due to the expiration of various federal jobs credit programs for eligible employees hired after December 31, 2013.

“In addition, certain expenses relating to the proposed acquisition of Family Dollar are not deductible for income tax purposes,” it added.

The retailer however recorded a marginal dip in net income at $236 million, or $0.78 per diluted share in the reporting quarter compared $237 million, or $0.74 per diluted share in the 2013 third quarter. (AR)

Fibre2fashion News Desk - India

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