US-based variety store chain Dollar General has reported total net sales of $9.8bn in the second quarter (Q2) of fiscal year (FY) 2023, up 3.9% from $9.4bn in FY22.
Sales for the quarter were primarily driven by positive sales contributions from new stores.
During the quarter ending 4 August, the retailer’s same-store sales declined 0.1% against the prior year’s quarter due to a decline in customer traffic.
Gross profit as a percentage of net sales was 31.1%, down by 126 basis points (bps) from 32.3% in Q2 FY22. Its operating profit decreased by 24.2% to $692.3m over the quarter.
Dollar General registered a net income of $468.8m in Q2 FY23, down by 30.9% compared to $678.0m in the same period FY22.
Its diluted earnings per share (EPS) dropped 28.5% to $2.13 over the quarter from $2.98 in Q2 FY22.
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Dollar General chief executive officer Jeff Owen said: “While we are not satisfied with our overall financial results, we made significant progress in the second quarter improving execution in our supply chain and our stores, as well as reducing our inventory growth rate and further strengthening our price position.
“These actions were an important driver of improving customer traffic trends and growing total market share in the second quarter. In addition, we executed nearly 850 real estate projects during the quarter, further extending our reach and expanding our ability to serve both new and existing customers.”
For the full year 2023, Dollar General reduced its net sales growth expectation to 1.3% to 3.3% from the previous expectation of 3.5% to 5.0%.
The retailer also expects a diluted EPS decline of 34% to 22% under its revised outlook, compared to its previous expectation of an approximate 8% decline to flat growth.