Gross profit as a percentage of net sales was 30.5 per cent in the third quarter of FY22 compared to 30.8 per cent in the third quarter of FY21, a decrease of 27 basis points. This gross profit rate decrease was primarily attributable to an increased LIFO provision, which was driven higher by product costs; a greater proportion of sales coming from the consumables category, which generally has a lower gross profit rate than other product categories; and increases in distribution costs, markdowns, inventory shrink and damages; partially offset by higher inventory markups, the company said in a press release.
American variety store chain Dollar General Corporation has posted a 11.1 per cent increase in net sales to $9.5 billion in the third quarter of fiscal 2022 ended October 28. The company’s same-store sales increased 6.8 per cent compared to Q3 FY21, driven by an increase in average transaction amount and a modest increase in customer traffic.
Selling, general, and administrative expenses as a percentage of net sales were 22.7 per cent in Q3 FY22, compared to 22.9 per cent in Q3 FY21, a decrease of 23 basis points.
The company’s operating profit for the third quarter of FY22 increased 10.5 per cent to $735.5 million, compared to $665.6 million in the third quarter of FY21.
Dollar General reported a net income of $526.2 million for Q3 FY22, an increase of 8 per cent compared to $487 million in the third quarter of FY21. Diluted EPS increased 12 per cent to $2.33 for Q3 FY22 compared to diluted EPS of $2.08 in Q3 FY21.
As of October 28, 2022, total merchandise inventories, at cost, were $7.1 billion compared to $5.3 billion as of October 29, 2021, an increase of 28.4 per cent on a per-store basis.
Dollar General expects same-store sales growth of approximately 6–7 per cent for the fourth quarter of fiscal 2022, which would result in growth toward the upper end of its previously expected range of 4–4.5 per cent for fiscal 2022. Diluted EPS in the range of $3.15–$3.30 for Q4 FY22, which would result in growth in the range of approximately 7–8 per cent for fiscal 2022; compared to its previous expectation in the range of approximately 12–14 per cent for FY22.
The company expects net sales growth of approximately 11 per cent, including an estimated benefit of approximately two percentage points from the 53rd week, in FY22. Dollar General now plans to execute approximately 2,945 real estate projects in FY22, compared to its previous expectation in the range of 2,930 to 2,980 projects.
For fiscal 2023, the company plans to execute approximately 3,170 real estate projects in the US.
Fibre2Fashion News Desk (DP)