American retailer Dollar General's net sales up 5.0% in Q3 FY24

Same-store sales increased 1.3 per cent compared to the third quarter of 2023, reflecting increases of 1.1 per cent in average transaction amount and 0.3 per cent in customer traffic. Same-store sales in the third quarter of 2024 included growth in the consumables category, partially offset by declines in each of the home, seasonal, and apparel categories.

Gross profit as a percentage of net sales was 28.8 per cent in the third quarter of 2024 compared to 29.0 per cent in the third quarter of 2023, a decrease of 18 basis points. This gross profit rate decrease was primarily attributable to increased markdowns, increased inventory damages and a greater proportion of sales coming from the consumables category; partially offset by higher inventory mark-ups, lower shrink and decreased transportation costs, the company said in a press release.

“We are pleased with our team’s execution in the third quarter, particularly in light of multiple hurricanes that impacted our business,” said Todd Vasos, Dollar General’s chief executive officer. “We are proud of the way our team responded to serve our communities, demonstrating the commitment and dedication to fulfilling our mission of serving others that is pervasive throughout our organisation.”

SG&A as a percentage of net sales were 25.7 per cent in the third quarter of 2024 compared to 24.5 per cent in the third quarter of 2023, an increase of 111 basis points. The primary expenses that were a greater percentage of net sales in the current year quarter were hurricane-related costs, retail labour, and depreciation and amortisation; partially offset by a decrease in professional fees. The 2024 period results include $32.7 million of hurricane-related costs, the majority of which were store inventory and property losses.

“While we continue to operate in an environment where our core customer is financially constrained, we delivered same-store sales near the top end of our expectations for the quarter. We believe our back to basics efforts contributed to these results, as we have continued to improve our execution and the customer experience in our stores,” explained Vasos.

For fiscal 2024, the company expects net sales growth in the range of approximately 4.8 per cent to 5.1 per cent, compared to its previous expectation of approximately 4.7 per cent to 5.3 per cent, same-store sales growth in the range of approximately 1.1 per cent to 1.4 per cent, compared to its previous expectation in the range of 1.0 per cent to 1.6 per cent.

“Looking ahead, we are excited about our robust real estate plans for 2025. We believe our balance of new store growth and a significantly increased number of projects impacting our mature store base will further solidify Dollar General as an essential partner to communities in rural America, while strengthening our foundation to drive long-term sustainable growth and shareholder value,” concluded Vasos.

Fibre2Fashion News Desk (RR)