Dollar General (NYSE:DG) stock is up 3.1% in pre-market trading following the release of third-quarter earnings that exceeded the average analyst estimate.
The company reported earnings per share of $1.26 on revenue of $9.69 billion, just ahead of the Street at $1.20 for Q3 EPS and revenue of $9.65 billion. Revenue rose 2.4% year-over-year.
“While we are not satisfied with our financial results for the third quarter, including a significant headwind from inventory shrink, we are pleased with the momentum in some of the underlying sales trends, including positive customer traffic, as well as market share gains in both dollars and units,” said Todd Vasos, Dollar General’s chief executive officer.
“We continue to believe our model is relevant in all economic cycles, and we are working diligently to further enhance our unique combination of value and convenience.”
Comparable sales declined by 1.3% year–over–year, which is a smaller-than-expected decline. The gross margin was reported at 29%, down 150 basis points YoY and below the Street at 29.2%.
The company maintains its expectations, anticipating net sales growth between 1.5% and 2.5%, with a potential negative impact of around two percentage points due to the comparison with the fiscal 2022 53rd week.
Same-store sales growth is projected to be in the range of approximately a decline of 1.0% to flat.
Diluted earnings per share are expected to be within the range of approximately $7.10 to $7.60, representing a decline of 34% to 29%.