Dollar General to Open 800 Stores in 2024; Q3 Tops Street

Dollar General reported better-than-expected third-quarter earnings and revenue as price-conscious consumers shopped its stores for groceries and other essentials.

However, in the earnings release, CEO Todd Vasos said he was “not satisfied” with the company’s third-quarter results, including a significant headwind from inventory shrink.  

“Over the last several weeks, we have spent significant time reviewing all areas of the business, and we have identified key opportunities for improvement both in the near term and over the longer term,” said Vasos, who returned as CEO in October, after serving in the role from June 2015 to November 2022. 

On the chain’s earnings call, Vasos outlined plans that include increasing upfront store staff at the checkout area, which he said should help with shrink. The company is also looking to get products to store shelves faster by reallocating labor investments toward store-level inventory-management processes.

[Read more: "Is Shrink From Self-Checkout Lanes Worse Than Grocers Think?"]

The extreme discounter said it expects to open 800 new stores (down from an expected 990 openings in 2023) in fiscal 2024, along with 2,000 remodels and 120 store relocations. 

“This is a modest slow down compared to the number of projects in recent years, which we believe is prudent in this environment,” stated Vasos. The openings will include more stores in rural areas and an emphasis on its larger format.

Dollar General reported net income of $276.2 million, or $1.26 a share, for the quarter ended, down from $526.2 million, or $2.33 a share, in the year-ago period.  Analysts had expected earnings per share of $1.20.

Sales rose 2.4% to $9.694 billion, topping estimates of $9.644 billion. Same-store sales fell 1.3%, driven by a decline in average transaction amount. The decrease was partially offset by an increase in customer traffic.

“We are pleased with the momentum in some of the underlying sales trends, including positive customer traffic, as well as market share gains in both dollars and units,” Vasos stated. “We continue to believe our model is relevant in all economic cycles, and we are working diligently to further enhance our unique combination of value and convenience.”

As of Nov. 3, 2023, total merchandise inventories, at cost, were $7.4 billion compared to $7.1 billion as of a year ago, a decrease of 1.8% on a per-store basis.

During the third quarter, Dollar General opened 263 new stores, remodeled 545 stores, and relocated 44 stores. 

As of Nov. 3, Goodlettsville, Tenn.-based Dollar General operated 19,726 Dollar General, DG Market, DGX and PopShelf stores across the U.S. and Mi Súper Dollar General stores in Mexico. The company is No. 16 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America.

This article first appeared on the site of sister publication Chain Store Age.