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GOODLETTSVILLE, Tenn. — Dollar General today topped revenue estimates for its fourth quarter and said its shoppers continue to forsake discretionary purchases in favor of basic essentials.
Fourth-quarter earnings took a hit from a portfolio review aimed at identifying stores for closure or conversion to its flagship Dollar General banner.
“As we look to build on the substantial progress we made on our Back to Basics work in fiscal 2024, we believe this review was appropriate to further strengthen the foundation of our business,” said Todd Vasos, Dollar General’s chief executive officer. “While the number of closings represents less than 1% of our overall store base, we believe this decision better positions us to serve our customers and communities.”
Dollar General said it is closing 96 Dollar General stores and 45 pOpshelf stores, and will convert six other pOpshelf stores into flagship banner locations. DG has been moving more cautiously on its pOpshelf rollout — seen as a path for expansion into the suburbs — in light of format’s core offering in non-consumables, making it more susceptible to weakness in discretionary spending.
Dollar General said fourth-quarter net sales increased 4.5%. For the full year, net sales rose 5%.
Same-store sales were up 1.2% in the fourth quarter and 1.4% for fiscal 2024.
The retailer posted fourth-quarter net income of $191 million, or 87 cents per share, compared with net income of $402 million, or $1.83 per share, during the same quarter a year prior.
Operating profit for the quarter declined by about 50% to $294 million. Fiscal year operating profit declined nearly 30% to $1.7 billion. Dollar General took charges of $232 million associated with its store portfolio review, primarily due to store closures and pOpshelf impairment charges.
Vasos warned on an earnings call that DG shoppers “only have enough money for basic essentials” and said "the macro environment isn’t likely to improve this year.”
For fiscal 2025, the company expects net sales growth in the range of 3.4% to 4.4%. Management projects same-store sales growth in the range of 1.2% to 2.2%, and diluted EPS in the range of $5.10 to $5.80. Capital expenditures, including those related to investments in the company’s strategic initiatives, are expected in the range of $1.3 billion to $1.4 billion
Dollar General is also reiterating its plans to execute approximately 4,885 real estate projects in fiscal 2025, including opening approximately 575 new stores in the U.S. and up to 15 new stores in Mexico, fully remodeling approximately 2,000 stores, remodeling approximately 2,250 stores through Project Elevate, and relocating approximately 45 stores.
