25012 Tue, 06/05/2012 - 12:10pm
GOODLETTSVILLE, Tenn.-Helped in part by a strong sales performance from the home department, Dollar General began its fiscal year with a 36 percent increase in net income, to a record $213.4 million.
The dollar-store chain also set a new record in net sales for the quarter, which ended on May 4. Sales grew 13 percent to $3.9 billion, including a same-store sales gain of 6.7 percent. In a conference call with financial analysts yesterday, Rick Dreiling, Dollar General’s chairman and CEO, noted the “positive sales momentum in home,” which included strong performances from housewares and domestics—window treatments in particular.
Also on the conference call, David Tehle, executive vice president and chief financial officer, said Dollar General’s efforts to control costs relating to the work force, store rents and other expenses paid off. Selling, general and administrative expenses, while increasing 10.2 percent in dollars, declined 56 basis points as a percentage of sales to 21.6 percent. Gross margin slipped two basis points to 31.5 percent.
Based on the first-quarter numbers, Tehle said Dollar General now expects total sales for the entire fiscal year to rise from 8 to 9 percent. Same-store sales are projected to increase from 3 to 5 percent, he said.