US discount retailer Dollar General has recorded a 6.1% increase in net sales for the first quarter (Q1) of the fiscal year 2024 (FY24), reaching $9.91bn, up from $9.34bn in Q1 FY23.
The rise in sales is attributed to contributions from new stores and an uptick in same-store sales, despite some store closures.
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The company’s same-store sales saw a 2.4% rise, spurred by increased customer traffic, although this was somewhat balanced by a lower average transaction amount.
However, Dollar General’s net income for the first quarter fell by 29.4% to $363.3m, down from $514.4m in the previous year.
The retailer’s diluted earnings per share (EPS) for the 13 weeks to 3 May 2024 also decreased by 29.5% to $1.65, compared to $2.34 in Q1 FY23.
The company’s operating profit experienced a 26.3% decline, standing at $546.1m in Q1 FY24.
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By GlobalDataIts selling, general and administrative expenses as a percentage of net sales were 24.7% in the first quarter of 2024, up from 23.7% in the previous year.
The gross profit of Dollar General as a percentage of net sales also dropped to 30.2% in Q1 FY24 from 31.6% in the same quarter of the previous year.
Dollar General CEO Todd Vasos said: “We are pleased with our start to 2024, including top and bottom-line results that exceeded our expectations in the first quarter.
“These results were driven by strong customer traffic growth and market share gains during the quarter, which we believe is a testament to the relevance of our unique combination of value and convenience, as well as to improved execution across our organisation.”
Looking ahead to the 52-week fiscal year ending 31 January 2025, Dollar General forecasts net sales growth between 6.0% and 6.7% and same-store sales growth between 2.0% and 2.7%.
The retailer also anticipates diluted EPS to be between $6.80 and $7.55.
The retailer plans to undertake 2,435 real estate projects in fiscal 2024, including 730 new store openings, 1,620 remodels and 85 store relocations, adjusting its previous plan of 2,385 real estate projects.
