Dollar General Q4 2024 Earnings

Dollar General Reports Narrowly Beating Wall Street Estimates, Cuts 141 Stores

Dollar General reported fiscal fourth-quarter revenue that narrowly beat Wall Street estimates, while a store portfolio review cut into the chain’s profit.

As part of the reevaluation, the dollar-store chain said it will close 96 Dollar General stores and 45 Popshelf stores and will convert six other Popshelf stores into flagship banner locations in the first quarter. Popshelf stores cater to higher-income shoppers seeking inexpensive products.

On the company’s earnings call, CEO Todd Vasos warned consumers "only have enough money for basic essentials" and that the macro environment isn’t likely to improve this year.

Shares of the company closed up nearly 7% on Thursday.

Earnings and Revenue Performance

Here’s how the discounter did compared with what Wall Street was expecting for the quarter ended January 31, based on a survey of analysts by LSEG:

• Earnings per share: 87 cents, compared with an estimate of $1.50.
• Revenue: $10.3 billion vs. $10.26 billion expected

Fourth-quarter revenue rose 4.5% from $9.86 billion during the same quarter in 2023. Revenue for the full year came in at $40.61 billion, up almost 5% from $38.69 billion in 2023.

Fiscal 2025 Outlook

The chain forecasts revenue to grow between 3.4% and 4.4%, while Wall Street was expecting annual growth of 4.1%, according to LSEG. Dollar General expects earnings per share for the year to come in between $5.10 and $5.80, slightly under the $5.85 anticipated by analysts, according to LSEG.

Store Closures and Restructuring

The discounter reported fourth-quarter net income of $191 million, or 87 cents per share, compared with net income of $402 million, or $1.83 per share, during the same quarter a year prior.

The company attributed $232 million in charges to the store closures from the portfolio review as well as Popshelf impairment charges.

Same-Store Sales

Same-store sales, which Dollar General defines as revenue from stores open for at least 13 months, grew 1.2% year over year for the quarter. They’re expected to grow 1.2% to 2.2% for the coming fiscal year, the company said.

Conclusion

Dollar General’s decision to close 141 stores and restructure its portfolio is aimed at strengthening its foundation and better serving its customers and communities. While the company’s fourth-quarter results beat Wall Street estimates, its profit was impacted by the store closures and restructuring charges. The discounter’s same-store sales growth and planned expansion into same-day delivery may help drive future growth.

Frequently Asked Questions

Q: Why is Dollar General closing 141 stores?
A: The company is closing stores as part of a portfolio review to strengthen its foundation and better serve its customers and communities.

Q: How many stores will be closed in total?
A: 96 Dollar General stores and 45 Popshelf stores will be closed.

Q: What is the reason for the store closures?
A: The company is closing underperforming stores to focus on more profitable locations and to better serve its customers.

Q: What is Dollar General’s outlook for fiscal 2025?
A: The company expects revenue to grow between 3.4% and 4.4%, and earnings per share to come in between $5.10 and $5.80.