Dollar General on Thursday said sales of food and consumables paced a 7% revenue gain in the fiscal first quarter, while profits improved on higher initial markups and lower costs.
The Goodlettsville, Tenn.-based discounter said sales totaled $5.3 billion in the period ended April 29. Same-store sales improved by 2.2% on increases in traffic and average basket size. Net earnings improved by 14.4%, as profits as a percent of sales increased to 30.6% from 30.5% in the same period last year, reflecting higher markups and lower transportation costs, offset by disproportionate sales growth in lower-margin consumable categories.
Consumable sales increased by 7.6% in the quarter and accounted for $4 billion in sales during the quarter, the company said. Sales of seasonal items increased by 6.4%, home goods sales improved by 6.5% and apparel increased by 1.5%.
Earnings per share of $1.03 in the quarter exceeded analyst estimates of 98 cents.
"We remained keenly focused on ensuring the effectiveness and efficiency of every aspect of our business as we delivered both gross margin expansion and selling, general and administrative expense leverage," CEO Todd Vasos said in a statement. "This balanced performance contributed to operating profit improvement of 12% and diluted earnings per share growth of 23%. We are confident in our opportunities for growth and remain committed to creating sustainable long-term shareholder value."
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