Categories Consumer, Earnings

Dollar General (NYSE: DG) Q3 2018 earnings: discount store cuts outlook on disaster impact

Discount-store chain Dollar General (DG) saw third-quarter earnings jump 35.5% to $1.26 per share in line with analyst estimates. Net sales jumped 8.7% to $6.4 billion on a 2.8% rise in same-store sales, according to the results posted on Tuesday before the bell.

In the quarter, Dollar General board of directors declared a cash dividend of $0.29 per share.

Majority of the analysts recommend a “strong buy” or “buy” rating on the stock with an average price target of $117.75.

Operating profit for the third quarter of 2018 grew 5.9% to $442.1 million. The effective income tax rate in the third quarter of 2018 was 20.0% compared to 35.8% in the third quarter of 2017. As of November 2, 2018, total merchandise inventories, at cost, were $3.98 billion compared to $3.60 billion as of November 3, 2017, an increase of approximately 4.0% on a per store basis.

Dollar General third quarter 2018 Earnings Infographic

“As a result of the third quarter hurricanes and other disasters, we will record greater-than-anticipated expenses in the second half of 2018,” said John Garratt, Dollar General’s CFO. “In total, the impact to third quarter EPS was an estimated $0.05 per diluted share and we expect to see an additional estimated $0.04 impact on our fourth quarter diluted EPS. We have adjusted our full-year outlook to reflect the estimated $0.09 impact of these events, ongoing transportation cost pressures and year-to-date results, ” he added.

For fiscal 2018, Dollar General expects net sales growth to be about 9%, generating diluted EPS of $5.85-$6.05; and a cash benefit of approximately $300 million as a result of the TCJA.

The company also expects share repurchases for the fiscal year to be a minimum of $850 million, with Capex of $725-$775 million.

Get access to timely and accurate verbatim transcripts that are published within hours of the event

Most Popular

Does Unity Software (U) stock has more room to run?

Last month, the IPO market was in a full swing. IPOs of Snowflake (NYSE: SNOW) and JFROG (NASDAQ: FROG) had an impressive opening day in September, the former creating a

PepsiCo (PEP): Steady snacking habits amid pandemic drive strong quarter for beverage giant

PepsiCo Inc. (NASDAQ: PEP) beat market expectations on both revenue and earnings for the third quarter of 2020. The company saw the momentum continue in its snacks business while the

Does the virus-driven boom make Electronic Arts (EA) a good investment?

With more and more people turning to virtual entertainment sources, amid the virus-related movement restrictions, video game publishers like Electronic Arts (NASDAQ: EA) are witnessing unusually high demand. Not surprisingly,

One thought on “Dollar General (NYSE: DG) Q3 2018 earnings: discount store cuts outlook on disaster impact

Leave a Reply

Your email address will not be published. Required fields are marked *

Add Comment
Loading...

Cancel
Viewing Highlight
Loading...
Highlight
Close
Top