Dollar General Corp, on Thursday, reported mixed results for its fourth-quarter ended Feb 1, with profit pushed by an income tax expense while revenue succeeded to grow during the critical holiday period.
The discount retailer also forecasted 2019 profit which remained below expectations for increased spending to attract more customers.
For the fourth-quarter, the retailer’s profit fell to $483.2 million or $1.84 per share which was $712.2 million or $2.63 per share in the same quarter a year ago; this also missed the average analyst estimates of $1.88.
In the reported quarter, the Goodlettsville, Tennessee-based company faced an income tax expense of $130.2 million which impacted the profit, while company also blamed lower sales of high-margin products and higher transportation cost for the same.
Though the results are disappointing but are not problematic as these came due to a higher income tax provision in the quarter over the prior year’s which was less provisioned because of a tax benefit at that time, Neil Saunders, managing director of GlobalData Retail, said in a statement.
Company’s same-store sales grew by 4 percent, above from the analysts’ estimates of 2.6 percent, as its customers spent more on groceries due to early distribution of food stamps.
Dollar General’s revenue rose by 8.5 percent to $6.65 billion which was $6.13 billion a year ago and that also beat the analysts’ expectations of $6.61 billion.
Dollar General, for the whole year, reported earnings of $1.59 billion, or $5.97 per share, while during the same period it generated revenue of $25.63 billion.
For fiscal 2019, company is expecting earnings of between $6.30 and $6.50 per share, whereas analysts on average were estimating it to be $6.65, according to IBES data from Refinitiv.
Company is also intention of spending about $50 million to improve shopping convenience, labor productivity and distribution of fresh and frozen food, and is also planning not only to open 975 new stores but also remodeling of existing 1,000 stores.
