News Analysis
Dollar General reported a decline in revenues with rising fourth quarter sales.
Sales at the same store increased 1.2% from the previous year, reflecting the mixed effects of an average ticket transaction increase of 2.3% and a 1.1% decline in customer traffic. Quarterly sales increased due to higher spending on consumables, but partially offset by a decline in seasonal categories such as home products and apparel.
Quarterly operating profit fell 49.2% to $294.2 million, due to a $232 million claim for store closures.
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Dollar General CEO Todd Vasos said in a comment after the release of the company’s financial results, “We are pleased with the fundamental performance of the business in the fourth quarter, including improved execution and solid top-line results.”
“Looking back at the entire fiscal year 2024, we believe that being familiar with the basic job resonates with our customers, as demonstrated by the high customer satisfaction scores and the benefits of healthy market share.”
The strategy includes three initiatives: The initial initiative targets store efficiency by making significant labor investments in stores to improve store standards, inventory management, and inventory levels implementation. Additionally, the workforce has been restructured to ensure a more substantial quasi-present at checkout and to reduce turnover in store manager positions.
The second initiative aims to improve the supply chain. This includes measures to address capacity constraints in distribution centres, reduce reliance on external storage facilities, improve customer service, and ensure on-time delivery to stores and customers.
The third initiative focuses on merchandising, offering products that offer great value to customers at competitive prices.
Meanwhile, the company’s CEO is optimistic about the future.
“We believe it’s a good fit for delivering a unique combination of value and convenience in the future when our customers need it most,” Vasos said.
“We have strengthened the foundation of this business last year and are confident in our plans and initiatives for 2025 and beyond. We are looking to build this foundation further and create sustainable long-term value for shareholders.”
Elizabeth Lafontaine, research director at Placer.ai, is optimistic about the remaining financial results and outlook for 2025.
“Dollar General’s equivalent sales growth in the fourth quarter was 1.2 percent, and Placer.ai’s traffic estimates show strong increases in visits over the same period, highlighting consumer value across the retail industry,” she told the Epoch Times in an email.
“While the dollar and discount channels faced a slowdown in momentum in 2024, chains such as Dollar General continue to offer strong value propositions and a more robust assortment, especially for consumers in low-income households.”
LaFontaine said retailers are “allowing further helping consumers through periods of economic uncertainty” that are properly positioned to attract new visitors and strengthen loyalty to existing customers.
John Zolidis, president of Quo Vandis Capital and a longtime observer in the retail division, is concerned about a decline in profitability for General Dollar.
“In the fourth quarter of 2024, the company recorded eight consecutive quarters of contraction in EBIT margins and a year-over-year decline per share,” he told the Epoch Times in an email.
“The company led to further declines in revenue and reduced revenues prior to the interest and taxation (EBIT) contraction in 2025.”
EBIT is a measure widely used by the investor analyst community and determines the profitability of a company’s core business. A decline in EBIT indicates that the company’s core business is less profitable and has become an attractive investment.
