LONDON, UK / ACCESSWIRE / September 22, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Dollar General Corp. (NYSE: DG), which can be viewed by registering at http://protraderdaily.com/optin/'symbol=DG, following the Company's announcement of its financial results on August 31, 2017, for the second quarter of the fiscal year 2017 (Q2 FY17). The Goodlettsville, Tennessee-based Company's net sales grew 8.1% y-o-y, outshining market consensus estimates. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Earnings Reviewed
Dollar General reported net sales of $5.83 billion in Q2 FY17, which came in above the $5.39 billion recorded in Q2 FY16. The net sales numbers beat market consensus estimates of $5.82 billion for Q2 FY17. During the reported quarter, same-store sales grew 2.6%, primarily attributable to increased average transaction amount and customer traffic.
The discount retailer's net income came in at $294.78 million, or $1.08 per diluted share, during Q2 FY17 compared to $306.52 million, or $1.08 per diluted share, in Q2 FY16. Additionally, the earnings included expenses of $0.02 per share pertaining to lease termination costs in the reported quarter. Therefore, the Company's adjusted earnings were $1.08 per diluted share for Q2 FY17, which came in above Wall Street's expectations of $1.09 per diluted share.
Operating Metrics
For Q2 FY17, the Company's cost of goods sold was $4.04 billion, higher than the $3.71 billion recorded in the year-ago comparable quarter. The Company's gross profit came in at $1.79 billion, or 30.72% of net sales, for Q2 FY17 compared to $1.68 billion, or 31.19% of net sales, in the last year's corresponding quarter. The Company's selling, general, and administrative expenses (SG&A) incurred were $1.30 billion, or 22.26% of net sales, during Q2 FY17 compared to $1.17 billion, or 21.75% of net sales, in Q2 FY16. Additionally, the Company's operating profit was $493.15 million, or 8.46% of net sales, during Q2 FY17 compared to $509.10 million, or 9.44% of net sales, in the prior year's same quarter.
Sales by Category
During Q2 FY17, net sales of the Consumables category increased to $4.48 billion, or 76.94% of net sales, compared to $4.11 billion, or 76.35% of net sales, in the year-ago corresponding quarter. Sales for the Seasonal category came in at $717.99 million, or 12.32% of net sales, for Q2 FY17 compared to $673.95 million, or 12.50% of net sales, in the previous year's same quarter.
In Q2 FY17, sales of the Home Products category stood at $327.65 million, or 5.62% of net sales, versus $315.60 million, or 5.85% of net sales, in Q2 FY16. Additionally, sales for the Apparel category was $298.31 million, or 5.12% of net sales, for the reported quarter compared to $285.89 million, or 5.30% of net sales, in Q2 FY16.
Cash Flow and Balance Sheet
In the six months ended August 04, 2017, Dollar General's net cash provided by operating activities came in at $786.23 million compared to $793.33 million in FY16. As on August 04, 2017, the Company had cash and cash equivalents balance of $214.17 million compared to a balance of $187.92 million as on February 03, 2017. The Company reported long-term obligation of $2.68 billion in its books of accounts as on August 04, 2017, versus $2.71 billion as on February 03, 2017. Furthermore, merchandise inventories stood at $3.46 billion as of August 04, 2017, compared to $3.26 billion as of February 03, 2017.
Dividend and Share Repurchase
In its earnings press release, Dollar General announced that its Board of Directors declared on August 30, 2017, a quarterly cash dividend of $0.26 per share. The dividend is payable on October 24, 2017, to shareholders of record at the close of business on October 10, 2017.
During Q2 FY17, the Company bought back and retired 1.0 million shares of its common stock at an average price of $71.92 per share. The Company has repurchased a total of 76.7 million shares for $4.7 billion at an average price of $61.71 per share, since the inception of the share repurchase program in December 2011 through the end of Q2 FY17.
Acquisition
On June 12, 2017, the Company informed the market that it had finalized the purchase of the Acquired Stores, which will result in a net increase of approximately 285 new stores in 35 states. Furthermore, the Company plans to convert these stores to the Dollar General stores by the end of November 2017.
Earnings Outlook
In its guidance for the full FY17, Dollar General raised GAAP diluted earnings per share outlook range to $4.35 to $4.50 from the prior projected band of $4.25 to $4.50. The Company continues to forecast net sales to increase by approximately 5% to 7% y-o-y with same-store sales growth of slightly positive to an increase of 2%, for FY17.
Stock Performance
On Thursday, September 21, 2017, the stock closed the trading session at $76.77, dropping 1.01% from its previous closing price of $77.55. A total volume of 1.71 million shares have exchanged hands. Dollar General's stock price advanced 8.01% in the last three months, 11.42% in the past six months, and 6.36% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have gained 3.65%. The stock is trading at a PE ratio of 17.35 and has a dividend yield of 1.35%. At Thursday's closing price, the stock's net capitalization stands at $21.01 billion.
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