Jamie Spencer
Dollar General (DG) on Thursday posted fiscal fourth-quarter revenue that slightly exceeded Wall Street estimates, though profit took a hit due to a store portfolio review.
Store Closures and Strategic Shift
As part of its restructuring, the company announced plans to close 96 Dollar General locations and 45 Popshelf stores. Additionally, six Popshelf locations will be converted into flagship Dollar General stores. Popshelf, which caters to higher-income shoppers, has struggled amid economic challenges.
On the earnings call, CEO Todd Vasos warned that consumers “only have enough money for basic essentials” and that the broader economic environment is unlikely to improve this year.
Despite the mixed results, shares of Dollar General rose 3% in early trading Thursday.
Q4 Performance vs. Expectations
For the quarter ended Jan. 31, Dollar General’s results compared to Wall Street expectations as follows:
- Earnings per share: 87 cents (may not be directly comparable to $1.50 estimate)
- Revenue: $10.3 billion vs. $10.26 billion expected
Fourth-quarter revenue rose 4.5% from $9.86 billion a year ago, bringing full-year revenue to $40.61 billion, an almost 5% increase from 2023.
Outlook for 2025
For fiscal 2025, Dollar General forecasts revenue growth of 3.4% to 4.4%, slightly below Wall Street’s expectation of 4.1%. The company expects annual earnings per share to be between $5.10 and $5.80, missing analysts’ projected $5.85.
Same-store sales grew 1.2% in Q4 and are expected to rise between 1.2% and 2.2% for the upcoming fiscal year.
Profit Decline and Portfolio Impact
Dollar General reported Q4 net income of $191 million (87 cents per share), down sharply from $402 million ($1.83 per share) a year earlier. The store portfolio review reduced earnings per share by 81 cents.
Operating profit plunged over 49% year over year to $294 million, with $232 million in charges linked to store closures and Popshelf impairment.
“While the number of closings represents less than one percent of our overall store base, we believe this decision better positions us to serve our customers and communities,” said Vasos.
Competitive Landscape and Expansion Efforts
Dollar General is testing same-day delivery as inflation continues to pressure lower-income consumers. The company is also expanding its private-label product lineup, launching 100 new items under its Clover Valley brand in Q1, including honey mustard and cinnamon rolls.
With increased competition from Walmart and other retailers with stronger e-commerce presences, Dollar General’s adjustments aim to strengthen its market position.
