Dollar General plans 800 stores this year as rival Dollar Tree pulls back | Dump Trucks Charlotte NC

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Columbus Ohio Dump Truck Company Brief:

• One month after opening its 20,000th store, Dollar General said during a Thursday earnings call that it plans to open 800 more new stores, remodel 1,500 locations and relocate 85 stores this year — 2,385 real estate projects overall.
• The news comes one day after chief rival Dollar Tree Inc. said it plans to close about 600 of its Family Dollar locations this year and an additional 400 stores under both banners in the coming years as leases expire.
• New stores and same-store sales growth helped push Dollar General's full-year net sales up 2.2% to $38.7 billion. Net income for the year declined 31% to $1.7 billion from $2.4 billion a year earlier. Same-store sales in Q4 and for the year were just above flat, driven by growth in consumables that was moderated by declines in home, seasonal and apparel.

Dump Trucks Columbus OH Insight:

As Dollar Tree’s store fleet contracts, Dollar General continues to grow. The columbus oh dump truck company recently marked the one-year anniversary of its first store opening in Mexico and is planning up to 15 more in that country this year. The retailer is also expanding its Popshelf concept, with 30 Popshelf stores in the works this year, CEO Todd Vasos said during an earnings call.

However, as Popshelf’s core offering is mostly non-consumable items, that banner is more heavily impacted by a softer discretionary sales environment, Vasos said during the call. As a result, the columbus oh dump truck company is moving slowly on Popshelf’s growth.

“We continue to believe that the Popshelf concept provides an additional growth opportunity but are cognizant of the near-term pressures impacting non-consumable sales,” Vasos said.

The store growth comes on top of similar levels last year. In fiscal year 2023, Vasos said Dollar General moved on over 3,000 real estate projects. That included 987 new stores, 129 relocations and 2,007 remodels.

The retailer is projecting stronger sales growth next year, with guidance calling for sales growth in the range of 6% to 6.7%. While net sales in Q4 this year fell 3.4%, that was thanks to a bookkeeping quirk. A 13-week quarter in 2023 versus 14 weeks the prior year is to blame for Dollar General’s poor top-line sales numbers, Neil Saunders, managing director of GlobalData, said in emailed comments.

“When the additional sales from last year are removed, total sales grew by 6.9%. This is a robust pace of growth that reverses the slowdown of the last two quarters,” Saunders said. “However, most of the uplift is still being driven by the opening of new stores, with underlying comparable sales coming in at a much weaker 0.7%.”

Despite relatively strong results, Vasos said that customers are still impacted by two years of inflation. As a result, that’s driving consumers to make trade-offs and it’s pressuring the retailer’s discretionary sales categories.

Still, analysts were mostly positive on the company’s holiday quarter and full-year performance. Dollar General’s Q4 top- and bottom-line results beat expectations, Jefferies analysts led by Corey Tarlowe said in a note published ahead of the retailer’s mid-morning earnings call.

“Within the quarter, we are encouraged by positive traffic trends and market share gains. Looking to 2024, [Dollar General] guided top-line growth and comp sales above expectations and [earnings per share] relatively in line with consensus,” the analysts said.

Telsey Advisory Group analysts led by Joe Feldman characterized the Q1 profit outlook as soft. Dollar General expects a same-store sale increase of 1.5% to 2% “but the business is expected to improve as 2024 progresses,” Feldman said. “In 4Q23, we were encouraged to see market share gains as well as the positive comp and traffic, although we believe this could be partly helped by lower prices, elevated markdowns, and inventory clearance, as visible from a softer margin profile.”

Saunders was positive on Vasos’ return as CEO — Jeff Owen exited the top spot in October less than a year after he took over for Vasos. Under Vasos, the retailer is executing on a turnaround strategy and expanding its fresh and grocery offerings.

“Dollar General has already signaled that it intends to get back to basics in its operations and that it will invest more in front-line staffing to improve the customer experience,” Saunders said. “We believe this is the right approach and that strengthening the store proposition will help to ease up customer acquisition, retention, and spend.”