(Reuters) -Dollar General beat estimates for first-quarter same-store sales and profit on Thursday, as more Americans flocked to stores for pocket-friendly groceries and essentials at a time when stubborn inflation continues to put pressure on household budgets.
Shares of the Goodlettsville, Tennessee-based company rose more than 5% before the bell.
Dollar General has focused on selling relevant merchandise, having more employees in its stores and expanding private label brands as it looks to attract consumers in the face of increasing competition from rivals Walmart, Target and the Chinese e-commerce platform Temu.
“These results were driven by strong customer traffic growth and market share gains during the quarter,” said CEO Todd Vasos.
According to data analytics firm Placer.ai, visits to Dollar General rose 12.6% year over year in the first quarter, while competitor Dollar Tree saw a 12.4% increase.
Robust quarterly results from Bellwether Walmart earlier in May suggested that U.S. shoppers are still resilient, even as rival Target warned that shoppers are delaying purchases and spending more money on out-of-home activities.
Dollar General’s same-store sales rose 2.4% this quarter, compared to analysts’ average estimate of a 1.61% increase, according to LSEG data.
The discount retailer posted earnings per share of $1.65, compared to analysts’ expectations of $1.57.
However, gross profit as a percentage of net sales came in at 30.2%, up from 31.6% a year earlier, as it resorted to higher markdowns and saw an increase in retail shrinkage, where inventory is lost or damaged is damaged as a result of theft or theft. breakage.
The company also reaffirmed its annual revenue and profit forecasts.
(Reporting by Granth Vanaik in Bengaluru; Editing by Shilpi Majumdar)
