Dollar General Earnings Gain As Leadership Changes

For the fiscal 2015 second quarter ended July 31, Dollar General Corp. posted net income of $282.3 million, or 95 cents per diluted share, versus $251.3 million, or 83 cents per diluted share, in the 2014 period. Comparable store sales advanced 2.8%.

Diluted earnings per share beat a Zacks Investment Research analyst average estimate by a penny.

The comp gain was due to increases in both customer traffic and average transaction value, Dollar General maintained. Net sales increased 7.9% to $5.10 billion. Beyond the comp gain, the sales increase was attributable to new stores, partially offset by closed stores, the company related.

All merchandise categories delivered positive same-store sales growth. In general merchandise, the most significant growth came from seasonal items, sundries, hardware and housewares. Candy and snacks, tobacco products, and perishables drove consumables sales.

Operating profit was $475.8 million versus $428.5 million in last year's second quarter.

"Dollar General achieved strong financial performance in the second quarter," said Todd Vasos, Dollar General CEO. "We delivered 7.9% sales growth, 2.8% same-store sales growth, robust gross margin expansion and 14% diluted EPS improvement over the 2014 second quarter. We also grew both customer traffic and average ticket for the 30th consecutive quarter when compared to the prior year quarter."

Vasos, who took over the CEO job in June from a retiring Rick Dreiling, added, "With new leadership in place for store operations and merchandising, we are well positioned to execute our key initiatives to drive topline growth over time. Looking ahead to 2016, our team is energized to accelerate our pace of growth as we focus on providing our consumers with everyday low prices and convenient locations."

Dollar General named James Thorpe evp/chief merchandising officer earlier this month and Jeff Owen evp/store operations in June.