Home, Consumables Boost Dollar General In Q1

First quarter sales at Dollar General were up 7%, driven by positive results in consumables and home products.

For the quarter ended April 29, sales were $5.27 billion, compared to sales of $4.92 billion in the first quarter of 2015. Same-store sales were up 2.2%.

“Dollar General had a strong start to the year with our first quarter 2016 results,” said Todd Vasos, Dollar General CEO. “We remained keenly focused on ensuring the effectiveness and efficiency of every aspect of our business as we delivered both gross margin expansion and selling, general and administrative expense leverage.”

According to the company, same-store sales increases were driven by positive results in both the consumables category and certain of the non-consumables categories including seasonal and home products. The net sales increase also was positively affected by sales from new stores, partially offset by sales from closed stores.

The company’s net income was $295 million, or $1.03 per diluted share, in the 2016 first quarter, compared to net income of $253 million, or $0.84 per diluted share, in the 2015 first quarter.

Gross profit, as a percentage of sales, was 30.6% in the 2016 first quarter compared to 30.5% in the 2015 first quarter, an increase of 16 basis points. The majority of the gross profit rate increase was due to higher initial inventory markups and lower transportation costs partially attributable to lower fuel rates, offset in part by a greater proportion of sales of consumables merchandise, which have a lower gross profit rate than non-consumables merchandise, increased inventory shrinkage and higher markdowns.

During the 2016 first quarter, Dollar General opened 249 new stores and remodeled or relocated 301 stores. For 2016, the company plans to open 900 new stores and remodel or relocate 875 stores.

For 2017, the company intends to accelerate its square footage growth with plans to open about 1,000 stores and remodel or relocate about 900 stores. Dollar General operates 12,719 stores in 43 states.