Dollar General posts upbeat first quarter on demand for pocket-friendly groceries

Dollar General posts upbeat first quarter on demand for pocket-friendly groceries

(Reuters) – Dollar General beat same-store sales and profit estimates for the first quarter on Thursday as more Americans flocked to its stores to buy groceries and home goods. essential essentials that are easy to carry, at a time when persistent inflation continues to put pressure on household budgets.

Shares of the Goodlettsville, Tenn.-based company jumped more than 5% before the bell.

Dollar General has focused on selling relevant merchandise, having more employees in stores and expanding private labels, as it seeks to attract consumers amid growing competition from rivals Walmart, Target and the Chinese e-commerce platform Temu.

“These results were driven by strong customer traffic growth and market share gains during the quarter,” said CEO Todd Vasos.

Visits to Dollar General increased 12.6% year over year in the first quarter, while rival Dollar Tree saw a 12.4% increase, according to data analytics firm Placer. have.

Robust quarterly results from the Walmart Barometer earlier in May indicated that U.S. shoppers are still resilient, although rival Target warned of shoppers delaying purchases and spending more and more on out-of-home activities.

Dollar General’s same-store sales rose 2.4% for the quarter, compared with analysts’ average estimate of a 1.61% increase, according to LSEG data.

The discount retailer reported earnings per share of $1.65, compared to $1.57 expected by analysts.

Its gross margin as a percentage of net sales, however, rose to 30.2%, up from 31.6% a year earlier, as it resorted to higher markdowns and saw an increase in shrink in the retail, where inventory is lost or damaged due to theft or theft. breakup.

The company also reaffirmed its annual sales and profit guidance.

(Reporting by Granth Vanaik in Bangalore; editing by Shilpi Majumdar)

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