Shares of Dollar General Corp. (DG) gained in pre-market trading after the company issued an upbeat outlook and reported mixed Q3 results. The discount store retailer’s earnings plunged 29.4% year-over-year to $0.89 per share, falling below consensus estimates of $0.94 per share.
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Furthermore, the company’s revenues increased 5% year-over-year to $10.2 billion in the third quarter, surpassing Street estimates of $10.1 billion.
DG Announces Quarterly Dividend
Turning to dividends, Dollar General’s Board of Directors declared a quarterly cash dividend of $0.59 per share on its common stock, payable on or before January 21 to shareholders of record on January 7, 2025. Additionally, in the third quarter, DG did not repurchase any shares under its stock buyback program. At the end of the quarter, the total remaining authorization for future stock buybacks stood at $1.4 billion.
DG Issues Upbeat FY24 Guidance
Looking ahead, the company expects its net sales in FY24 to grow in the range of 4.8% to 5.1%, compared to its prior forecast of 4.7% to 5.3%. This exceeds analysts’ estimates of 4.74% growth. Moreover, DG has forecast comparable sales to rise between 1.1% and 1.4%. The retailer also expects diluted earnings to range from $5.50 to $5.90 per share, exceeding analysts’ estimates of $5.85 per share.
Dollar General Plans New Stores and Remodels
In FY25, DG plans to open around “575 new stores in the U.S., as well as up to 15 new stores in Mexico, fully remodel approximately 2,000 stores, remodel approximately 2,250 stores through Project Elevate, and relocate approximately 45 stores.” The retailer’s Project Elevate focuses on revamping older stores and launching new locations.
What Is the Price Target for DG?
Analysts remain sidelined about DG stock, with a Hold consensus rating based on three Buys, seven Holds, and two Sells. Over the past year, DG has plummeted by more than 35%, and the average DG price target of $92.91 implies an upside potential of 16.9% from current levels. These analyst ratings are likely to change following DG’s results today.
