DG Earnings: Dollar General reports strong first-quarter results

Dollar General Corp. (NYSE:DG) announced strong first-quarter results on Thursday. Even though the discounter’s earnings fell 29.5% year over year to $1.65 per share, they were still ahead of Street estimates of $1.58 per share.

The retailer’s sales rose 6.1% year-over-year to $9.9 billion, compared with analyst expectations of $9.89 billion. DG’s net sales growth was driven by new stores and same-store sales growth of 2.4%, despite the impact of store closures. The increase in same-store sales was driven by increased customer traffic, partially offset by a lower average transaction amount.

Dollar General announces dividend

The company’s board of directors has declared a quarterly cash dividend of $0.59 per share of common stock, payable on or before July 23, 2024 to shareholders of record on July 9, 2024. Additionally, DG did not repurchase any shares during the first quarter .

Dollar General’s FY24 financial guidance

DG forecast second-quarter same-store sales to grow in the range of just 2%, compared with analyst expectations of a 2.25% increase. The company forecast earnings per diluted share of $1.70 to $1.85, compared with Street estimates of $1.92 per share.

For FY24, the retailer forecasts net sales to grow in the range of approximately 6% to 6.7%, while comparable sales are likely to grow between 2% and 2.7%. DG estimates diluted earnings to be in the range of approximately $6.80 to $7.55 per diluted share.

Is DG a good investment?

Analysts remain cautiously optimistic about DG stock, with a consensus rating of “Moderate Buy” based on 11 “buy”, 9 “hold” and 1 “sell”. DG has fallen over 25% in price over the last year, and DG’s $159.16 average price target implies a 14.3% upside potential from current levels. These analyst ratings are likely to change following DG’s Q1 results today.