US discount store company Dollar General has reported that its net sales increased 5% to $40.6bn in the fiscal 2024 (FY24), compared with the previous year’s figure of $38.7bn.
The growth was largely due to the opening of new stores and an uptick in same-store sales, although somewhat mitigated by the closure of some locations.
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The retailer’s same-store sales saw a 1.4% increase, with customer traffic contributing a 1.1% rise and the average transaction amount growing 0.3%.
However, the company’s gross profit as a percentage of net sales declined by 70 basis points to 29.6%, down from 30.3% in fiscal 2023.
Its operating profit also fell significantly, dropping 29.9% to $1.7bn from $2.4bn in the previous fiscal year.
The increase in selling, general and administrative expenses as a percentage of net sales was notable, rising from 24.0% to 25.4%, marking a 140 basis point increase.
Net income for the company decreased substantially by 32.3%, going from $1.7bn in fiscal 2023 to $1.1bn in fiscal 2024, with diluted earnings per share (EPS) also dropping 32.3% from $7.55 to $5.11.
In the fourth quarter (Q4) of fiscal 2024, Dollar General reported a net sales increase of 4.5% to $10.3bn compared to $9.9bn in the corresponding quarter of the previous fiscal year.
The gross profit as a percentage of net sales for this quarter slightly decreased by 8 basis points to 29.4%.
Net income for the quarter plummeted 52.4% to $191.2m, and diluted EPS followed suit, decreasing by 52.5% to $0.87.
Dollar General anticipates 2025 net sales growth between 3.4% and 4.4%, with same-store sales potentially growing between 1.2% and 2.2%.
The retailer expects diluted EPS to be between $5.10 and $5.80, assuming an effective tax rate of 23.5%.
In its store portfolio optimisation review during the fourth quarter of fiscal 2024, Dollar General evaluated its stores under both the Dollar General and pOpshelf banners for potential closures or re-branding based on performance metrics and future projections, among other criteria.
Following this review, Dollar General has decided to close 96 Dollar General stores and shutter 45 pOpshelf stores while converting six pOpshelf locations into Dollar General stores within the first quarter of the fiscal year ending 30 January 2026.
In February 2025, Dollar General officially unveiled its latest distribution centre in North Little Rock, Arkansas, strengthening its supply chain operations.
