No. of Recommendations: 4
Beat on sales and earnings, some improvement in operating margin
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Dollar General press release (DG): Q4 GAAP EPS of $1.93 beats by $0.29.
Revenue of $10.9B (+5.8% Y/Y) beats by $80M.
Fourth Quarter Same-Store Sales Increased 4.3%; Fiscal Year Same-Store Sales Increased 3.0%
Net sales increased 5.9% to $10.9 billion in the fourth quarter of fiscal 2025 compared to $10.3 billion in the fourth quarter of fiscal 2024. The net sales increase was driven by growth in same-store sales and positive sales contributions from new stores, partially offset by the impact of store closures. Same-store sales increased 4.3% compared to the fourth quarter of 2024, reflecting increases of 2.6% in customer traffic and 1.7% in average transaction amount. Same-store sales in the fourth quarter of fiscal 2025 included growth in each of the consumables, seasonal, home products, and apparel categories.
The Company expects the following for fiscal year ending January 29, 2027 (“fiscal 2026”):
Net sales growth in the range of approximately 3.7% to 4.2% vs 4.22% consensus
Same-store sales growth in the range of approximately 2.2% to 2.7%
Diluted EPS in the range of approximately $7.10 to $7.35
Diluted EPS guidance assumes an effective tax rate of approximately 25%
Diluted EPS guidance assumes a negative impact of approximately $0.13 due to the expiration of the Work Opportunity Tax Credit on December 31, 2025
Capital expenditures, including those related to investments in the Company’s strategic initiatives, in the range of $1.4 billion to $1.5 billion
The Company is also reiterating its plans to execute approximately 4,730 real estate projects in fiscal 2026, including opening approximately 450 new stores in the United States and approximately 10 new stores in Mexico, remodeling approximately 2,000 stores through Project Renovate, remodeling approximately 2,250 stores through Project Elevate, and relocating approximately 20 stores.
