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Last Update: 25-Mar-13 08:26 ET
Dollar General shares rise 3% following beat on EPS
Dollar General (DG $50.07 +1.46) reported fourth quarter earnings of $0.95 per share, excluding a $0.02 tax benefit, $0.05 better than the Capital IQ consensus of $0.90, while revenues rose 0.5% year/year to $4.21 billion versus the $4.26 bln consensus. Ex-sales for the week ending Feb 3, 2012 of $289 million, net sales increased 8.0%. Same-store sales, based on the comparable 13-week periods ended February 1, 2013 and February 3, 2012, increased 3.0%, resulting from increases in both customer traffic and average transaction amount. Same-store sales increases were primarily driven by consumables. The Company's gross profit, as a%age of sales, was 32.5% in Q4 compared to 32.2% in the 2011 quarter, an increase of 34 basis points. Co issues in-line guidance for FY14, sees EPS of $3.15-3.30 versus the $3.27 Capital IQ Consensus Estimate; sees FY14 revs of +10-12% to approximately $17.62-17.94 billion versus the. $17.63 billion Capital IQ Consensus Estimate with comps +4-6%, in-line with ests. Operating profit for 2013 is expected to be in the range of $1.780 billion to $1.845 billion. The co expects sales and EPS growth to be stronger in the second half of the year as merchandizing initiatives are implemented, including the rollout of tobacco products to substantially all stores and the completion of "Phase Five." In particular, the first quarter sales comparison is very challenging as the Company laps a very strong 6.7% same-store sales increase in the 2012 first quarter. The co plans to utilize a portion of its cash flows in 2013 to repurchase common stock under its share repurchase program, while targeting a ratio of adjusted debt, which includes an adjustment to estimate capitalized rent based on rent expense times 8, to adjusted EBITDAR at or below 3.0 to 1. The volatility of the macroeconomic environment continues to pressure the consumer and impact the Company's cost of purchasing and delivering merchandise to its stores. Management continues to closely monitor customers' responses to the economic and competitive climates. In 2012, the co repurchased $671 million, or 14.4 million shares, under its share repurchase program, including $75 million, or 1.7 million shares, repurchased in the 2012 fourth quarter. Including an additional $500 million authorization by the Company's board of directors on March 19, 2013, $644 million remains available for repurchase under the Company's share repurchase program.
