GOODLETTSVILLE, Tenn.-Dollar General began its fiscal year by setting new records for first-quarter net income and net sales.
Net income in the quarter, which ended on May 3, rose 3.1 percent to $220.1 million. Net sales increased 8.5 percent to $4.2 billion, including a pickup of 2.6 percent in same-store sales. Rick Dreiling, Dollar General’s chairman and CEO, said the sales gains came largely from strong growth in the consumables category, offset by weaker sales in seasonal and weather-related products.
Gross margin in the quarter dropped 89 basis points to 30.6 percent. Selling, general and administrative expenses were up 6.7 percent in dollars but down 37 basis points as a percentage of sales, to 21.3 percent.
For the remainder of the year, Dreiling said, Dollar General is projecting same-store sales growth of from 4 to 5 percent, with consumables continuing to provide a key driver. “Sales of non-consumables are expected to remain challenging, and we anticipate a continued shift to lower margin items within consumables and higher inventory shrink,” he said.