Shares of Dollar General Corp (NYSE: DG) were down 5.3% as of 1:06 p.m. EDT Thursday after the discount retailer announced mixed second-quarter 2017 results and weaker-than-expected full-year earnings guidance.
Continue Reading Below
That's not to say Dollar General's results looked bad on the surface. Quarterly revenue climbed 8.1% year over year to $5.83 billion, including a 2.6% increase in same-store sales. On the bottom line, that translated to net income of $295 million, or $1.08 per diluted share, compared with $307 million, or $1.08 per share in the same year-ago period. Analysts, on average, were expecting slightly higher earnings of $1.09 per share on slightly lower revenue of $5.80 billion.
To be fair, note this year's earnings included a $0.02-per-share charge related to Dollar General's June acquisition of 285 new store locations in 35 states from a small-box multiprice-point retailer. The company plans to convert those stores to Dollar General locations by the end of November.
CEO Todd Vasos remained optimistic, stating:
Dollar General reiterated its full fiscal 2017 outlook for sales to increase by 5% to 7%, but now assumes a change in same-store sales at the high end of its previous guidance for growth ranging from slightly positive to 2%. Dollar General also increased the lower end of its full-year earnings guidance by $0.10 per share, resulting in a new expected 2017 EPS range of $4.35 to $4.50. Even so, analysts' consensus estimates were already modeling full-year earnings of $4.51 per share.
This certainly wasn't a bad quarter from Dollar General, but it's obvious the market was hoping for more even as the company continues to outperform its peers in today's challenging retail environment.
10 stocks we like better than Dollar GeneralWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now… and Dollar General wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of August 1, 2017
Continue Reading Below