Dollar General sees sales increase in Q3 results
Dollar General reported better-than-expected third quarter sales and earnings, but cut its full-year outlook on hurricane-related costs.
The discounter also revealed its expansion plans for the upcoming year. It plans to undertake some 2,075 real estate projects in 2019, including 975 new store openings (up from 900 in 2018), 1,000 mature store remodels, and 100 store relocations.
“We remain very excited about our future real estate growth opportunities,” said CEO Todd Vasos. “We believe our ongoing investment in high-return real estate projects, along with our strategic initiatives, will not only continue to drive long-term shareholder value, but will also allow us to further enhance our ability to serve our communities and our customers.
Dollar General’s net income rose to $334.1 million, or $1.26 a share, for the quarter ended Nov. 2, from $252.5 million, or 93 cents a share, in the same period a year ago. Excluding a 5 cents-per-share negative impact from hurricane-related expenses, earnings per share came in at $1.31. Analysts had expected earnings per share of $1.27.
“As a result of the third quarter hurricanes and other disasters, we will record greater-than-anticipated expenses in the second half of 2018,” said John Garratt, Dollar General’s CFO. “In total, the impact to third quarter EPS was an estimated $0.05 per diluted share and we expect to see an additional estimated $0.04 impact on our fourth quarter diluted EPS. We have adjusted our full-year outlook to reflect the estimated $0.09 impact of these events, ongoing transportation cost pressures and year-to-date results.”
Third quarter sales increased 8.7% to $6.42 billion, above estimates of $6.39 billion. Same-store sales rose a better-than-expected 2.7%, driven by an increase in average transaction amount and positive results in the consumables, seasonal and home categories. Customer traffic was essentially flat, the company said.
For fiscal 2018, Dollar General lowered its sales growth outlook to just 9.0% from 9.0% to 9.3% and cut its earnings per share guidance to $5.85 to $6.05 from $5.95 to $6.15. It expects same-store sales growth to be in the middle of the previous range of mid-to-high two percent.
Take a look inside the first Walgreens-Kroger pilot store
When Walgreens and Kroger announced plans in October to collaborate on a pilot store format at 13 locations in northern Kentucky, the biggest question was what it might look like. The wait is over. Alongside news that the companies were expanding the partnership bringing the pilot to shoppers, the companies noted that the first of the stores currently is open in Florence, Ky.
The store — photos of which are above — features Kroger Express — an assortment of roughly 2,300 products that runs the gamut from national brands to Kroger’s private-label products and Home Chef meal kits. The store also includes a selection of fresh produce and fruit, as well as dairy and meat.
Walgreens, Kroger expand pilot partnership
Walgreens and Kroger are expanding on their still-young partnership. The two companies are building on the exploratory pilot format they announced in October. The expansion will bring Kroger Express — a 2,300-product assortment that includes products from national brands, Kroger own brands products and Home Chef meal kits, as well as a selection of fruit, product, meat and dairy — to 13 Walgreens locations in Northern Kentucky.
“We are redefining the customer experience in a variety of ways through Restock Kroger including innovative partnerships like our test-and-learn pilot with Walgreens,” said Robert Clark, Kroger senior vice president of merchandising. “We are excited to enter the next phase of the pilot. The Kroger Express concept creates easy access to our most popular Our Brands products through a fill-in grocery shopping experience for Walgreens customers, and our Home Chef Express meal kits provide customers with an on-demand solution for tonight’s dinner.”
The first of the 13 stores currently is up-and-running in Florence, Ky., with the remaining 12 slated to open early next year, the companies said.
“We’re pleased to continue working together to explore new concepts that expand product selection to provide a better shopping experience and greater value for our customers,” said Richard Ashworth, Walgreens president of operations.
As the Kentucky pilot stores get off the ground, Chicago-area shoppers already are seeing some of the fruits of the partnership, with 65 Walgreens stores carrying Home Chef Express meal kits. Walgreens will offer three Home Chef Express meal kit options, rotating recipes on a bi-weekly basis during the pilot. Each meal serves two and starts at $8.50 per serving, the companies said.
“Customers have responded favorably to the retail meal kits at our Mariano’s stores in the market and other Kroger Family of Stores located in different cities,” Kroger’s Clark said. “The Walgreens expansion provides more Chicagoans convenient access to a quick, simple meal.”