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Markdowns Hit Dollar General Q1 Margins

Quarterly profits at Dollar General came in below expectations as the retailer took a hit on margins and marked down some items to serve shoppers challenged by rising gas and commodity prices.

GOODLETSVILLE, Tenn. — Quarterly profits at Dollar General came in below expectations as the retailer took a hit on margins and marked down some items to serve shoppers challenged by rising gas and commodity prices.

The retailer said sales for the fiscal first quarter, which ended April 29, improved 10.9% to $3.45 billion, while net income climbed 15% to $157 million, or 48 cents per share. Analysts expected 50 cents per share.

Gross margin of 31.5% of sales was down 63 basis points from the same period last year.

Company officials said Wednesday that they did not expect margins would expand for the fiscal year, although they maintained their yearly profit forecast, counting on private brand growth, and improvements in sourcing and shrink and efficiency that would mitigate some margin pressure.