Dollar General reported fiscal fourth-quarter revenue that narrowly surpassed Wall Street estimates; however, a store portfolio review negatively affected the chain’s profit.
The dollar-store chain announced plans to close 96 Dollar General stores and 45 Popshelf stores and convert six other Popshelf stores into flagship locations in Q1. Popshelf targets higher-income shoppers seeking affordable products.
Despite this, shares of the company rose 5% in premarket trading.
Compared to Wall Street expectations, Dollar General’s earnings per share were 87 cents, missing the $1.50 estimate, while revenue reached $10.3 billion, slightly above the $10.26 billion forecast.
For fiscal year 2025, Dollar General anticipates revenue growth between 3.4% and 4.4%, slightly below Wall Street’s 4.1% projection. The company expects earnings per share to range from $5.10 to $5.80, under the $5.85 analysts predicted.
Net income for Q4 was $191 million, or 87 cents per share, compared to $402 million, or $1.83 per share, in the same quarter last year. The portfolio review impacted earnings per share by 81 cents.
Operating profit fell over 49% year-over-year to $294 million, with $232 million in charges attributed to store closures and Popshelf impairment.
CEO Todd Vasos stated that the review strengthens the business foundation, despite the closures representing less than one percent of the overall store base.
Same-store sales grew 1.2% year-over-year for the quarter and are projected to grow 1.2% to 2.2% in the coming fiscal year.
— news from CNBC
