DG Guides FY11 In-Line

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Last Update: 01-Jun-11 09:39 ET

Dollar General (DG 33.09 -2.02) reported first quarter earnings of $0.48 per share, below the consensus of $0.50. Revenues rose 11.0% year-over-year to $3.45 billion, modestly above the $3.42 billion consensus.

The company's gross profit rate decreased by 63 basis points to 31.5 percent of sales in the 2011 first quarter from 32.1 percent of sales in the 2010 first quarter.

Management reaffirmed guidance for fiscal year 2012, seeing earnings of $2.20-2.30 per share, in-line with the $2.26 consensus. Management sees fiscal year 2012 revenues of up 11-13% year-over-year to roughly $14.47-14.73 billion, in-line with the $14.51 billion consensus.

The company noted "Our first quarter sales exceeded our expectations with strong same-store sales growth of 5.4 percent. As I look back on the first quarter, we maintained our focus on serving our customers and worked to hold the line where we reasonably could when it came to raising prices in an environment of rising commodity and fuel costs. Our customers are depending on Dollar General more than ever for consistent value and convenience. In spite of expected gross margin headwinds, we remain well positioned to deliver on our financial outlook for fiscal 2011 as we invest for the long-term health of the Company."