Dollar stores – the powerhouse format behind much of the store expansion across the U.S. over the past decade – have hit a bump in the road over recent times.
Dollar General shares are down over 40% in the year-to-date and last month Dollar Tree announced a strategic review, while the future ownership of Family Dollar under the umbrella of the latter remains uncertain. Tough times even for the deep discounters, then.
Yet despite some turbulent times, the sector’s big hitter seems to keep marching on, with Dollar General pledging to push forward with its ambitious expansion program in the coming year, undaunted by consumer uncertainty, inflationary fears and even the odd hurricane or two.
Well, that’s not quite true. Dollar General’s third-quarter results did take a hit as multiple hurricanes across North America’s south west and west blew ill winds for its business in those regions locked down by severe climate events.
Yet it still managed to top sales estimates and, reflecting on its results, CEO Todd Vasos was quick to point out: “We are pleased with our team’s execution in the third quarter, particularly in light of multiple hurricanes that impacted our business. While we continue to operate in an environment where our core customer is financially constrained, we delivered same-store sales near the top end of our expectations for the quarter.”
In all, net sales rose 5% to $10.2 billion, topping analyst estimates of $10.1billion, while encouragingly same-store sales rose 1.3%, while net income came in at $196.5 million for the quarter ended Nov. 1, down from $276.2 million in the year prior period.
Dollar General Store Growth
And those figures have encouraged Dollar General to push ahead with a major real estate expansion for the retailer’s fiscal 2025, which runs to Jan. 30, 2026.
Those plans include opening approximately 575 new stores in the U.S. and up to 15 new stores in Mexico. It also plans to fully remodel approximately 2,000 stores as well as remodel another 2,250 stores through its Project Elevate initiative while it will also relocate about 45 further stores.
During the third quarter, Dollar General opened 207 new stores, remodeled 434 stores, and relocated 27 more, meaning by the end of Q3 the company operated 20,523 Dollar General, DG Market, DGX and Popshelf stores across the U.S., plus its Mi Súper Dollar General stores in Mexico.
In the summer, Dollar General also announced that it had refreshed the concept for its Popshelf stores – a format known for a rotating selection of products – with a new design across all its stores in 21 states.
Dollar General Rebuffs TRC
“Looking ahead, we are excited about our robust real estate plans for 2025,” Vasos said. “We believe our balance of new store growth and a significantly increased number of projects impacting our mature store base will further solidify Dollar General as an essential partner to communities in rural America, while strengthening our foundation to drive long-term sustainable growth and shareholder value.”
Dollar General’s ongoing strong performance has not gone unnoticed. In late September, the retailer announced that TRC Capital Investment Corp. had provided notice that it had commenced an unsolicited ‘mini-tender’ offer to purchase up to 1.5 million shares of Dollar General’s common stock, representing less than 1% of Dollar General’s outstanding common stock, at an offer price of $82.20 per share in cash.
However, Dollar General said that it did not endorse TRC Capital’s offer and recommended that shareholders did not tender their shares because it was at a price below the current market price for Dollar General common stock.
As if to prove it is only human, Dollar General did slightly adjust its full-year guidance to reflect hurricane-related costs and it now anticipates sales will rise 4.8% to 5.1%, compared with prior guidance of 4.7% to 5.3%.
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