Discount retailer Dollar General said Tuesday strong sales of its seasonal and home goods boosted same-store sales and helped increase third-quarter earnings by 35 percent over the year-earlier level.
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But shares fell hard as the Tennessee-based retailer warned that fourth-quarter results will be hurt by the effect of hurricanes.
“As a result of the third quarter hurricanes and other disasters, we will record greater-than-anticipated expenses in the second half of 2018,” said John Garratt, Dollar General’s chief financial officer.
Net income for the third quarter was $334 million compared to $253 million in the third quarter of 2017. Diluted earnings per share (EPS) grew 35.5 percent to $1.26 in the third quarter of 2018 compared to diluted EPS of $0.93 in the third quarter of 2017.
Same-store sales in the third quarter rose 2.8 percent, while net sales were up 8.7 percent to $6.4 billion for the three-month period ended Nov. 2 compared to $5.9 billion in the same period of 2017.
"This net sales increase was positively affected by sales contributions from new stores and growth in same-store sales, modestly offset by the impact of store closures," the retailer said in a statement.
"Same-store sales increased 2.8% from the third quarter of 2017, driven by an increase in average transaction amount and positive results in the consumables, seasonal and home categories, partially offset by sales declines in the apparel category. Customer traffic was essentially flat."